Good morning, and welcome to the Catella Q3 2022 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing Star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask your question, you may press star then one on your telephone keypad. To withdraw your question, please press star and then two. Please note that this event is being recorded. I would now like to turn the conference over to Christoffer Abramson. Please go ahead, sir.
Thank you. Good morning, everyone, and thank you for attending our third quarter 2022 earnings call. My name is Christoffer Abramson, the CEO of Catella. With me today are Mattias Brodin, our Chief Financial Officer, and Michel Fischier, our Head of Investor Relations and Communications. All materials, including the reports and presentations, as usual, are available on our website, and a recording of the call today will be available on our website shortly as well. As usual, I'd like to start the presentation on page 3 with a brief overview of Catella, although most of you are likely familiar with our strategy and operations by now. Catella operates in three property-focused business areas: investment management, principal investments, and corporate finance. We manage SEK 142 billion in our Pan-European investment management platform.
About 75% of those assets under management are managed in property funds and the other part in a significant number of asset management mandates across Europe. Principal Investments is where we invest our own equity into a broad and diversified portfolio of European investment projects together with partners. Corporate Finance is our real estate advisory and brokerage arm with leading positions in large European markets. Corporate Finance is also an important internal advisor to our other business areas, Investment Management and Principal Investments. With that brief introduction, let's move to page four for the key operational highlights of the second quarter. Firstly, I'd like to reiterate which we've said before the last couple of quarters, and I think it's maybe even more important now.
I'd like to reiterate that in the current uncertain market environment we're in, we are very, very focused on managing our cash position prudently and maintain a good liquidity. We continue to have a strong liquidity position and no near-term refinancing needs, thus making us well-positioned to capture long-term value creation opportunities, which we'll speak a bit more about later on. Since our strategic shift towards a property-focused company, we continue to grow synergies across the group and thereby new revenue streams. Recent examples are new Pan-European asset management mandates, where we aggregate in industry-specific strategies and where we co-invest alongside strong capital partners who believe in our strategies. At group level, I'm glad to welcome Peter Umegård as our Chief Digitalization Officer and supported by Martin Johanson as our Head of Data and Analytics.
With them on board, Catella will strengthen its position and know-how in data analysis, artificial intelligence and new product strategies. As always, our goal is to help our investors and clients create value based on intelligence-driven, future-focused strategies and investment opportunities. Much like the Pan-European mandates I just mentioned, or the move to energy positive building, which we have talked about in previous calls. Investment management. We continue to deliver very strong growth in assets under management, adding nearly SEK 7 billion in the third quarter, mainly driven by inflows into our property funds and new asset management mandates in the U.K. and Finland. During the quarter, we also entered into an agreement to sell 34 properties in Germany and the Netherlands from two residential funds, Catella European Residential and Catella Wohnen Europa.
We expect the transaction to close somewhere around year-end. The main purpose of this divestment is to accelerate our portfolio transition to even more sustainable assets. We secured also very successful exits from a couple of asset management mandates during the quarter, and we also ended some other low-margin mandates primarily in the Nordics, which drives both strong revenues in the quarter and higher profitability going forward. As the market continues to be uncertain, we see an increased demand for value-add strategies, an area in which we have strong competence to help clients both in mandates and in new funds. This is something we will focus a lot more going into 2023. Principal Investments. We continue to see strong investor interest in the assets we are developing.
However, the timing of planned sales has been pushed forward somewhat. Investors are not as active as before, which is a natural reaction in an environment where baseline interest rate assumptions and other parameters are hard to foresee. In this environment, it is to our advantage to be well-capitalized and have the ability to wait for a stabilized market. In the longer term, we are convinced of the attractiveness of our projects, and we will only exit at the right time. Our pipeline is mainly progressing according to plan, and we feel positive about the attractive and sustainable assets we will bring to market in the coming years.
Our strong balance sheet also allows us to review and possibly invest in a number of more opportunistic co-investment opportunities across Europe, where we are seeing an increased interest from several capital partners, especially from regions where they might have a strength in the macroeconomic climate locally or in their FX position. Finally, we go to Corporate Finance, where, as most of you probably know, the transaction market continues to be slower than usual. Before the expectations of buyers and sellers reset and align, which we've talked about a lot lately, the transaction market will likely continue to be in a wait-and-see mode. There are large transactions occurring, but generally the core transaction market is relatively slow in most markets at least.
On the other hand, demand for valuation services is very strong in a market where uncertainty prevails, and so is the need for debt advisory and complex transaction advice, playing a little bit to our strength. Okay, on page five is a summary of the group's consolidated results. Sorry, I'm very pleased to present an improved result and continued growth in assets under management despite the turbulent and uncertain market climate. During the quarter, we grew revenue by over 30% year-over-year to nearly SEK 500 million. We delivered an operating profit of SEK 62 million compared to SEK 46 million in Q3 last year, with an operating profit margin of nearly 13%. And we are tracking at 26% year to date, just to note.
Earnings per share in the quarter was, let's call it, SEK 0.77 or 77 öre for those who know that, nearly doubling the value to shareholders compared to last year. Investment Management has delivered a substantial AUM growth of SEK 30 billion over the last 12 months. In Q3 assets under management grew by SEK 7 billion. I call that a very strong outcome in a relatively challenging market. The profit margin was nearly 30% in the quarter and 32% over the last 12 months, driven both by underlying AUM growth increasing our fixed fee revenue and, in this quarter, substantial variable revenues. In Principal Investments, no divestments were carried out this quarter, but the business area has contributed substantially to operating profits during the last 12 months.
As mentioned, the focus ahead is on continuing to develop the current pipeline of projects and to pursue co-investments which are really aimed at creating new partnerships and revenue streams across Europe. As the market slowly corrects, exploring opportunistic ideas with a strong balance sheet behind us. Despite a slower transaction market, revenue and corporate finance was on par with last year. EBIT also showed an improvement of nearly SEK 10 million for the quarter, and in fact, helped quite a lot by discontinuing the loss-generating operations in Germany and the Baltics earlier this year. Let's move to page seven to discuss investment management in a little bit more detail. Since the inception of investment management, we have delivered a strong average annual growth rate of 27%.
Year-on-year assets under management now grew by SEK 30 billion as of the third quarter. The growth continues to drive increased fixed fee income, our key underlying investment management metric and really the main underlying profit driver in Catella. Last twelve months fixed fees grew by nearly 20% to SEK 770 million. Last twelve months variable fees were SEK 509 million compared to SEK 317 million for the same period 12 months prior. The increase of 60% is mainly driven by significant performance fees in various residential funds and also some performance fees from asset management mandates in this particular quarter. Investment management is the main growth engine of Catella, and we continue to successfully raise new capital and launch new sustainability-focused funds and asset management mandates, albeit in a slower environment today.
Which is why it's important that we have reached the scale and structure, that even during slower transaction quarters we still can deliver a very solid profitability, on underlying fixed earnings. On page eight, we look deeper into the AUM growth in investment management. We provide a broad and diversified fund offering for our clients, which continues to generate capital inflows, especially to funds with a clear sustainability agenda. Of the SEK 30 billion in AUM growth over the last 12 months, a large portion stems from inflows to our modern residential funds with particular interest in sustainable assets.
Notably, we show strong inflows into Catella Wohnen Europa and our Article 9 Dark Green Residential Fund, Catella European Residential III. In Q3, the AUM growth was both strong and I would say quite broad, from fund inflows, roughly 60% residential and 40% commercial funds, and SEK 1 billion in the quarter from new asset management mandates in the U.K. and Finland, and also aided by some positive currency effects due to the weaker Swedish krona reporting currency. Outflows during the quarter related to normal active portfolio management, and as I mentioned earlier, ending some low margin mandates in Sweden and Norway, as well as successful sales of assets managed by, predominantly by Catella APAM in the U.K. On page nine, the P&L for investment management.
Very happy to report a 20% revenue increase year-over-year, mainly driven by the underlying growth again in AUM, increasing fixed fee revenues, which over the last 12 months have grown by 19%. Earnings in the third quarter were also strengthened by material performance fees from our asset management businesses in Denmark and Finland. Our growth in managed assets doesn't notably increase costs, obviously with the exception of variable compensation. This is really important now in the slower market that we're in currently. This supports our expanding margins and improves the scalability of the business model, where we have now reached a level where this really kicks in. Fixed fees and total revenue increased by about 20%, whereas OpEx only increased by 15%.
The more we grow, the more pronounced this will be. As mentioned, we have now reached a scale and structure that even during relatively slow transaction quarters, especially when we look at our, you know, 75% of our assets in funds, we deliver strong underlying profitability, even with limited transactions. Let's turn to page 11 for an overview of Principal Investments. We continue to invest into a diversified portfolio of projects in different asset classes. The portfolio consists of 11 active projects in six European countries, which continue to progress according to expectations.
During the third quarter, we made no divestments, but our expectation is that you know, the far-advanced developments such as the Kaktus Towers residential project in Copenhagen and our two current logistics development projects in Sweden will close, we'll exit through them during the next three to six months. To date, our transactions have generated an IRR over 50%, well ahead of the long-term target of 20% of course. Total revenue for principal investments was SEK 74 million in the quarter, mainly consisting of stage of completion revenues in Catella Logistics Europe and management fees in Catella Project Management. The loss unfortunately for the quarter amounted to SEK 20 million Swedish kronor, mainly as an effect of development costs in projects that cannot be capitalized in Catella Logistics Europe.
Additionally, after the quarter, some late-stage development costs were added to the closing accounts of Principal Investments sales in Ljungby, also a logistics asset. These costs will lead to a reduction of the reported second quarter operating profit in the fourth quarter. You know, we'll finalize the reconciliation of the closing accounts, but it seems that we will reduce the second quarter EBIT from SEK 328 million to around SEK 320 million. On the whole, not a material adverse impact, but still unfortunate.
Principal Investments earnings will always be somewhat volatile between quarters, but you know, we really focus on the SEK 170+ million of operating profits during the last 12 months and a very strong pipeline, both in development and upcoming sales in the coming quarters. Briefly, let's look at a project overview of Principal Investments on page 12. We continue to develop our current high-quality investment projects across Europe. As you can see, it's a very diverse portfolio of assets coming to market over several years into the future. As already mentioned, the current market is hesitant, but we expect the completed and nearly completed projects to be exited, as I said, in the next couple of quarters.
Now, having a strong balance sheet in this environment is crucial as we can wait out the current market, rather than selling, while instead focusing on future investment opportunities. In the longer term, we are convinced of the attractiveness of our projects and we still have a strong investor demand. On page 14, let's talk a little bit about Corporate Finance. It maintains a very strong market position in all remaining five markets, with exceptional strength in certain complex segments and niche markets. The current market uncertainties and you know, bid-ask gap between buyer and seller price expectations is pushing transactions forward in time.
The traditional core transaction market was very slow in the quarter, but there were still large complex portfolio transactions and restructurings occurring. Despite this environment, Corporate Finance delivered a positive EBIT of SEK 6 million, an increase from SEK -3 million the same quarter last year, which is, you know, strongly supported by discontinuing loss-making operations in Germany and the Baltics earlier this year. On the positive side also, interest in valuation services has increased in the current market backdrop, and we have continued discussions and good dialogues with clients regarding debt and capital markets advisory services as traditional credit markets and equity markets have tightened up significantly. I now hand over to our CFO, Mattias Brodin, to cover the financial summary beginning on page 16.
Thank you, Christoffer. Let me briefly cover the financial summary, focusing on underlying items. As Christoffer already mentioned, the strong quarterly operating profit was driven by investment management's growth in fixed fees, leading to improved operating profits of SEK 62 million, corresponding to a margin of 13% compared to 12% year-over-year on a group level. I would once again remind you of the line deduction of profit attributable to non-controlling interest. According to IFRS accounting standards, we fully consolidate all income from companies with controlling interest. In order to highlight profits related to Catella AB shareholders, we adjust for profits related to non-controlling interests. As there were no divestments in this quarter, there were only minor deductions on this line. Turning to financial net, we notice a substantial improvement from last year.
This is mainly driven through positive fair value adjustments on long-term investments as well as positive currency effects, primarily from a weakened Swedish krona against euro. As a result of both stronger quarterly earnings and improved financial net, earnings per share nearly doubled to SEK 0.777 year-over-year compared to SEK 0.39 last year. Continuing to page 17, where we look at our financial and liquidity position. Catella continues to have a strong balance sheet and equity ratio supporting our future growth plans, both in new investments and potential M&A activities. Compared to last year, total assets have increased by over SEK 1 billion to SEK 5.8 billion. The increase is related to additional and new investments in Principal Investments. The liquidity at the end of the quarter improved to SEK 1.6 million compared to SEK 1.4 billion in previous quarter.
As Christoffer already has mentioned, given the current market climate, we're comfortable with holding a larger proportion of cash. The good capital position and no short-term refinancing needs makes it possible to further explore both long-term value-creating opportunities and also have the firepower for opportunistic ideas. That was all regarding Catella's financials, and I hand back over to Christoffer.
Thank you, Mattias. Before opening up for Q&A, I would like to briefly summarize the quarter from our perspective on slide 19 with the nice pictures. I'd say we feel very positive about the strength of our underlying business model in three property-focused business areas. We've delivered increased revenues and improved operating results and continued growth in assets under management despite a turbulent and uncertain market climate. The main profit drivers continue to be fixed-fee growth in Investment Management and supported by steps taken earlier this year in closing loss-making operations to further streamline Catella. Looking ahead, we still expect growth in Investment Management but believe that a likely scenario is that inflows and growth will moderate somewhat as transaction markets remain slow and investor willingness to invest is dampened until the macro environment becomes clearer.
Whether that takes three or six months, it's, you know, very hard to tell. We will stay the course, of course, by continuing to develop our fund offering with sustainability profile products, which will continue to drive our AUM growth, something that we've already seen in the beginning of the fourth quarter. We're also developing new value add product strategies in both fund and mandate to meet investor demand, which is shifting towards this area of the market. Another important strategic initiative we are pursuing is the strengthening efficiency through digitalization and scalable processes. With the Chief Digitalization Officer and the Head of Data and Analytics joining Catella, we will be positioned to help our investors and clients create value-based and intelligence-driven future-focused strategies and investment opportunities, which has already begun.
The final point, it is of course hard to make any predictions on how the market will develop. The most likely scenario is that the transaction market will be slower for at least one or two quarters, and this will affect all of our business areas. At the same time, the current market with potential price corrections and distressed situations occurring will open up great possibilities to invest in long-term value creation opportunities. That's based on our fantastic teams across Europe and a very strong liquidity position, we are ready to act upon. With that, I would like to thank you all for listening and open up for questions.
Thank you, sir. We will now begin the question and answer session. As a reminder, if you would like to ask a question, please press star and then one. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. The first question we have is from Jesper von Koch from Redeye.
Good morning, gentlemen, and congrats to the strong quarter. So let me just start with principal investment. I guess you said that you expect Kaktus and two of the Swedish logistics projects to be like divested in the next three to six months. Regarding Kaktus first, I mean, we know that the residential part is fully let out to tenants, but how about the commercial part? Is there anything left to do there?
Yes, a little bit. I can't obviously discuss an ongoing negotiation, but we are, I would say, in the final stages of securing the vast majority of the commercial area in Kaktus. Of course, you know, we want to present any buyer investor with a completed building. We're trying to time line those up to both, as you said, the residential area is fully let. It's been a fantastic success and in the commercial areas. We're getting close and hope that you know we can get a sale to close as soon as that lease or those leases are signed. Again, strong investor interest. We are in live processes. Hopefully, more to come shortly.
It sounds like, I mean, in this more insecure market, investors in Kaktus as a whole, they kind of demand that everything is being let out and have tenants on all parts. Is that a correct picture?
Yes and no. I think, you know, we also consider that it's best for both buyer and seller and that we get the most value out if the asset is more completed today. 6, 9, 12 months ago, there were a lot more risks taken by buyers on forward transactions. Today, certainty is more important. We think that it's in both sides interest to have more completed leases on the whole front. The other reason that it's been delayed a little bit is processes just take longer. Investment committees and the various parties that we're discussing with, you know, they go back and forth a little bit today, and that that's normal.
Great. Thanks. Also, just generally, we don't need to go into the like each specific project, but like Vaggeryd and the French logistics project and also Seefeld like how is the interest there, and how are you thinking about those projects in general?
Well, if we start here in Sweden, we have two projects. One recently completed, as you mentioned, in Vaggeryd, and one that will be completed in the early spring, very close, very similar location. We have great interest. We've had offers back and forth. As we are in a very fortunate position of having strong liquidity and I'd call it first-class logistics assets that are gonna be very attractive, there's no reason to sell unless the offers are good enough. We have offers that are good. We're hoping that it'll be even better. I think we should see some transactions in the not too distant future.
Of course, the second asset in Vaggeryd, Jönköping, might be better to complete first and sell after rather than to take a forward discount. That's something that we assess, you know. I wouldn't say daily, but quite frequently, and we're in live conversations there as well. In Catella Logistics Europe, there are a couple of assets that are completing or have completed. I can't talk about what the outcome will be there. Nothing truly material in the near term, but we have a couple of projects that will be a bit longer and generate bigger profits. Let's see, was there any other? Oh, yeah. Seefeld.
Seefeld, yeah.
Yeah. Seefeld is nearing completion, I think early in the new year. I mean, just around the end of this year or early next year. Letting activity there has been good. I think the good thing there is that the rents are creeping up. They're beating our expectations. You know, again, it's a matter of, you know, a year ago, you would probably have sold it at a forward. In this market, I think everyone is better positioned to complete the project and to exit upon completion when rents are more stabilized. Letting activity is doing well. Rents are strong. The construction is on time and on budget. We feel great about the project.
As you know, Seefeld will be a, you know, very long multi-phase project. This is only Seefeld, which is the first phase.
Yeah. Great. I mean, it still seems like the interest is quite good for all these projects, like especially when everything is let to different tenants. If you were not to sell them, I mean, like each of these assets in the near term after total completion, like, would you then just like operate them yourselves and collect tenant fees, like with your own capabilities or what's the plan there?
Well, if you think about Kaktus and Vaggeryd to start with, we already are. You know, they're operating. We have operating income coming in. I think, you know, the important part if you're keeping it on the balance sheet, which just to be clear, we don't have intentions to keep things long term on the balance sheet. But if it's the right thing to do, we'll do it. The key there is to then finance them at attractive terms and have a positive interest coverage ratio and continue to talk to buyers. That's the plan, and that's the plan all along.
Okay, good. I mean, I guess the uncertain market conditions also create opportunities for financially strong actors like yourself. I mean, could you talk about what kind of assets that you're especially looking into right now?
Sure.
The principal. Yeah.
Yeah. As always, you know, it's really aligning our own interests and strategic outlook on the market with those of our partners. What we see right now, both from ourselves and a lot of our partners, is that across certain key European markets, there's a lot of distressed developers, particularly on the residential side, where we think there could be a lot of opportunities to step in. A lot of those would require a lot of capital, which means that we partner up with you know, some of our established or hopefully new as well, capital partners.
We are actively looking in, let's call it three or four geographical markets where we think, if you think about rental markets being sort of a free market dynamic, under-supplied assets and, you know, developers with less financial strength. Those are the three things that we really focus on and we're working with our local teams. We look at these opportunities, I would say almost on a daily basis. The thing is, there's no real rush. We don't think the situation is going to get better in the next two months. You have to be prudent in your underwriting and pick the right timing and assets and partners, of course. We think there's a lot coming.
There's a lot of attractive stuff on the market. We also have a handful of interesting discussions, which we've already started a couple of mandates where we aggregate specifics, which I talked about earlier, industry-specific assets and portfolios that we build up together with partners across Europe, where, you know, our ability to transact and have asset management presence in 13 countries is a real strength for a capital partner looking to for an operating partner. Those are some of the things we're working on. There's a lot more to talk about.
Yeah. I mean, the three to four geographical markets that you're especially looking into for these assets, are they like on your where you're already at, like geographically?
Yes. I think yes. It's really important that when you invest your own and other people's money, we have to play to our strengths. You know, I don't want to sound arrogant, but it's not for amateurs. That's where we rely on our strongest platforms who know this market inside and out. If I think about the markets we are looking at, if you look at the U.K., that's probably where prices and market has moved quicker than elsewhere with well-known and well-discussed political issues and economic issues. If you look at Germany, I think on the residential side, there's been maybe a little too much and people have overextended.
I think in Poland, where we have a new, very, very strong team, the interest rates in other countries have increased enough to make, you know, the swap costs into Poland much more attractive for foreign buyers, than it was six months ago. All those things are things that we assess. Of course, we still think that from a value creation and value add and optimistic segment, converting assets, to more sustainability, net zero transition type mandates is going to be absolutely critical, with a lot of investor demand, and that's where we're trying to position ourselves.
About that kind of transition that you're making, I mean, which you also talked about on the last conference calls. I mean, or at least you have intended to make a large divestment from, I think, European Residential and Wohnen Europa, that's going to close before the end of the year. Could you just talk more about this divestment plan and also your strategy for this?
Yeah. As it is not closed, I don't want to talk about it too much, but it is, you know, it's a transaction of, you know, 34 assets, and I know it's more than 4,000 residential units. From an external source, I think it's the second largest cross-border transaction in residential. You know, so it's a big transaction. We want to recycle our investors' capital into even more forward-looking and even more sustainable assets. These assets that we're selling are great. But I think there are buyers who look at them slightly differently and value them even higher than we do. We want to recycle the capital into slightly more forward-looking assets.
That's how we do it. I think from a repositioning perspective, if you look at where the capital is flowing in at the moment, it is in our, you know, Catella European Residential Three has more commitments already. We look at our Wohnen Europa as well getting more capital. Our energy positive towers fund with Elithis is getting more commitments. It is a clear trend and pattern, and we think it's a good pattern. It's something that we should be focusing on.
On top of that, clearly we have a big old portfolio of assets that need work and we are making some moves which we will talk about in the coming quarters as part, you know, as far as establishing operations and recruitments to support that transition, both for our own portfolios and hopefully to support our partners in transitioning portfolios across Europe.
Good. I also want to just go into like eventual outflows from pension funds and the like. Is, like, do you see any risk or any tendency of these wanting to reduce their share of real estate due to like the uncertain macro environment?
Well, there's always been a risk. We don't see any trend. So two different answers, I guess. You know, reallocation in real estate assets is complex. Obviously when you reweight stocks, bonds, and fixed assets, real assets, there has to be changes in certain funds, but it's rather slow. After the 2008-2009 financial crisis, the rules of funds for real assets that are less liquid changed. Which means that calling your money is a pretty complex and time-consuming process, which means that our assets are secured for quite some time.
What we see today is that people are hanging on and clearly believe in long term, and we continue to have great performance in our funds. We have no material outflows to speak of. You know, the new capital inflow is slightly slower, and that is clear. It is strong into the right funds and mandates that we work on. We have, as I mentioned, really on the sustainable funds, sort of the new and more forward-looking parts. The sustainable funds and residential, pan-European logistics focus, for example, on the commercial side. The inflows are still strong. We have new ventures here in the Nordics, which is really great.
We're getting actual, for the first time since the launch, real institutional money coming in, which we'll talk about in the next quarter a lot more, going into our Nordic funds. It's about having the right assets and the right funds. We still see inflow there. It's the broad inflow into everything that's a bit slower. I'd also say if you look at our asset management operations, I think that's becoming more and more important. We've had a fantastic run on the fund side, and we continue to see strong inflow. Asset management, which is really now it's the time to shine.
We have great teams in our 13 markets who are able to deliver on complex long-term value add strategies, and those inflows are actually increasing because that's where money will, I think, will be made over the next few years as the market is now ripe for more creative strategies and more value add.
Yeah. I mean because the likes of APAM and so on being more-
Yeah.
more specialized in distressed assets.
Exactly.
Um-
Specifically, it's had great inflow over the last six months, really, great inflows.
I was just also wondering if, I mean, you have some of your peers that are like continuously reporting like the duration or lock-in times, if you will, of their AUM. Do you have any plans to do anything like that so that like investors can tell like how sticky the capital is, you know?
You know, no, we don't. Is the short answer. I think, if you look at funds, it's a tricky thing to do because you can say, "this is a 10-year fund. This is an evergreen fund. This is a seven-year mandate." Look, the key is to have. You know, the rule. If you call in 12 months, most of the time people can call with a 12-month notice, whether you say it's an evergreen fund or not. The key is to have great assets, great investor relationships, and continue to perform. That's the safest bet. That's the safest way to keep the money in the funds. Can I just reiterate, we don't have outflows at the moment. We don't get called. The positions are strong.
Whatever our peers say that they're locked in, I mean, it's yes, they're locked in to a degree. I think anyone who says that their money is secured for 15 years is they're not quite telling the truth. Our money is secured because of our great relationships and our great performance. Of course, there is a call period of 12 months that gives us a good stability and outlook. Beyond that, I don't think it would be prudent to promise more than that.
Sounds good. I mean, you talk about the underlying macro environment creating opportunities for the likes of M&A. Regarding this, would this be like smaller bolt-on acquisitions in a market like the one you did in Poland or what kind of acquisitions are you thinking of?
Well, we're thinking about a few things. Yeah. I think. Look, Catella does not have the history or ambition to, you know, buy a competitor of our same size at the moment, at least. We look in the right segment and in the right market, where we think we don't have the strength today, or I think even more importantly, where we can bring, you know, a lot of value to a new partner, where they might be seeking a pan-European presence, very much like our Polish acquisition. Or when we acquired APAM, what we've done since is, you know, to get more institutional capital in and provide them with principal investment support to increase their mandate and increase their power.
What we're looking for is partners today who are maybe in segments that we think are really looking good going forward, but really where we can have synergistic strengths together. Where they might be looking at needing co-investment capital to really expand their operations, get new mandates or, you know, where our real strength is in our pan-European presence and that's where, which is attractive to a lot of targets. You know, midsize bolt-on is probably a fair expectation.
Great. Thanks for all those answers. That's all for me. Good luck going forward.
Thank you, Jesper. I appreciate it.
Thank you, sir. Ladies and gentlemen, that was our final question. I would like to turn the conference back over to Christoffer Abramson for closing remarks.
Okay. Well, we have no more closing remarks. I think it was a really interesting and strategic Q&A. We appreciate the questions. We thank everyone for listening. Again, hope if you wanna replay it's gonna be available online shortly. Thank you everyone for listening and have a wonderful day and a great weekend.
Thank you, sir. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your line.