Good morning, and thank you for joining us. I am Barnali Biswal, Group CEO of Hilbert Group, and I am pleased to present our Q1 2026 results. Let me begin with the central message up front. Q1 was an important quarter for Hilbert. The market backdrop became more challenging, risk appetite softened, and capital allocation grew more selective. But it was also a quarter in which the platform we spent 2025 building began to demonstrate its strength more clearly in performance, in AUM growth, in fee revenue generation, and in the quality of institutional engagement we're now seeing across the business. The key takeaway I would leave you with today is this.
In one of the more difficult quarters for crypto risk assets, Hilbert delivered positive returns, grew fee-paying AUM by more than 90% in our 2/20 hedge fund strategies, increased fund fee revenue by 84.5% year-over-year, and continued to strengthen its institutional position. We believe that matters because it shows the business is now moving from build-out to monetization. With operating leverage beginning to emerge and with the recent equity raise completed, we are positioned to scale from an established cost base and with the financial capacity to execute. Q1 was defined by a much tougher market backdrop. Bitcoin was down materially over the quarter. Broader risk appetite weakened and capital across the digital asset space became more selective. In that kind of environment, narrative matters less and execution matters more. Against that backdrop, Hilbert passed a real operating and commercial stress test.
A severe crypto drawdown, weaker sentiment, more selective allocators, and still positive returns, still AUM growth, still fee revenue growth. That is important because difficult markets tend to reveal what's durable and what's not. For us, Q1 was a quarter in which discipline, execution quality, and strategy design mattered more than the general direction of the market. If we turn to performance, this slide goes to the heart of what matters in markets like these. Performance is the differentiator. When risk appetite weakens and capital becomes more selective, it's not enough simply to be present in the market. You have to perform, and you have to differentiate. That is exactly what our strategies did in Q1. When risk appetite weakens and allocators become more selective, performance is what differentiates.
In Q1, while Bitcoin was down 25.6%, Basis+ USD was positive at 1.6%, Basis+ BTC was positive at 1.9%, and Multi Strategy fund delivered a very strong 23.3%. That is important because strong performance in difficult markets is what builds allocator conviction, and that matters more than just one quarter's numbers. Strong performance in supportive markets is useful. Strong performance in difficult markets is what builds real credibility. It is what differentiates platforms, strengthens allocator conviction, and creates the foundation for durable institutional growth. The message on this slide is straightforward. In the kind of market environment where execution matters most, Hilbert performed, and the differentiation was visible in the growing investor engagement. That strength becomes even clearer when you look at relative performance. Our core strategies outperformed not only the market, but also relevant benchmarks.
In a quarter where many investors were focused on protecting capital or limiting downside, Hilbert posted positive returns and was materially ahead of the broader crypto market and benchmark composites. Relative performance matters because it is one of the clearest signals institutional allocators use when deciding where to spend time, where to conduct diligence, and ultimately where to allocate. Outperforming benchmarks in a difficult quarter does not just validate the strategy, it improves the commercial position of the platform. For us, relative outperformance is not just a performance statistic, it is an important part of the commercial story and thus the equity story as well. It strengthens our credibility with more sophisticated allocators and supports the broader institutionalization of the platform. Let me now turn to the commercial implications of that performance. Q1 marks an important commercial inflection point for Hilbert.
Fund fee revenue reached SEK 3.29 million , up 84.5% year-on-year and 12% versus Q4. While 2/20 fee tier hedge fund AUM grew by more than 90% in the quarter. That matters because it shows strong outperformance is now translating into growth in higher value fee-paying AUM, and that growth is beginning to flow through into revenue. On top of a group cost base that has largely stabilized. In other words, the operating leverage in the model is no longer theoretical. It is beginning to show up in the numbers. What matters here is not simply that the revenue grew. What matters is why it grew. We are now seeing strong outperformance translate more clearly into AUM growth. That AUM growth is beginning to translate into fee revenue at a meaningful, faster space. That is exactly the progression we want to see in an institutional asset management platform.
Equally important, we are now building on a cost base that has stabilized at roughly SEK 650,000 per month at the group level. Importantly, as the fee AUM grows, revenue visibility and durability improve because a larger share of the earnings profile is increasingly supported by recurring management fee economics with performance fees providing additional upside. For much of 2025, we were investing, integrating, and building the platform. Q1 is one of the first quarters where that work starts to show up more visibly in the financial profile of the business. We are still early, but the connection between performance, allocator quality, AUM formation, and revenue is becoming more clear. This is where the economics of the model becomes especially important. In Q1, asset management business as a standalone business line was cash positive, generating approximately SEK 360,000 of revenue against about SEK 268,000 of operating cost.
For a positive contribution of about SEK 90,000. Revenue exceeded costs by 34.5%, which is an important proof point that the core engine is already economically viable. To frame that more directly, at the current established cost base and assuming no additional AUM from here, the existing AUM base can already support a path towards group cash flow neutrality if we simply repeat last year's performance, even assuming no contribution from any other part of the business. That is not the upside case. It is the floor of the logic. The upside case is that as AUM continues to grow, the business should scale meaningfully because much of the infrastructure is already in place. That is the operating leverage we believe the market is only beginning to appreciate. When we talk about operating leverage, we are not talking about a distant concept.
We are talking about a model that is now starting to demonstrate real earnings power as scale builds on top of a cost base that is already substantially in place. This slide takes the story one step further and focuses on capital formation. Our institutional pipeline has continued to build strongly. To be clear, pipeline is not committed capital, and it should not be interpreted as promised AUM. In institutional asset management, however, pipeline is still a highly important measure because it reflects the level of serious investor engagement around the platform, the depth of dialogue, the quality of counterparties, and the amount of diligence activity that is taking place. What gives us confidence is not simply the size of this number, but the nature of the engagement behind it. These are not superficial conversations or early-stage impressions of interest.
They are active, qualified discussions with investors who are spending time and conducting work and progressing through a structured diligence process. Just as importantly, institutional interest is continuing to deepen. We are seeing more sophisticated allocators engage with us, spend more time on the platform, and move steadily from evaluation toward potential allocation. We are also seeing existing investors add to their positions, which is another important indicator of confidence. That matters because in institutional asset management, the health of business is not measured only by current AUM. It is also measured by the quality and seriousness of the investor pipeline behind it. Strong performance may open the door, but it is credibility, consistency, and allocator quality that build durable AUM over time. The message on this slide is not that pipeline should be viewed as future AUM before it is funded.
It is that the pipeline is a meaningful indicator of commercial health, and ours is becoming broader, stronger, and increasingly institutional in character. That is exactly the kind of momentum we want to be building from here. Let me now turn to the broader platform, because Hilbert today is building more than a single revenue stream. Asset management remains the core of the engine of business today, and rightly so. It is the part of the group that is already showing the clearest traction. But the adjacent platform components matter because they broaden our relevance, deepen product capability, and create future revenue optionality around that core. First, on the trading side, the cross-exchange arbitrage routine from Enigma will go live later this month. Initially, that strategy will be funded with Hilbert's own capital, which allows us to establish a live operating track record under our own control.
Assuming a successful track over the next few months, the intention is then for it to form part of the master fund. Second, on infrastructure and regulatory process, the PI/EMI licensing process with the MFSA for Nordark continues. We continue to see Nordark as strategically important, not only because of its near-term capability set, but because what it could enable over time across trading infrastructure and broader digital financial services. We are currently working on scaling up the unregulated lending side of that business. Third, on the on-chain side, Syntetika is funded well into 2027, which gives us runway and flexibility to launch and scale it properly. We expect to have full launch in Q2 on the back of recently completed legal and operational milestones.
We see Syntetika as an important conduit for raising on-chain AUM to our asset management strategies, and we continue to see strong demand for robust yield-generating strategies like our flagship Basis+ strategy. What matters here is not that all of these components mature at the same speed. They will not. What matters is that they are progressing within a common strategic architecture, and that architecture gives Hilbert more than one way to grow. This slide is really about what comes next operationally. With the recent equity raise completed, Hilbert is fully financed to grow the business from here, and importantly, to do so on an established cost base. That is a meaningful position to be in. We are no longer talking about growth while still building the platform underneath it. We are now talking about growing into a platform that is already substantially built.
One important step in that process is improved transparency. As highlighted in the deck, consolidated group AUM, as split out in this slide, will now form part of the monthly CEO KPI update beginning in June 2026. We are committed to better reporting and greater transparency, which are central to the institutionalization process and to how we want the business to be judged over time. From an operating perspective, the priorities are straightforward. One, continue scaling the asset management engine that is already producing results. Number two, continue converting a risked institutional pipeline into funded AUM in a disciplined manner. Number three, continue bringing the broader platform components into production in the right sequence across trading, infrastructure, and on-chain distribution. Finally, continue strengthening reporting, governance, and execution discipline, because that is what allows scale to be sustainable rather than simply visible.
If I were to summarize the outlook in one sentence, it would be this. We believe the significance of this moment is that several dynamics are beginning to align at once. Institutional engagement in digital assets is becoming more serious, demand for differentiated yield strategies is growing, and there remain relatively few listed platforms with both an operating asset management engine and broader platform infrastructure. As our AUM base grows on top of a largely established cost base, we believe the earnings profile of the business can become materially more visible. Let me close with the main takeaways. First, Q1 was a difficult quarter for the market but a constructive quarter for Hilbert. Our strategies remained positive, outperformance was strong, and that outperformance is now feeding more clearly into AUM growth and revenue. Second, we believe the business has reached an important inflection point.
The group cost base has stabilized at roughly SEK 650,000 per month. The asset management business is showing clear operating leverage, and the current AUM base already supports a credible path towards group cash flow neutrality under reasonable performance assumptions, even before factoring in additional AUM growth or revenue from other parts of the business. Third, institutional momentum continues to strengthen. The quality of allocator engagement continues to improve, and institutional interest is growing day by day. Fourth, with the equity raise completed, Hilbert is fully financed for the next phase of growth. With the broader platform continuing to progress, we believe the group is moving forward from a position of greater strength, better visibility, and a clearer path to scale than at any earlier point in its development. The broad message is straightforward.
Hilbert has come through a difficult market with positive performance, growing institutional demand, expanding fee-paying AUM, and a core asset management business that is already cash positive. With the cost base now largely established and the broader platform continuing to progress, we believe the group is entering the stage where incremental AUM growth can translate into meaningfully stronger earnings. Thank you again for your time and your continued support. We believe Q1 demonstrated that Hilbert can perform through difficult markets, convert that performance into institutional and financial momentum, and increasingly show the scale economics of the platform in the numbers. I look forward to speaking to you all very soon.