Liontrust Asset Management (LSE:LIO) — Final Results

0:01 Good afternoon, and welcome to the LIONTRUST ASSET MANAGEMENT PLC for final results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be at any time by the q and a tab situated in the right hand corner of your screen. 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 as the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Simon Hildre, chief marketing officer Vinay Abrol, CFO and John Iins, CEO. Good afternoon to you. Good afternoon. My name is John Ives. I'm chief executive of LIONTRUST and have been so since for for the last thirteen years.

0:52 I'd like to thank you all for giving us this time to present to you on, you know, the opportunity set that look, for for LIONTRUST. This is on the obviously, on the back of our financial results, which Vinny will go through in a moment. I'd probably just like to sort of start by an introduction to LIONTRUST by no intention of talking to the points on those slides, but you can see where the business is now. When I joined around thirteen years ago, the business was a billion pounds of assets under management and has now grown, as you can see, successfully to 33,500,000,000 of assets under management.

1:40 The strategy has won have been one of and and I suppose my experiences over the last thirty five years in fund management, And the opportunity set when I started in LIONTRUST was to look at, you know, what what's good about that business and what can we do with this industry. And if we look at the whole savings industry, in general, and you look at the move from defined benefit to defined contribution, you know, what is the key factor that has come out of that? Defined benefit final salary schemes will always link to, you know, your length of service and your contributions into a product. The shift to defined contribution and the sort of moves that were made along that time were that the individual took ownership of their investments.

2:37 And from my point of view, that was the most, you know, the most important point. This is an industry that's grown up and telling people what it needs to what they need to invest in, how they need to invest for the future, and what they should do. And I think what we've seen over the last ten or fifteen years, and certainly in the development over the last five years and through the pandemic, is the individual taking control of their own savings. After all, that's why you're all on this court. So what we try to do or what we have done is put the client very much at the center of what we do. We explain the process of how we manage money. So if you look down, you will see that we don't have a chief investment officer at LIONTRUST.

3:26 Why do we not have that? If you look at the big investment houses, where you look at compliance, you look at risk, and you have a chief investment officer. In fact, some have several chief investment officers. You're looking at how do we mitigate risk, and therefore, do we stifle the individual's ability to manage money. On the other side, what you don't want as an investor is you do not want a fund manager to be able to play for better words fast and loose on on what they're doing with, you know, long term savings. These are savings that we are, you know, the guardian of that have taken people thirty, forty years to accumulate. So what we look at it, I'm just is how do we attract the best talent? How do we create an environment for them to run money the way that they want to run that money? Right? So it's very much about process.

4:22 We will create that environment where all you do is focus on that that process. And not only do we now, we look at we use external people to coach on the fund management side to say, how do I you know, no fund manager gets every decision right, but how do we improve the probability that the next decision we make has more chance of being right than anything else? And if you think about it, if you look at the professional athletes or in sport, you know, fund management, you know, is no is no different, but you need to be able to create the framework by which people can be consistent in that in those outcomes. So that's what we do. That's why it enables us to attract people.

5:11 We have seven teams across that, so by no means do we mean to have the answers for all investment strategies, but the areas where we think we can add value as active fund managers are the areas that we'll focus on. The other side of that equation is, you know, if you do that, we provide a route to market for what you do and in terms of communication and delivery and understanding. And those are all areas that in an industry that often uses jargon to make it very opaque, lacks transparency, if you think about it, there are hardly many industries where everybody of a working age in The UK has a pension.

6:00 Now if you look at that relative to any other industry, the level of trust within the industry is is very poor. So what we're looking to do is explain to people what we're doing. The present climate is no exception to that, where you've got an awful lot of short term noise going around in volatility, uncertainty about the future. The one thing that you want out of your investment team is not to be chasing short term gains. You need people to be looking at, you know, other companies that we invest in, you know, or we invest in them for the same reasons that we invested last year. And if I look at markets now and we look at falls, you know, all those companies half as good as they were a year ago or you know, were they twice as good a year ago? So to have that anchor, to have that focus, and to have that confidence in being able to manage money, you know, we're managing money for people's long term savings.

7:08 People's savings are five, ten, twenty years twenty years out. What you don't want is people, you know, taking short term decisions because they think something looks cheap on a short term basis. So with the fund management side, that's key to us. With the distribution side, being able to communicate on process and to sell on that and to engage with our client base as to how we forward, are the two base tenets of that business. If we get that right and we're disciplined in the way that we run the business, the result the results will come through.

7:55 If we go through if you look at the rise of the business there, that is very much I often think when I, you know, when I talk to shareholders, I do shareholder presentations. It would be much easier to say, if I was at Apple, I would have a new innovation, I would have a new product coming out on a regular basis. You know, what do we do? We do the same in in 2011 as we do today. You know? We we how do we get at the edge? How have we grown to be, you know, a group that in terms of inflows, you know, was second in the industry last year in terms of net flows, you know, it was all regularly in the top 10 in terms of gross flows.

8:42 There's no secret sauce. There's nothing magic to that. It's very much about if we do the day job, day in, day out, that that will give us the advantage because that in itself is quite hard to do. That's why our process fits through what we do on fund management, what we do on sales, what we do on marketing. And so, you know, the strategy for growth has has always been based on a three pronged approach. Organic growth is what Vinny and I and our management management team focus on on a day to day basis. That's what we can affect on that day to day basis. Now the other two areas are talent hire or or acquisitions.

9:33 Talent hire is where we would bring in a new team or a new fund management discipline or skill set. The issue you always have with that is that it takes three years to get a three year track record, or it takes you have to get a a critical mass in that asset class to start with to be engaged to engage with your larger clients. So that brings in the third opportunity, which is acquisitions. If we look at acquisitions, buying assets just to fill up silos is not a very profitable way to run your business. The financial services industry is littered with examples of people who have bought businesses on the basis of if I take a 100,000,000 of cost out, I put a 10 multiple on it, I've created, you know, a billion pounds worth of, you know, market value.

10:28 That in the short term may work. The problem with that is if you haven't got a product that is focused and delivers to the end investor what they require, you will just see the slow attrition of assets over the next two, three or five years. What we've tried to do through our acquisition policy, you know, with JD, the more recent one, Arquitas, Neptune, and back five years to LIONTRUST is to say, what are we looking for with this business? How can we grow it? We're looking to grow it by either adding to our manufacturing, our investment management skill set, or our distribution skill set.

11:14 And if I can do that, if I can use acquisitions to give me a distributional manufacturing benefit, it fast forwards that grow your own development. And if I look, you know, down the line, you see with the LIONTRUST, that was a business we bought in April 2017. It was a business that was probably two years in the making of discussions with me and that previous chief executive as we could go there. It was an area that we'd want to invest in on the sustainable side. It's an area where the brand awareness now of LIONTRUST is, yeah, in the retail market, the strongest and sustainable.

12:01 It's been responsible for, you know, strong inflows into the business. When we bought them at 2,500,000,000 and they've and moved forward to 30,200,000,000. When we bought them, they had a sixteen year very successful track record. You know, that's continued over the next five years. And apart from, you know, in the short term where performance looks weaker because of the exclusion of, you know, sort of energy or carbon emitted stocks in their portfolios, you know, at a time where you've got, you know, I would say unprecedented, but it's not necessarily unprecedented, but, you know, terrible events in The Ukraine and the squeeze on energy prices, you're going to look weaker when, you know, there's a short term scramble for demand. On the other side of that, if you look at, you know, sources of alternative energy and moving forward, there's probably been no more no more one event that has focused people's attention on that. The lack, The lack of opportunity to provide short term replacements does not take away the opportunity set of where the direction of travel is. And I think that's back to having strengthened your convictions, the investment process, and the focus on that, and to be able to create an environment where fund managers

13:31 are not being affected by, you know, short term noise or or headlines. So, you know, from there with Neptune, that was a deal that brought broadened out our manufacturing base, gave us more global product and were areas of demand and client base. Orkitas was a business we bought from AXA, the French insurance company. It bolstered out our multi asset offering. It also bolstered out the level of service we could provide to the intermediate market in The UK, where they are increasingly from a regulatory point of view moving away from managing assets themselves to looking at risk rated portfolios they could provide to clients and the support they could get from that.

14:31 More recently,

14:35 J. D. Acquisition was one of LIONTRUST's core business and strengths has been to build a very strong and successful brand in retail in The UK. We've been it is awarded, you know, fund manager of the year in that retail space to investment week. And what we looked at was, you know, how do we develop the business into other distribution opportunities? In my role, there are no lack of opportunities to grow the business, but what I have to look at and to balance is where are we capable of growing and how do we do that.

15:24 After the people in the business, the most important asset we have is time. You know, how do I allocate that time across, you know, the different resources inside of the business and the different

15:40 routes to market, want of a better word, because obviously I have the opportunity cost of where do I take that resource away from. So to be able to enhance the distribution that with a small institutional business it had recently won one of the local authority amalgamated local authority pension funds. But with the acquisition of McJady, that brought to us an awful lot more of the plumbing in terms of how you get out to not only the consultants, but an existing client book of business. And so that to me rounded off or enhanced what we had there and set a very good foundation and platform to go forward from. So acquisitions get headlines, but they've got to be to the strategic benefit to the business.

16:34 You know, size is not, you know, the result. You've got to come out the other side of that with something that is useful and and provides you with focus. If I, you know, move on to, you know, slide nine, but I suppose this is one of the, I suppose, benefits, but also the distractions of the moves that we've all made to, you know, teams on digital presentations. A financial services industry that, you know, has found it very difficult to engage with a very broad base of clients, has been, I suppose, moved forward rapidly, you know, in the last two or three years, predominantly forced by, you know, the pandemic and our ability to do that. But believe you me, to talk to a screen and not to be able to get recognition back from the client base, you know, is is a much, much harder thing to do. So if we go through, I will take it as red nine and ten because, you know, you're much better at reading things than I am pointing things out.

17:56 And so if I look at where our business sits now in terms of our assets, We're very strong brand in sustainable. We'll be number one brand there on the in the retail marketplace. A very, you know, key and core part, you know, of our business. And I think and that broader responsible capitalism is how do we move forward. If I go back to my career ten years ago, well, maybe even only five years ago, the questions on sustainability were all at the back of any client meeting. They're now the first questions that you get. It is an area where there is a lot of noise, data sets are inconsistent, levels of knowledge are poor, but they will improve rapidly over the next three or five years. And I think if you ask any client, and this is very much part of that transition from defined benefit to defined contribution, if you ask any client how they would like their money or would they like their money invested in a more responsible, sustainable way, the answer is going to be yes.

19:16 That's definitely what we found. I think now with a lot of noise, and you get it from, you know, HSBC making comments in Miami to which have been raided in Germany, the regulator, the FCA, and The UK yesterday saying everything needs to be more evidence based. For me, that is perfect because the most overused phrase probably in the industry now is this is embedded, and if it becomes evidence based, you're going have to be able to demonstrate that and to show it. And if I talk to our institutional clients, they're saying they want to allocate money. They're being driven to allocate money, but there are lack of appropriate products to be able to do that. So I think if you can demonstrate and not just pay lip service, it's a huge growth area for the marketplace.

20:20 The other product says we have a very strong franchise under economic advantage, an excess of twenty years of great UK equity across mid, small, large, and microcap funds, you know, an enviable track record there. And and that is, you know, an area where, you know, if I'd said to you three years ago, people have the lowest UK equity weightings, I'd have been wrong. You know, people have continued to do that, but what we find there is that the sale on process, the ability of our clients to understand where we're looking and what we're investing in that quality growth sector of the marketplace.

21:07 You know, it is about providing products that are, you know, the most suitable for them or what they want in that space. And I suppose you know, it's it's it's a little strange at the moment, but having done a few client meetings over the last month, when I talk to people about what's going on, well, they, you know, turn them on and say, you're the least of our problems in that place. Now that's, you know, that's not a strength, but what they know is what they bought us for. What they know is what we'll, you know, adhere to and stick to, and that fills the requirement within portfolios for clients. So, you know, that is very much the badge of LIONTRUST in terms of, you know, we will stick to what we know we're good at. We won't deviate away from that.

22:02 In the short term, that may look, you know, performance wise weaker, but in the long term, as our, you know, results show, that's what we know, you know, is right. If I get back through my career, this is not too dissimilar to 2001 to where it was called the dash to trash at at that stage. Now it's not to say that sentiment, you know, is the same now, but to throw the baby out with a bathwater and to move forward is is not what you want your fund managers doing. So, you know, there's a lot of importance from my point of view on giving the fund managers the confidence, the freedom to stick to what they're doing and the support whilst running all the checks and balances across that.

23:03 Slides thirteen, fourteen, 15 say where we are with things as to, you know, the next ones you're capable or more than capable of running that. So if I hand over to Vinay now at the start of 19. Hi there. Okay. Thanks everyone for joining us for the this presentation. So I'll I'll maybe spend just a few minutes going through our our financial results and and the highlights. The strap line there show, you know, we're demonstrating a profitable and growing business. And maybe I'll come back to that in a moment actually because there's another slide that shows how we've done over the over the years. But what you can see here are the key metrics for our financial year just ended at the end of March. So we've we've grown our gross profit or revenues in sort of an old language, up 41%.

23:58 And that includes Kuzaneman performance fees. And if you take performance fees out, we've grown the underlying revenue of the business by 46% over the over the course of the year, where our average AUM is up 43%. So we've we've shown that we've been able to grow our revenues, you know, faster than we've grown our average AUM over that period. That's translated into an adjusted profit. And we use adjusted profit to give you a indication of the underlying profitability of the business, stripping out some of the the charges that have related to acquisitions, which vary year on year. The adjusted profit was up 64% at £96,600,000. So, again, up 64%.

24:43 I think what that shows you, it shows you that in a in a well run business,

24:48 you should be able to grow your profits faster than your revenues, and that's what we've we've been able to do. Our EPS, our adjusted diluted EPS, it shows you on a per share basis the profitability after tax, again, up 59%. So slightly less than the adjusted profit number, but that reflects the number of shares that were an issue. And that financial performance has resulted in us being able to increase our dividend by 53%. So 72 p, we've just got ex dividend 50 p second interim dividend today. Today? Yeah. Yeah. So so what you see there, you see a business that is performing well. You know, we're growing our revenues. We're growing our profits faster than our revenues. Our costs see on the next page, our other other costs, other admin costs around the business are up 26%. So we've got good cost controls, and that financial performance has translated into a, you know, increased dividends. Shareholders are benefiting for a substantial increase in our dividend for the full year.

25:52 The next slide just shows you some of those numbers again in a bit more detail on on on the metrics. Another another key metric I'd just like to highlight, adjusted operating margin. Now operating margin is how much of your revenue is coming to the bottom line in profit. So it's a good way for investors to look at a business, see, you know, what what is what is dropping down to the bottom line. And and you've seen with us a progressive increase in our adjusted operating margin. So it shows you that our business, as we grow, is running more efficiently. And it's one of those things sometimes people talk about operating leverage. So, you know, the more revenues you have, the more profit you should make because you shouldn't need to increase your cost in line with your revenues. And that's definitely the case with LIONTRUST. And I'll I'll there's another slide that will show you that in a bit more detail. Another really important metric on this slide are average revenue margin.

26:51 So are we are we getting this extra revenue by slashing our prices to get extra assets on board, more revenue, but, you know, we are we are actually sort of, you know, killing ourselves on our on our revenue margin. So you can see here, you know, last year, our revenue margin was 62 not point 62%, 62 basis points. So that is effectively, you know, how how much, you know, of of the funds we manage, what are we earning in revenues? Last year, just gone, it was slightly higher at 63%. So it shows you again that we are, you know, increasing our AUM, but we're not cutting prices. You know, we are we're being able to maintain, our management fee on the products that we that we run. Some of this is mix related. You know, we have products across a wide range of areas. John touched on the various investment teams earlier, and each of them have different margin rates. So so some of that sometimes that affects that, but it shows that we are able to maintain our margin in in what is actually a very, very tough business for for fees.

27:53 The next slide, unfortunately, is a is a lot of numbers, but it shows you and it's it's quite an important slide actually because it shows you the progress blind trust. And it's and and at the top, you're high we're highlighting, so the acquisitions that we've done over the over the years. And it comes back to that strap line on the on the previous slide where, you know, we we can demonstrate here that, you know, we are, you know, a a profitable business that's growing consistently. And you can see over and this goes back to 2013, so nearly ten years. You've seen that we've grown our AUM, assets under management or future revenues, from 3,000,000,000, yeah, in 2013 to 33,500,000,000 at the end of the last financial year, which became 38.7 with the Magelli acquisition.

28:39 So you've seen consistent AUM growth over that period of time. And you can also see that that has translated into consistent growth in revenues. So the revenue sometimes is out of kilter with the AUM growth because of the way the averages work. But you can see that we've we've delivered that with that with the AUM, we've delivered revenue growth. And in turn, that revenue growth has delivered growth in profits. So we've been we've been able to translate that revenue growth into profit profit into dividends. And you can see, you know, it's only nine years ago that, you know, our our dividend was 1p a share, and we've just paid out 72p a share. So so you've seen that, you know, we, our shareholders benefited from that growth in AUM, revenues, and profit.

29:33 Operating margin, touched on operating margin before. Again, you can see that consistent growth in operating margin. You know, we are, you know, we're we're operating now as we've grown into the into the 30,000,000,000 level and profits close to a 100,000,000. We've grown into an operating margin of over just over 4040%. So I'll maybe go on to the next slide. I think the next slide, we've got some key metrics in AUM. So maybe maybe I'll just and just just covered covered most of these points on the team side of things. The interesting slide here, like, the the chart on the left shows you, you know, LIONTRUST is predominantly a UK retail business. So if if you take the The UK retail line of 64% and the the multi asset at 71, you know, over 80% of our business is, I think, sourced

30:26 through The UK retail channel. But, you know, we have a substantial amount of AUM in institutional, you know, just under 5,000,000,000, and that's been boosted by the Maceni acquisition and small amount just under just around 6% in international assets, which are managed out of London, but are sold into into Europe.

30:48 Client type, again, very much influenced by our folks on UK retail. Again, the majority of our our client base is through that intermediary wealth management space. That chart is excluding the Jetty. When we have Jetty on board, that will that will take us into a more, you know, a more institutional type basis. I won't get I think John's already gone through the the teams actually, so I I won't dwell on that. And then you've got another slide here which just shows you, you know, drills down into LIONTRUST ASSET MANAGEMENT. Where is where is the AUM that we manage? Five years ago, you know, our business was all a 100% UK assets, 100% equities. And you see what we've done through the acquisitions that John's talked about earlier.

31:37 We've built a much more diverse fund management business. You know, we we now have, like, 60% of our AUM in The UK. Now substantial amounts in America, Asia, and Europe. Yeah. We have 74% of our so 74% of our AUM equities. So, again, we are we're not only much more diversified by region, but also much more diversified across across asset classes. So so what you're getting with LIONTRUST is actually, you know, a a more diverse business than it was five years ago. And that that is a a key strategic aim for us to to to have more diversification in our business. The next slide just shows you, again, our AUM in a a tree burst type approach.

32:22 And and what it shows you is that, you know, especially in our funds, multi assets actually is is a group of funds actually. You know, we have a broad range of funds. You know, our largest fund is a special situations fund, which is just just around that £5,000,000,000 mark. But if you look at sustainable investing, you know, a broad range of large funds. So it shows again that point that we are a diversified asset manager. And maybe we'll finish the the presentation just with just a little bit on on Outlook. Pick up on up on those points that none of them will be new to anybody who's looking to invest in the sector. You know, we have a savings crisis before people, you know, now have an ability, you know, or own it. People have taken shift from d b DC. People have taken ownership.

33:19 Sustainability, you know, is a big part of that next generation of investors. But, generally, from our own, you know, research and and and feedback, we know that if I talk to you about the shape of the yield curve, most people switch off. If I talk to you about a transition for cleaner, greener energy, decarbonization, social equality, I found a medium by which I can invest with this much broader base of of investors now, something that people get it all passionate about and and care about. So I think for an industry that historically hasn't done itself no favors by making itself impenetrable.

34:06 I've referred to it in the past, I am Catholic, so it's been like Catholicism where you use Latin to become highbrow. You you've got to find a language that which you can build trust with. Trust is not right across the industry, so to be able to explain to clients what's going on and and where they are is is is massively important. The m and a side is the bit that everybody focuses on. There were several, you know, questions that I could see, you know, examine the chat side there. You know, this is an industry that hasn't executed m and a particularly well. But if you bought put two businesses together to and take costs out of them, and you put a multiple on that that, you know, makes a business look fine, that that's all very well and good. But if you come out of there without any, you know, focus or strength or a stronger proposition, it it doesn't work.

35:18 I think, you know, where we've been, you know, different or where we've maybe not even different, but what we try to focus on is what do we buy and what do we want to achieve. You know, in any acquisition, day one, we have already made the decisions that we want to make about the structure of that business and the way it's gonna go forward. They may not be right, but, you know, in business, you get you know, there are three types of decision. Good decision, bad decision, you know, neither of which will you know, one obviously is great, one won't kill you. Indecision is the one that generally does. So you've got to have a clear focus of what you want to do, where you want to be, and even if you've made a bad decision, you've got to be able to to address that and and look at how do we improve it going forward.

36:11 So that helps you get that focus going going forward. There are several opportunities around the market

36:23 Now but if I look at them from LIONTRUST point of view and I look at them over the thirteen years that I've been here, you know, what's the difference? The bar is definitely higher now,

36:37 Eighteen years ago, you can only execute the deals that you're capable of being able to execute. You know, we're, you know, fortuitously now maybe in a position where, you know, we can you know, we've got back in our own strength and demonstrated for my track record to be able to do things. But just because you can execute something, you know, is not the reason for doing it. You know, the things that add value are the organic growth and the focus of the business. Acquisitions should be used purely to take you into new sets of and to move forward. And then you've got to balance the resources of the business against that as you do it. So whilst acquisitions would grab headlines, they will may not always grab you the best results.

37:32 I think getting where we are now, broadening out our distribution capability, the move more towards institutional will allow us to broaden out our product suite, You know, more longer term limited liquidity product that may not sit well in the retail marketplace, would sit well in the institutional side. So that will help us with aid us with our development there. I think, you know, very much as we went into the pandemic, I said internally at the time with the shareholders, I'm you know, where markets go, where flows are, I can't, you know, affect. But what I can affect is when we come out of it, on the other side, do we have a stronger market share?

38:22 And that you know, the the ethos here is very much about doing the day job, day in, day out as best we can. That's what we can control, and that's what we know will give us a competitive advantage because we maintain the highest standards inside our own business. We know that will take us forward. I think on that point hand back to investor meeting. John, Vinay, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just using the Q and A tab situated on the top right of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard.

39:07 As you can see, we received a number of questions throughout today's presentation and thank you to all the investors for submitting those.

39:13 Simon, could I just ask you to read out the questions to the team where it's appropriate to do so? And then I'll pick up from you at the end. Yes. Thank you very much. And thank you to everyone for submitting your questions. There are two or three that kind of pick up on your last points, John. Maybe just on the acquisitions, do you expect further consolidation?

39:34 And how competitive is that acquisition in the industry? People have thought about you know, consolidation for the best part of thirty years. I mean, it does happen. Things happen. It happens either at the top where it becomes a size. Think, you know, if I go back ten, fifteen years, you could argue that the larger you've got, the more able you were to offer a lower cost solution. So if you're running $2,550,000,000,000 in a market strategy, could you cut my lunch and offer that service cheaper?

40:19 Now we've always been very, you know, firm on price. We've probably turned more money, you know, or a similar amount of money away where people have said, we'd like to give you a lot of money, but we would like a, you know, cheaper price. Now your ability to outperform is a function of capacity in that in in that marketplace and, you know, to be able to deploy those assets and take advantage of that. The problem you get with when you get bigger and bigger is that your ability to take advantage of that, you're from a regulatory or compliance point of view, you're drawn more and more back towards the index.

41:09 And if you're wanting to be an active manager, but you're drawn more towards the index, you know, over the last ten years with the, you know, with the index providers, Kevin, who are running money for $4.05, six basis points, you know, they cut your lunch. So we very much focus on the areas that we can add value. We stand on our ability to be able to add value to client portfolios going forward. So acquisitions just to bolster size, you know, don't really work or certainly don't, you know, enable you to grow your business going forward. Acquisitions for skill sets are different.

41:58 And, you know, I think, you know, we will continue to look at that. You know, we we are fortunate that, you know, we see pretty much every deal that comes across in Brazil where people will approach us to say, would you be interested? But that doesn't necessarily mean, you know, we should do anything about that. It's only in the areas where we, you know, see that. I think otherwise, you end up, you know, it's like two drugs at the bar propping themselves up. You know, it it doesn't work. And there are plenty of examples, you know, over the last three or four years of that. Just on the institutional market, you talked about, obviously, with the Majeddi acquisition.

42:46 As a geographic split, is that different for the institutional market? I mean, is it more global? It is in a way, and Meredi have a global presence, but definitely we're more known for their you know, sort of UK equity. I mean, recently, they won one of the yield and largest investment trust in Edinburgh Investment Trust, you know, and since they took that on board just over two years ago, and it it produced, you know, very strong returns there. But also, if I get back to the good sustainability or in its broader sense, sort of responsible capitalism theme, I think, you know, to be able to demonstrate that in the institutional marketplace is definitely a position of strength.

43:35 If I talk to the consultants or I talk to institutions, local authorities, you know, we've just been one of the managers appointed to one of the local authority sustainable mandates. And they've been awarded out at PS, which but the note, the fund itself is about 1,000,000,000. We're one of the managers there. But the feedback is very much we're looking for sustainable solutions. You know, around the world, we've got sovereigns, governments dictating that they would like more money invested in that way. And one of the barriers is, you know, people are looking at and saying, well, there's a lack of, you know, appropriate or accessible product or managers doing that. And it's not about paying lip service. It's about being able to to demonstrate, you know, what you're doing and to prove that. So I think going forward, that's a, you know, a great area of sort of potential competitive advantage for us. Does it diversify client base internationally as well?

44:54 The institution, could that potentially grow Yeah. The opportunity set us to grow. I was at Paris yesterday talking to a European institution about what do they want, what do they need. This is a group that we have a distribution agreement in place with. And, you know, sustainability is top of that that list, understanding process, you know, that regulatory side. Not surprisingly, they are very much focused on how do you evidence what you're doing on the sustainable side, the regulatory risk for them, you know, and for institutions of pensions in that space is large. So it broadens out.

45:46 But again, back to the point I made, plug times, it's about it's not the shortage of opportunities. It's focusing on the opportunities you can get the best outcomes out of. Sometimes walking away from something because you haven't got the bandwidth or the time to invest in it, until you do, it's a better outcome for the rest of the business. And Vinay, I just wonder, somebody's asked about the, obviously, the the fall in the shares. Would would we consider buying our own shares? Yeah. No. I mean, the board does regularly consider, you know you know, where the share price and share back and and possibly buying back shares. You know, we we take out authority every year that allows us to buy, you know, up to 10% of our shares back.

46:38 So we've we've got that ability to do so. We've got the permission to do so. But we we have been we have been conscious. Now even as a, you know, we are a mid cap now. We're a smaller end of the mid cap size. You know, we're we're we're we're we're you know, sucking liquidity out of the markets. So so yeah. So although always being considered, you know, we we felt actually, you know, you know, know, the increase in the dividend is is a is a great way to return cash to to shareholders. But it is something the board does keep on under regular review. We do look at it, but it's you know, we want to get more investors. To get more investors, you need liquidity. If you look at us relative to other financial stocks of the same size, there's probably more volume or trading and ability in that. If we take liquidity out, one of the questions you could ask is how easy is it for me to buy x, but also how easy is it for me to sell x if I held x?

47:38 So you will and this, you know, as investors, liquidity plays an important part in your decision. So for us to take liquidity at the market with the size we are, I don't think it's appropriate. And also, surely, rather than just buying and selling shares through treasury, I should be spending my time trying to work out how we grow the business going forward. There's a question about REM going up since the end of the financial Do you want to explain that very quickly? Yeah. No. Yeah. No. So our March 31 number was 33,500,000,000, and and we announced on the on the seventeenth with our results, June 17, a year was 34.2.

48:24 But what we did, we the the the work and the market has come down significantly since there. It's not inflow related. It's just that we completed the Meredi acquisition on the April 1. So Meredi took our AUM actually to 38,700,000,000. So what you've seen over that two and a half month period is the AUM not increased from 33.5 to 34.2, but decreased from 38.7 to 34.2, which is mostly driven by by the markets. And final question, we've been asked if we would ever cap the size of our funds for performance reasons. The question I get asked quite a lot, if you we are we could tell you to monitor funds and certainly the smaller ones. So really, we're only talking about, you know, funds where you've got a very good strong track record in, like, small cap. But, obviously, there's a limited liquidity to ability. I explained earlier that and you've got very large funds.

49:32 You know, how do you deviate away from the index? How do you add value? How do you add alpha? So we do that. And, of course, the other side of that is that do, you know, soft close, do you hard close funds prevent, you know, investors getting in active? If you soft close a fund, all you're doing is preventing anybody who hasn't bought it buying in the future. So that doesn't really change any because your existing investors could continue to buy it. If you hard close it and you have a client for whatever reason decides they want to move money away, you know, to or reallocate to another area, you you're then or you're then left to go back to clients. So you know the fund that you wanted to buy that I couldn't I wouldn't let you buy before, but now you can, is not really a good sort of sales or customer service message.

50:29 So what we look at is a size of those funds, and we like to think, you know, the position we've got with the strength of the brand and the distribution is we know our clients very well. So if we think a fund is at that point, we would, you know, explain to clients that we don't think that's there. There's the other advantage of that. If we've done that from a regulatory point of view, it'd be very difficult for the, you know, the individual or the company to buy it. But I don't think it's a kind of black and white thing where it is. Ultimately, at the end of the day, if we thought it was going to be detrimental and we could not control it, yes, we would look at a vehicle like that. But we'd like to make you know, we spend a lot of time building relationships with clients.

51:22 We'd like to think that because of the way we sell on process and communication, we have contact with our clients. And it is not just because, you know, the funds are great performers and people buy them and, you know, we have no control of it. Okay. Thank you very much. John, Vinay, Simon, thank you very much for updating investors today. Can I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few minutes to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team of LIONTRUST ASSET MANAGEMENT PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all. Thank you very much. Thanks a lot. Thanks, everyone. Bye.