Earnings Call: H1 2021

Aug 3, 2021

Good morning. Thank you for joining half year results call today. My name is Pete Sanderson, CEO of GAM. I'm joined today by Richard McNamara, our CFO. I'll give a brief introduction and talk about our achievements in the first half. Richard will run through the detail of the financial results, and then I'll give you an update on our strategy and outlook before opening for any questions that you might have. Everyone will be on mute during the presentation, but you're welcome to ask your questions at the end by using the Q and A function in the Webex application. Overall, I'm pleased with the further progress we've made executing our strategy during the first half of this year. We're committed to achieving sustainable growth at GAM. In the past six months, we've achieved some important milestones on this journey. We're investing both in talent and technology as well as evolving our product offering to better meet client demand and help us deliver on our strategy. We're seeing an encouraging level of client interest, reflecting our strong investment performance. And although we saw outflows in Investment Management overall, we saw net inflows across our equity platform. We've also achieved an increasingly diversified pipeline with demand across our core thematic liquid alternative and sustainable strategies. Turning to the financial results, which Richard will cover in more detail shortly, you'll see that we've returned to profit on an underlying pretax basis for the half year. Although our profit figure is small, I believe that our strategy to appropriately invest in the future of the firm has been the right one, and we're beginning to see the positive effects of our efforts to manage our business more efficiently. We're also seeing the effects of our good investment performance for our clients, with 74% of our investment management AUM outperforming their benchmarks over five years. We've also seen the impact of higher performance fee revenue earned, driven by the standout performance of some of our strategies. Total group assets have increased overall, but we did see outflows during the first half of around CHF2 billion from investment management, which is offset by inflows in private labeling together with positive market movements. Client activity remains positive with our distribution strategy to drive a more diversified pipeline, aided by the continuing good investment performance. At the core of GAM's purpose, both now and during our long history, is investment leadership and innovation, both the key to help us deliver on our promises and to help protect our clients' financial future. As you can see from this slide, 74% of our investment management AUM is outperforming their benchmarks over five years. Not shown on the slide, but also worth highlighting, is that 79% of our Investment Management AUM has outperformed their benchmark over the past year. Our three year investment performance is lower and has been impacted in particular by the lower performance and the relative large size of some of our fixed income strategies. I noted earlier that we saw net positive flows across our equity platform, and I'd like to spend a moment looking at the performance of those strategies in more detail. You can see that most of our equity strategies are delivering top quartile returns, and this performance is leading to growth in assets and client inflows. To focus on some highlights, our disruptive growth strategy has seen an increase in AUM of more than 80% during the past six months. Other thematic offerings such as luxury brands and regional funds such as European Equity and Asia Focus have all seen AUM increases of more than 50% since the end of last year. We believe this growth illustrates the potential we have to turn good performance into inflows and to create a much more diversified foundation of assets than has historically been the case. This slide provides some context on the improving picture we've seen over the past year relative to the significant outflows we saw during 2018 and 2019. Our larger fixed income strategies can still have an outsized impact on our flows, but as I just mentioned, our strategy of building a more diversified book of business is beginning to have an impact, noting the positive equity flows we discussed earlier. In private labeling, we've continued to attract client inflows. However, as you know, we are expecting a large PLF client outflow in the second half of twenty twenty one. We're committed to achieving sustainable growth at GAM and have invested in talent and technology to support this. We are on track to deliver CHF 15,000,000 of savings in 2021. Making GAM fit for the future is a key enabler to us to achieve sustainable growth. We're continually investing in servicing our clients. In the first half, we opened new offices in Copenhagen and Singapore. We also appointed new sales talent in Switzerland, Asia, The U. S. And U. K. In the first half, we've appointed senior leaders in Luxembourg and Zurich, both in our PLF and Wealth Management business. We've also responded to client demand for sustainable funds by launching a sustainable version of our local emerging bond fund with additional launches or fund repositionings planned for the second half, including a climate bond fund, a sustainable emerging equity fund and a sustainable version of our systematic core macro strategy. In summary, while we have not yet achieved consistent positive net inflows, I believe we have invested well in the business and laid the foundations for achieving sustainable growth at GAM. I'll now hand over to Richard to take you through the financials in more detail. Thanks, Pete, and good morning to you all. Before I start, let me highlight that the actual half year results we are presenting here today are in line with the estimates we provided in mid July. As a reminder, we are required to release our estimated profits once they're reasonably certain, if they materially differ to our actual profits from the corresponding period last year. The significant reduction in IFRS losses caused this early release of our estimated half year results. Today, I will start off by giving you an overview of our financial performance and then focus on management fee margins, performance fees, our expenses as well as our progress on reducing costs before touching upon the IFRS numbers. I will finish by taking you through our cash and capital position. So starting with the financial summary. Compared to the first half of twenty twenty, the level of average AUM in our investment management business impacted our overall net management fees and commissions. These came in at CHF107.8 million, a reduction of 12% compared to the first half of last year. Much of this was driven by the sharp drop in AUM, driven by the pandemic at the end of the first and into the second quarter of twenty twenty. Strong performance in some of our funds resulted in an increase in performance fees to CHF17.3 million. I'll give more details on this shortly. Our expenses were at CHF120.6 million, a decline of 3% compared to the first half of last year. We are on track to deliver cost savings of CHF15 million in fixed personnel and general expenses in 2021. Our underlying pretax profit of CHF 800,000.0 is a slight improvement compared to the CHF 2,000,000 loss in the first half of last year. After reporting a negative operating margin last year, our profitability has now generated a positive margin of 3.6%. So now turning to management fee margins. Our blended investment management fee margin remained fairly stable at 51.4 basis points in the first half compared to 51.8 basis points in full year 2020. As previously stated, the largest impact on margins is the impact of net flows and asset mix. The main driver for the decline in the average management fee margin were outflows in higher margin strategies such as credit opportunities and local emerging bond. We continue to see some fictional pricing pressure of up to one basis points per annum. But the key driver for future movements is on our margin will be flow and asset mix. Our exit margin as at the June was in line with our margin for the first half of this year at around 51 basis points. For private labeling, our fee margin declined slightly to 3.9 basis points due to the mix of assets. The exit margin at the June is in line with this. Our performance fee eligible assets were CHF 3,100,000,000.0 as at June 30 compared to CHF 3,700,000,000.0 at the end of last year, with most of the reduction coming from systematic strategies. As you can see on the right hand side of this slide, our performance fees stood at million, a sizable increase compared to that achieved during 2019 and 2020. This was driven by strong investment performance, most notably in our disruptive growth fund and systematic strategies. As at the June, '80 '1 percent of performance fee eligible assets were at or above their high watermarks, with 12% within 5% of their high watermarks. Performance fees are notoriously difficult to predict. Therefore, I expect to see continued volatility in the level of performance fees being recognized by the group. Now looking at expenses in more detail. Personnel expenses, typically around 60% to 70% of our total expenses, were 3% lower compared to the first half last year. Our headcount declined by 13% compared to the first half of last year, which is reflected in the reduced fixed personnel expenses, which came in at CHF55 million, some 12% down. This is partly offset by an increase in variable personnel expenses due to higher performance fees and mix of management fees driving an increase in contractual bonus amounts. Our compensation ratio declined to 62.3% compared to 64.8 in the first half of last year. Our target compensation ratio by 2024 of between 4550% remains in place and this will be driven by revenue growth as well as continued cost discipline. Our general expenses came in at CHF33.9 million, 3 percent lower than last year. So summarizing, our total expenses were down 3% at CHF120.6 million compared to GBP 124,500,000.0 for the first half of last year. Let's turn to the next slide, so I can put this into context regards to our cost reduction targets. So in 2020, our fixed personnel and general expenses came in at CHF 193,300,000.0 and our guidance is to reduce this by CHF 15,000,000 in 2021. In the first half of twenty twenty one, fixed personnel and general expenses came in at CHF 88,900,000.0, which is a reduction of nearly CHF 9,000,000 compared to the first half of twenty twenty. So you can see, we are well on track to achieve our full year guidance. The SimCorp project is progressing well. This technology upgrade brings our investment teams onto the same end to end investment, and operating platform. The benefits are being experienced through each stage of the value chain, be it in portfolio management, trading, investment risk and client reporting. This enables us to better serve our clients and assist our growth ambitions, whilst providing significant operating leverage. We completed our move to workday for HR and finance activities. This is going to provide further efficiencies, greater internal transparency, better data quality for decision making and ability to turn off multiple legacy systems and bespoke databases. We have also completed the outsourcing of our wealth management client administration to Maltries. This will be an enabler for future growth by delivering high standards of client service in an efficient and scalable way. Similarly, this will also allow us to decommission various legacy systems. While we remain focused on delivering on our 2021 cost reduction targets, we will continue to drive efficiencies in future years. Turning to our IFRS numbers. The CHF2.7 million net loss in the first half of this year is significantly less than the million net loss reported in the first half of last year. Last year's IFRS loss was mainly driven by the full write down of goodwill, which was primarily created by the acquisition of GAM by Julius Baer in 02/2005 and UBS in 1999. Other items included in the IFRS numbers, but excluded from underlying results were not significant in the first half of this year. As mentioned previously, our underlying effective tax rate is less meaningful given the lower profitability of the group. Therefore, non tax deductible costs have a disproportionate impact on the effective tax rate. Until profits normalize, these types of costs will continue to have this impact. Now finishing off on cash and capital. Firstly, it's important to highlight that GAM is debt free. Our cash position at the half year was CHF $250,000,000. The decrease from the end of last year reflects typical seasonal effects such as compensation payments relating to the prior year. We continue to ensure our capital structures are the most efficient they can be through optimization across regulated and non regulated activities. Adjusted tangible equity increased to CHF196 million, partly driven by the remeasurement of The UK and Swiss pension liabilities as discount rates rose. We remain committed to our long term dividend policy with a target payout ratio of at least 50% of underlying net profit. We remain focused on sustainable organic growth and on further strengthening our capital buffers. With that, thank you, and let me hand you back to Pete. Thanks, Richard. I'd now like to spend a few minutes talking about where we're headed with our strategy and the outlook for the rest of the year. We've made good progress delivering against our efficiency and transparency goals to ensure that we have a foundation that is fit for the future. Therefore, much of our strategic focus going forward will be on ways to achieve sustainable growth. I'd like to spend a moment talking about three drivers we believe can support sustainable growth for GAM. First, deepening our product offering second, embracing sustainability and finally, growing wealth management. First, sustainable investing. As I mentioned earlier, we are launching a number of new sustainable strategies and have made good progress aligning our existing book with new SFR regulations. Secondly, thematic investments. We see these as a strength at GAM, which we're building on as investors seek to access more thematic building blocks in their portfolios. We're planning to deepen our offering around key themes such as technology, consumer demand and sustainability, with particular focus on luxury and Asian consumer as well as product development around decarbonization, circular economy and social housing. Third, in alternatives and solutions. GAM has a long history in alternatives, and I believe that both the hedge fund access offered by GAM and our own range of liquid alternatives provide return modifiers and diversifiers, which are increasingly sought by clients. The strength of our systematic core macro offering also continues to attract clients' attention due to its leading position in the market. Combining GAM's experience with our OpenHAIR architecture platform will enable us to deepen our solutions offering in order to help develop our wealth management business, which I'll touch on again in a moment. Sustainability is a key driver of client demand and core to GAM's purpose. First, GAM's objective is to set high standards at a corporate level. This year, we published our first sustainability report and a new stewardship report aligned with both The UK and Japanese stewardship codes. We've also joined a number of industry initiatives, including the Net Zero Asset Managers Initiative, which is designed to support clients in the transition to a low carbon world, and we support the task force on climate related financial disclosures. Second, we're working hard to ensure that we're embedding ESG into our overall approach to investing. We've developed an ESG dashboard, which allows us to evaluate and review ESG criteria as part of our regular review of investment risk. We are currently able to get full transparency on all our equity portfolios and around onethree of our fixed income portfolios. We're incorporating further ESG data to enable us to have a complete view across our investment processes in the future. As I mentioned earlier, we've also made great progress on SFDR regulation and new fund launches with more to come. I'd now like to spend a moment on how we're planning to develop our Wealth Management business. I believe that we have a real opportunity to make our mark on a fast growing global market. The cross border segment of this market is very strong in Switzerland and in Singapore, where we've just opened a new office. This opportunity aligns to our strength as an active investment manager, our Swiss heritage in wealth management and our new focus on Asia. I believe that we're well positioned to win a greater share of this market and to grow our business. At the heart of our Wealth Management business is our existing multi asset and solutions platform. This allows us to offer clients bespoke solutions alongside the expertise of our private labeling business, which can help provide fund structuring as well as manager selection expertise. During the first half of twenty twenty one, we've also implemented a new technology platform specifically tailored to support wealth management clients in preparation for growing this book of business. So what can we expect for the rest of 2021? We continue to invest in talent and technology, while also showing organizational discipline as we remain on track to deliver CHF 15,000,000 of savings. Through our growth initiatives, we plan to see a range of sustainable and thematic fund launches alongside the development of our Wealth Management business. We expect the market environment to remain challenging, but believe that we're well positioned to service client demand across a broad range of products. Our financial targets remain unchanged, reflecting our belief in the potential of our business and the scalability of the platform that we've built. Thank you all for your time on the call today. That concludes our presentation. And we'll now open the call up to Q and A. I can see a number of questions already, so thank you for those. If you do have further questions, please do submit them. Perhaps I'll start. Michael saying thank you for the questions that you submitted. A number of questions there, and I suppose the theme that you make is really around GAM's cost base and specifically the number of staff that we have. And then I think you also touch on questions around the PLF business and I guess the strategic rationale for that. So maybe just to address the cost base. Certainly, as Richard mentioned, the last couple of years, we have been deliberately resetting the cost base at the firm to reflect the lower AUM, but also to allow us to take advantages of the investments in technology that we've made. I'd say that we are doing a good job of resetting that cost base. You'll see the headcount is continuing to reduce. And I'd say there's a slight balance there between obviously wanting to have as efficient a cost base as we can, but also to maintain the very high quality of client servicing that GAM delivers. There is consistent client feedback that GAM actually does very well relative to peers, and it's something that our clients appreciate in terms of the focus that they get and the servicing they receive. So we will certainly continue to work hard on that cost base, But I do want to preserve what I think is a key part of GAM's value proposition, which is a very, very high focus on servicing those client relationships. Organizational discipline is something that we're certainly pushing through the firm top down. We're also being very thoughtful really to consolidate on the gains as the technology work and the reorganization work that we've been doing for the last couple of years. As that starts to conclude, we do see more opportunities to increase efficiency. So certainly, don't disagree with the overall thrust of your questions, which is to make sure that GAM is appropriately sized for the AUM. In terms of PLF, as I say, I do view that as a strategic business. It certainly is an enabler of innovation at the firm. It does allow us to be faster in terms of launching and repositioning funds. And I think that capability is something that other asset managers do also seek. And when they are a bit slower in that regard, it does hold them back. And as you know, I'm certainly a believer still in the potential of cross selling opportunities between that business and investment management. And as we've said before, I think it does offer the GAM Group a very useful diversifier from a financial perspective. Thank you, Daniel. Just seeing some questions coming through from you. What makes us so forgive me, I'm just reading this as we speak. What makes you optimistic about wealth management plans, particularly in Asia? When you talk to GAM's clients in our existing book, we have happy clients. We have clients who really appreciate their investment performance. They really appreciate the servicing that they get from GAM. And when you look at that book, although it's perhaps been a bit overlooked in recent years, there's extraordinary heritage there. This is really at the heart of the Swiss business and I think that can resonate well with an Asian client base. So we're certainly looking to be proud of that heritage, but also use all that knowledge that we've built up about how to service these clients and how to deliver them the investment solutions that they're looking for. So I think it's not a new business for us. I think that we can grow the business without necessarily changing the nature of that business. We're not talking about adding in new services. It's really to focus on our core, which is providing the asset management products. And then if we can leverage the fund structuring and wrapping services that we have available through private labeling. Perhaps, Daniel, your second question, I might pass to Richard when talking about our guidance on costs. And your question is around, does this imply a largely flat fixed cost base for the second half? Thanks, Pete, and thanks, Daniel. I guess there's always many moving parts within an overall cost base, and your analysis is right, it would imply that. But what you have are the continued ability for us to reduce costs. But as we bring on the much of the technology, which we have been investing in, that starts coming into our operating expenses as well. So there's a sort of a mixed effect or a gross effect as it were, of what's happening within our cost base, which, obviously, continued ability to reduce our costs in certain areas whilst the investments which we're putting in place are clearly coming to our cost base. You asked a question about due to new hires, would we expect our fixed costs or fixed personnel costs to grow above the current levels? I wouldn't expect that because we are investing in the business, as Pete has been very clear, it's important that we do to grow the business. But at the same time, there has been there's opportunities for us to drive further efficiencies across the firm. So I wouldn't expect that to see that increase. Thanks, Richard. Just turning to Michael ZKB. Thank you for your questions. Three or four questions here. What I might do is ask Richard to talk to the history in AUM and the fee schedule of disruptive growth. And I will start with your questions in reverse order, if I may. So your first question was around wealth management. We touched on that. Your question in terms of types of clients, locations. So the current book of business is sort of split between ultra high net worth. So this is the book that we have today. And then you also have a segment across sort of charities and then moving into more family office type arrangements. I suspect that most of our growth will come either from the high end of the ultra high net worth or as you go into the more institutional type offering into family offices. And certainly geographically, we see Switzerland as a great base for that activity. Obviously, we have a presence in Zurich. We're thinking about Geneva as a key hub as well. And Singapore, you know, just as a as a launch pad into that Asian market. We do have history with wealth management and have historically serviced clients from Hong Kong. We changed that few years ago. But I think Singapore is really helpful in giving us just a center of gravity in that region that I think will be good in the long term. So we're pretty excited about all of that. Your second question was about private labeling and the question really being with the large client loss that we've been notified of for the second half of this year. The question is, is it still worth the effort to have this business? Absolutely, it is. As we've spoken about before, there is sometimes a mismatch in that business where it is possible to have an extremely large client by AUM, but they may be relatively smaller in terms of their revenue impact. So when I look at the type of clients that we'd like to service there and the risk reward profile at different pricing points, yes, the PLF business absolutely remains attractive. I don't love losing clients. I want to make sure that our proposition is really compelling and that we do keep clients for the long term. Unfortunately, occasionally, there are sort of strategic drivers for a client, which may mean that they it is in their interest to move, and we have to accept that. But absolutely, it doesn't change my conviction around the business or its strategic use going forward. Your third question is around sustainable investing. Your point being, listen, everyone claims to do it. How do you differentiate? I think your point is really well made. And the one thing that we're not doing is we're not approaching sustainability just to tick a box. That's absolutely not how we think about it. When you look at what we're doing at a corporate level how GAM's employees respond very passionately, it is something that is real for us. That's why we're taking a bit of time with this. I think it's been observed before that perhaps GAM is a bit late to launch some of this sustainable product, and I think that's true. But it's really important to me that we launch this properly and that our products really do stand up and we can articulate clearly what the value proposition is and what we're doing from sustainability perspective. We've got fantastic talent in the firm, leading our sustainability efforts. And so although I think we have to be realistic that GAM is at the start of its journey there, I do believe that we can take at least a full leadership position here. We do have really interesting views and I think different views internally. We're pretty proud about that. I think it also reflects the history on the investment management side. We really encourage that thinking and thought leadership. So I think we will carve our niche here. We do see client demand and interest in the products. We will launch them thoughtfully. And I think we will be able to build momentum. So again, we want to start off slowly, properly, make sure it's very coherent. But I do think from there, we can really build momentum. So again, excited about that. Finally, maybe I'll turn back to Richard just to touch on the history of the Disruptive Growth Fund. Thanks, Pete. Hi, Michael. Yes, so the Disruptive Growth Fund, that was previously a more focused fund around technology. So it's been a fund at GAM for, many, many years. But more recently, the strategy around that fund was developed further to be more looking at companies which are disruptive, but utilizing technology in their industries. The AUM, the actual fund AUM for the named fund is over GBP 800,000,000. But the overall strategy is managing over GBP 1,000,000,000 of assets, given some of the mandates, which we also manage, for clients outside of the fund. In terms of the fee schedule, I'm not going to give pricing on particular products, but it's very clear that the fees earned on this fund, as with most of our equity funds, as you can see, would be above our average fee margin. But this is in line with what we would earn on other equity type products. So we give disclosure, I think in the back of the appendix as to what our average margin is on our equity book and that's pretty much in line with that. Thanks, Richard. And Daniel, thank you. Just I see a few more follow on questions. You have three of them. Again, I think I'll leave one for Richard on gross margin, and I'll pick up your two points again coming back to wealth management. Your question being, where do you see your USPs versus more established players, particularly since lending is not part of your offering? Absolutely take that point, Daniel, and I want to be sort of clear that we're not looking to add things like lending into GAM's wealth management proposition. I sort of reviewed how GAM operates in the market today, and what we do very well is we partner really well through the the ecosystem of different providers that that work in wealth management. So I don't see this as being a competitive shock in any way to that existing value chain within wealth. And what GAM does well is it offers interesting and, we hope, strongly performing investment product. That investment performance, I think, is largely what means we have these very long term happy clients in this book of business. So what we will seek to do is to do a better job of positioning our offering with more commercial energy. And that means thoughtfully increasing our staffing and commitment to growing that business segment and to having more energy in our business plan around that. Because I do think that the role of the the active manager, the discretionary manager within these wealth relationships is important. I think clients don't necessarily want to have all of their assets with one provider or one underlying product. So that means that there is a marketplace for us to partner with other providers. And I think we have some really interesting good products that we can offer. So it is in some ways the same business that's always been there, but with a lot more focus and a lot more drive and confidence that we have something that's good and a heritage and particularly a Swiss heritage that we can be proud of and I think can resonate geographically, particularly through Asia. And maybe turning just to Richard on the gross margin question. Yes. So the question is around management fee margin has and investment management has trended lower for a while. Is there any change in that trend? And what are the sort of levers at hand to drive pricing strategy? As I said in the presentation, the real driver around our average margins is around the asset mix driven by clearly flows and also obviously market movements as well. So that's what has really driven the reduction in our average margin in the Investment Management business over the last number of years. Clearly, the loss of the ARBF assets, which were above our average margin at the time, brought down our margin. But also where we've seen some reduction in assets in higher margin strategies, picking out the systematic strategies as one example. But what I would say is, we've clearly seen a stabilization in the AUM since the pandemic. And therefore, we've also seen a stabilization in that average margin. Where do we have levers around pricing? I mean, pricing is a very much market driven, aspect. It's important that GAM are commercial, around pricing, but at the same time recognizing that the quality of the investment products which we're offering to clients. So I would say that the levers are there to ensure that we deliver the right differentiated products and therefore that can help protect the pricing around those products, but also at the same time being commercial. In terms of where we see the margin, We do see growth opportunities across various elements of our book of business. Generally speaking, I would say that the growth opportunities are in products, which are above our average margin. So even though there will we continue to see some market pricing pressure, we also have confidence in the fact that we see growth opportunities in products, which were priced above our average. Thanks, Richard. Ascot, thank you for your questions that have just come through. I'll take these and obviously Richard can chip in. Your first question is that we are repeating our comment that we have high interest from clients and good performance in our products. And your question is, so what then is the biggest stumbling block to people investing in GAM assets? I think from the client perspective, I mean, stating the obvious, obviously, we're in a very competitive environment. You have to work very hard to make your case for any client that you have the best product for them. I think GAM is good at that. But as you know, we've been on a recovery path since 2018, '20 '19. And the timing it takes both for clients to make asset allocation moves in certain segments of the market, that takes a long time. Those decisions take time, so it takes time to make sure that GAM is positioned in a relevant way and a compelling way for those clients. And once we've achieved that, it takes more time for the asset allocation moves to come and for us to seek to compete for those assets. I've talked before in earlier years about some of the structural barriers that were historically in place around buy lists and so on, and we continue to make progress there. So again, it takes a bit of time. Once you return to a buy list, it does take time to then work your way up into the line of sight for the clients and then the subsequent sales. But I'd say we're definitely seeing progress there. So I think time is is an element. The other thing that we're doing, you know, we've touched a bit on the diversification of flows, you know, and that's not by accident. That's by virtue of, a lot of internal education and sort of thoughtful positioning across GAM's platform to make sure that clients know us for more of our products. Certainly, GAM's been known historically for probably a smaller number of products at any one time. We want to make sure that our shelf is more broadly understood. And again, that takes time, but I'd say we're starting to see the flow across the book, which is certainly encouraging. You're also making the points around the first half was certainly helped by positive performance fees. That's absolutely true. We don't tend to count on performance fees. As you say, they can be quite volatile financially, so we don't tend to count on those. What I would say though is it's taking time to build momentum, but once you get some momentum, it's really helpful, you know. So when I'm looking at the flows quarter on quarter and trying to have a sense myself of what is the direction of travel and and where do I think we'll land financially, It takes a lot of effort to get the ball moving. It takes a lot of effort to get that initial momentum, but I do think we're getting there. In terms of planning for the absence of growth, as was pointed out earlier, the firm still does have a fairly significant cost base that gives us room for maneuver if we did need to alter the cost base for any reason. But I don't foresee that at this point. I think we've got a good balance of, as I say, protecting the good client servicing, keeping our distribution potential really high. We have the right people in the right places. We have good products and good performance. So I do want to protect that avenue back to growth because I think that is key. I would much rather have all the value that I see in the GAM platform operating well at an appropriate sized AUM, that is what I think we can achieve. But as I say, I think we do have do have options if we need them. Maybe just pause for a second just in case anyone is typing a final question. And thank you for submitting through the WebEx. That was really helpful. Apart from trying to read them at the same time as talking to you, I hope that worked fairly well today. Okay. With nothing further, I'll just say thank you. Thank you for attending the call today. If you do have any further questions, please do feel free to contact GAM's Investor Relations, and that's Charles and Jessica. I'm sure you're very familiar. I'll be more than happy to help you. So wish you all a very good day, and thank you again.