Record (LSE:REC) — Full Year Results

0:00 Good morning, and welcome to the RECORD PLC Full Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now

0:32 like to hand you over to the management team of RECORD PLC, doctor Yan, CEO, and Richard, CFO. Good morning to you. Good morning. Good morning, everyone. So, yeah, very excited to be here today, and so we'll we'll go straight into the the presentation. And so I'll start with a couple of words about RECORD as a as a business. And then, yeah, as we can see the the questions as as they're being submitted. So so we're trying to take as many questions as we can as we as we go along. But otherwise, once we talk to the slides, we will and sort of go go through the many questions afterwards. So here on if we if we start with slide five, that that that gives a nice a nice overview of RECORD as a business.

1:23 I'm not gonna go through through all of the numbers, but importantly, we've we've been around for forty years. RECORD was founded in in 1983 originally as an FX specialist, and and from that basis has grown into fully fledged derivatives managers. So so still a lot of what we do is is overlay structures, derivatives options, and then other risk mitigation techniques for for large institutional investors. And yeah. So so assets assets under management as of this year are just over a 100,000,000,000 AUM from investors in Switzerland. It's a big big location for us, but also Europe in general and The US. So those are the the three jurisdictions we we focus on, but we do have clients in in in in most most other sort of global global hotspots as well, such as Australia and Asia.

2:21 The how how do we define ourselves? So in a sentence, we say we we are a specialist asset manager because what we do, what we offer, the the products we we focus on tend to be very specific. So we say we're a specialist asset manager focusing on on best in class products for for large institutional investors. And and I think sort of every every word in in that sentence has has has quite a lot of weight for for how we how we do business and how we how we think we we we will continue to grow in the sense that we we are large now with with our AM, but, of of course, we were still sort of a lot smaller than than other much, much bigger houses. So so what sets us apart is the the ability to to offer customized solutions at very large scale, and that's what we do. So so we we can we can deliver mandates that are in the billions. We can typically launch these quite quickly.

3:18 When we whenever we say we can, we we're able to to follow through and and and do that in a matter of weeks, which is which is valuable to to our clients. And because at the same time with about a 100 employees, we are still quite quite nimble and flexible compared to larger houses. So so that's where our competitive advantage sits compared to the smaller smaller smaller competitors and larger competitors. It's that it's that space where we can customize yet deliver at scale. So we're a bit more bit more flexible than than than the really big houses, and and and that's an advantage which which we're trying to play as as often as we can. Teams are located in Zurich, Amsterdam, London, and and The US. So so that's where then, again, in line with and Frankfurt, sorry, and and in line with so where our clients are located.

4:12 We well well, the hub really for us is is based in London where we're trying to have teams on the ground to look after clients wherever possible. And, again, that's very much in line with our clients being large investors, which means that it we have you know, they're demanding clients. So so we we we spend a lot of time servicing these clients. We have grown particularly in the last couple of years. So AUM 2019 was around 70,000,000,000. We're now proud to to, as earlier mentioned, have reached a 100,000,000,000. So so the business business model has been has been working for us. And so in that sense, we're we're excited to now, you know, proceed very much in the same in the same way as we as we move forward. And we're regulated, just as a last sentence to to to the slide, we're regulated on the FCA in in The UK, and that very much allows us to to then do business in The US, Switzerland, Australia.

5:14 But we're separately regulated under BAFFEN in Germany, which for us covers the EU. So so that's quite important as a setup for us and and that that really covers all of Europe. Also, Brexit, we have the licenses to to to be active here. But, yeah, we we we can branch out successfully from from here into into into the world.

5:37 So if we if we if we take slide slide six, let's briefly do slide six. Yeah. So so who are our clients? As as I've mentioned earlier, who are the large investors generally in the world? It's it's predominantly pension funds. So our client base comprises to a large extent of of of pension funds followed by foundations and other other asset managers. So so so that that probably describes almost the entirety of our client base. What that means, again, so in in in the light of what I described earlier in in terms of what do we do well, when are we competitive, when are we able to win mandates is is when we're able to address the the requirements of a client almost a 100.

6:34 So so so, really, you know, if if if there's any desire for something that's slightly streamlined, if if if, you know, the the requirement is in its entirety to to, you know, to do it fast at a certain price point, you know, there tends to be there tends to be other other companies who compete well. But when it's about having somewhat specific complex requirements and and addressing them exactly, that's that's where we excel. And once we've done that, then that translates with with high emphasis on service on our side into very long term client relationships. So what we see on this slide is the the the average time clients have been with us for, but in a sentence, about half our AUM is from clients who have been with us for for more than ten years. So so for us, these are these are, you know, very, yeah, valuable and and enjoyable client relationships where where once we've worked with with an institution, we tend to work with them for a long time.

7:38 That's that's the parts. And yeah. So this slide shows shows the the products, way the way we define them now. And, again, this is something where we've done a lot of work in in defining the product range exactly the way we see it here, in part, also in in response to to to the growth we've seen. So if we were to go back, say, ten, twelve years in the history of the business, then products would have been probably less clearly defined and, you know, bigger teams would have simply addressed all investor needs. But with with, I think, you know, clients who are continuously demanding also what they expect from from service providers and and also the the the growth we've seen, we we now have structured the business very much along these six product categories, almost seven products because custom solutions really falls into two. But that's really the way the the business is now positioned. That's the way we we look after clients. That's the way the investment teams are structured, and that's also the way we we structure we the sales teams. And again, there there's in in in the position of the business, it is important to have salespeople who are highly specialists in in these products. And that means typically, you know, salespeople do not cover a lot of these products, but at most one or

9:09 two because we we prioritize depth and and specific knowledge in in these products over over covering the the whole range in in how we and how we present to to clients. So just briefly, it's walking walking through these products. On the left hand side, we we have the the label risk management on the first three products, which is, as I as I said earlier, that that's really sort of rooted in the the FX history of the business, but this is taking care or managing the the currency risks that international investors exhibit based on their international investment activities. So what happens is when a pension fund, for example, a UK a UK pension fund has obligations through their pensioners in The UK. So so they they have to pay pensions to to UK pensioners in in sterling, but they they will typically want to invest globally.

10:12 So so what happens is that, you know, between between the international investments and typically there'll be a large US position because The US is is seen as as attractive certainly in part to to to the portfolio. That means there's now a risk from US dollar to sterling, and and the pension fund needs to decide how to manage this risk. And they can either remove this risk in its entirety, which which is of a passive hedge, which is the first box we we see here, or they they can decide to to remove that risk, but at the same time pursue a value add from that strategy, which is the the the third box we have here, which is active FX hedging. And that's the two products which which for us go back to to really the early days of the business.

11:03 So so these are service oriented products. They're very operationally focused. So if we take a passive hedging mandate as an as an example, if if if the billion of of FX risk has to be managed in in these programs, then that as as a part of the portfolio turns over multiple times over the years. So it's it's not quite the same thing as as simply holding an equities position in a business, which once you've once you've invested is on your book. But these are these are mandates where, you know, the the contracts roll over and cash flows and and and, also importantly, then rebalancing has to be taken care of by us in delivering this as a service to the client. So in a in a in a passive hedging product, for us, that really means that we deliver an operational service. And in a lot of cases, the value here really is from a client point of view that we do have all of the checks, balances, and and and and operational sophistication in place to do this safely.

12:10 So so these are these are oftentimes things where from from the point of view of a team that outsources this to us, the the risk for them to do that in house is simply too large because there's very, very little tolerance for errors simply because of the size of these mandates. So to put that into context, we trade on the on the 100,000,000,000 of of 102,000,000,000 of assets under management. Our annual trading volume is is in excess of 700,000,000,000. So that's $3,750,000,000 and 750,000,000,000. Sorry. 750,000,000,000. So it's in excess of 700,000,000,000. And on a normal day, we trade 2 to 3,000,000,000 in in volume. And on peak days, we we trade 10 to 10 to 12,000,000,000. So this is a highly trading and operation involved service that we offer. And, again, there's there's not a lot of people who can do it quite as well and quite as safely as us, which which is a is a is a is a nice competitive advantage to have. And as the label says, risk management is a nice part of the business in in that it is relatively independent of market movements for us as a as a line of business, but it is really an operational service.

13:31 So with with the client jurisdictions that we that we have, that that's a very safe part of the business for us for as long as we do an excellent job. We're not we're not overly reliant on external factors, which is, of course, different strategies where there's a desire to add a return, but there's more of a reliance on, you know, how does the world now change, and am I correctly positioned? Hedging for asset managers, the second box is is really a service that has evolved from this service for for for large institutional investors, the way I've just described it, in in that the the private market industry has has has grown hugely over over the last over the last twenty years, but especially over the last five five to ten years. And that means there's now an ever larger number of private market funds that receive investment that are still growing and that are being launched. And, again, it's part of the the the bigger movement from there's a trend from from public equities to private markets, but there's also big big movements still in bank disintermediation that support these trends. But for us, it simply means that the more the more funds are being being set up, the more funds are are there which which grow, the bigger the need for for service providers like us to to support these funds, really, in specializing on what

15:02 it is that they do well. So if we take, say, private debt or private equity managers as an example, that's their business, yeah, or real estate. Their business is real estate. Their business is private equity. Their business is private debt. So when they launch these funds, typically, there is there is, you know, an opportunity for us to to to take the FX services on these funds off their hands and take care for for them off of that so so they can focus on what what is the core of their business. And, yeah, so so so that that's something which which initially sort of grew organically for us almost almost without us really noticing because we we started to to to offer that service really simply based on what we'd always done for

15:47 for for pension funds and foundations, but which we've now positioned as a as a stand alone product with a stand alone team to really look after look after these funds as they as they as they evolve. And, again, yeah, so puts puts us into a very strong position because it's quite complicated as a service to to do this because the private market world has has typically not a lot of cash line. So so to offer a risk management service the way we offer it in in an environment where there's limited cash or where there's opportunity costs to this cash that's held in the fund. Because real estate funds wants to hold as little cash as possible to be maximum invested in real estate means that there's nice opportunities for us to do to do the the risk management in an in an excellent way and and be appreciated in that in that capacity.

16:42 Active FX hedging very much for us service that we see demand for in The US. So so US investors typically look for for slightly more active services in in in in the way they they manage, certainly, currency risk. That's in part a function of of the US dollar being a more dominant currency. So from the point of view of a US investor, they do have foreign exchange concerns, but they're typically smaller from the point of view of a European investor because they are already majorly invested in US dollars. So so they can they can take a slightly more active role in in what is a smaller concern in the totality of their portfolio. But again, for us, as a London based business, it's a great market because language wise and culturally, it's a great fit. And and, again, we've we've seen that part of the business grow, so we've we've hired in The US, and we're supporting those efforts.

17:48 FX alpha moves us over to the return seeking strategies. Is is is is really the question, how do I trade currencies globally if my sole objective is return generation throughout very much any environment I might face in the future. For us, that's expressed in in our multi strategy product, which is a product that that combines several systematic return streams, most of which have been been live since 2009 or 2012, so we have a long track record. And to date, strong performance.

18:34 It tends to be smaller mandates because the size of the mandate is not informed by the size of an investor's international asset allocation, but but it's typically informed by how much risk do they want to take compared to what we compete with here, which might be hedge funds or other other other CTA strategies. Yeah. So these are typically typically smaller smaller mandates, but, again, so it's it's it's something that we see a lot of interest in. Again, in part, I mean, lot of the the bigger the conversations we're having here is is really clients also reacting to geopolitical tensions and political uncertainty around the world and and a bit of a movement around so there's there's sort a sensation of, you know, of certainly globalization has come to a bit of a stop, if not reversal.

19:30 So so so people's views, investors' views around these these these themes tend to diverge a little bit more. So we we tend to get more inquiries where where there's a question, you know, can you can you implement a view exactly the way I sort of perceive these risks or, you know, exactly the way I I assess these opportunities. Just at that point before I move on to to the asset management range of of products, almost everything we do is is I'm not I'm not going to say entirely systematic, but there's a strong systematic core to everything we do from active hedging to FX alpha, but also to to sort of, you know, the the passive the hedging processes is, you know, there's a lot of optimization, but also systematic cause to to to these strategies. Yeah. So so we are not we're not very much a discretionary portfolio manager, but but a systematic and process driven portfolio manager, again, with with with the intention very much of, you know, giving giving clients a stable experience throughout a number of years and then avoid any sudden changes to the service or investment experience they they receive from us.

20:45 Right hand side in blue at at the top of asset management products is is is sort of a more more recent additions to to to the product range. And in in most cases, it's related really to to things that we've done for clients or that we've you know, services that we have been delivering for for for investors, where then over time they grew in a in a way that that that enabled us to, you know, turn them into stand alone products And and where where we feel now, you know, this is important for us. This is big enough for us to to to have a to have a team focusing on that. And this first example being the the EM Sustainable Finance Fund, which here is it says EM debt, but EM local debt fund, which we launched in 2021 in in collaboration with UBS Wealth.

21:45 And here, the the the goal is to through the deliberate use of FX contracts or very much by by derisking the investments of multilevel development banks into emerging and frontier countries to to not only create a portfolio that's attractive from from an investor's perspective within that asset class. So as a product, this runs against the usual benchmarks in in EM local debt. So it run against the GBI EM as a as a as a local currency benchmark and has done very well. So so I think it's up 20% since since inception. But what what the team does and then we now have a standalone team really dedicated to to this product. So they work closely with the the multilateral development banks and development finance institutions in assessing, you know, when are investments into emerging frontier currency countries made and what's the need to to to really, you know, take the currency risk as part of these transactions and and and house that in a diversified portfolio such that the recipient of these loans can can receive a loan in in local currency. So so this is all about ensuring that someone who borrows in in in Georgia can do so, in Georgian lariat, doesn't have to do this in in US dollars. And the the multilateral banks are

23:15 limited in their ability to to take FX risk. Limited, so they you know, this is an overstatement. They're not able to take any FX risk. So so there's a need for for the market or funds such as ours to absorb that FX risk so these loans can be made in in local currency. And then just so very briefly, infrastructure equity, as we've we've mentioned before, is is is a fund where we're looking to launch this year and which we're which we're very excited about, and and private credit is a is a second fund again which we're looking to launch this this year. And that will then complete the the whole gold product range. So so that's the way we we view the the product range for the foreseeable future, and and efforts are are very much so making sure that the the business is is optimally structured behind these products. Yeah? But but it's these products that that we believe form a good basis for for the business going forward and also for growth going forward. If we very briefly look at the next slide.

24:16 And just in in in terms of giving giving a bit of bit of bit of a background in terms of the the market opportunity here on this slide that we see on the on the left hand side, that assets under management in the in the pension fund industry continue to to grow. So the there's there's this is in part due to an aging population, but there's also a lot of consolidation in the in the industry. But AUMs across across our our our client base are reaching ever higher levels. And and just in terms of the the the service we we offer, that means there there continues to be opportunities for us to to do what we do well, which is best in class bespoke solutions for for large for large institutional investors. Yeah. So so there's there's a big opportunity set here for us to to have these conversations.

25:16 We're also slightly helped, as I said earlier, by by the the increased global not going to say tensions, but certainly anticipation of changes globally. That certainly is something that helps us, that has an effect on the currency market the the way way it's viewed, but also the way the way the world is viewed. And and so if anything where really opinions diverge, that means means, you know, we we have opportunities to to assist with this implementation of of what clients are looking for. Right hand side shows just the last couple of years of of growth in in private markets, and and that is projected to to to continue. And then for us, that means that then, you know, the the second the second box on the product slide as described earlier, sort of hedging as a service to other asset managers continues to to to to be something where where really the the client base is is ongoingly increasing, but separately then the the the the other funds which we're launching or have launched, which includes the EM EM Global Debt Fund, the infrastructure equity fund, and the private credit fund are very much products that are also participating in this set of opportunities.

26:39 So so broadly, just just with these two charts in in mind, we're we're quite happy to have to have to have a bit of tailwind here on both sides of the business, on the risk management and on the on the forward term side. Just finishing on products. There's a couple of questions. There's a few questions we should get to, but I'm scanning through them. There's a couple on crypto. So I guess in recent years, the crypto we had some some crypto products that we're looking at and also some of the funds that we're looking to that. So, I mean, if we if we if we go back to the product slide, then so, yes, so crypto is not not on there, and and so we've we've discontinued our crypto crypto efforts. Two things coming together, really, to to to as as a basis for that decision.

27:30 One is certainly that maybe a couple of years ago, there was know, a notion that that crypto was related to currency, and and on that basis, we we thought it was important to to watch that space. But the bigger and then I think that's changed. I think I think crypto is is not really a thing of its own. But I think so more more importantly, the the if we if we look at the the product ranges as presented here with where we are competing, really, as I said in the beginning, our competitive advantage really centers on large matters. Yeah. So so anything anything we we do, it is, you know, any any any efforts should focus on on large opportunities.

28:15 And when we when we structure large investments, then then also typically these are these are relatively large opportunities for us in in terms of revenue. And so that that puts the hurdle for us relatively high for when we allow ourselves to do something new because anything that we add to the product range comes at the risk of distracting. It it creates there's a complexity premium that we pay in in in the group structure in in in doing these things. And so just in in in light of those risks or disadvantages to when we when we do new things, we're we're being very disciplined when we say there's an opportunity big enough for us to to really feature on on this on this as as part of this this set of products. And and our our decision was was that crypto just didn't meet just didn't meet that bar as as in size of the opportunity for us. And and, I mean, so so we we exited those we ended those efforts, but there was no cost no cost to business in in doing so.

29:25 Anything else you wanna cover before we come to some of the some of the questions? No. I think I think I think that that sort of concludes everything I want to say. We're happy to go into the questions. Perfect. Jan, Richard, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the top right corner of your screen. Yes. So first question here is, you know, US expansion and best strategy to avoid clients switching to to passive mandates. I think I part touched on it earlier, but the I mean, the The US really for us is is is an opportunity, and it's important to contrast that with with Europe in in that, I mean, Europe hasn't benefited from from Brexit, neither The UK nor the EU have benefited because that separated London as still the financial center from from the rest of Europe.

30:28 But also in in the EU, selling into the EU is is made additionally difficult by by the separate jurisdictions around countries even within that as a regulatory jurisdiction. So so there's a need for, for example, funds, where new funds are sold into the EU to be passported in in the different countries separately before they can be sold, whereas The US is very much one set of opportunities, one language, one culture. So in that sense, we're very confident with regards to the expansion, a, in The US. And and secondly, important to remember, we we do have relatively large assets now in The US, and we are no quantity to a lot of the community there. So this is not something which we're starting. This is something which we're intensifying.

31:19 And then just on the point of do do we think there's a particular risk of clients switching to to passive mandates? Probably rather the contrary. I think, you know, again, we we rely on how we see the world develop. There there's there's probably a tendency which we observe towards slightly more active implementations, if anything at the moment. I mean, the context of that question is is is, of course, that we our revenues this year and and will be in the coming year because of one particular client switching their mandate. But think it's right to say that these are long term client relationships and and changes in Yeah. I mean the approach of of investment management, so I can change over the life of those contracts. Yeah. I mean, you can always, I mean, client clients can always, of course, change what they do, and and, you know, we will always support whatever the client wants to do. But we've we've we've not we've not had any other instances of that happening. And in this case, this is this is after a two decade relationship with that client, and and so really, it's a change of change of team on their board, a different philosophy in terms of how to do things. So I don't think there's any data in terms of what might happen in other jurisdictions

32:32 and with other clients. Yes. I mean, so what measures are in place to ensure a smooth transition and continuity in leadership, especially given the long tenures of previous key executives? So we we are we are proud to to to now be in a position to to have managed succession, not not only CEO and CFO Sebastian, as as of you presented to you here today, but also across all other teams. So so we now today have have a team in place across the product range, yeah, where where almost everyone has has another ten or fifteen years ahead of them in in terms of what's typical career horizons.

33:32 Yeah. So so so we're in a position where, you know, we we can we can commit to to multi decade relationships with clients in in a way that's that's honest and and and and believable. And we we we think that's very that's very different from from where the business was just a few years ago where, really, you know, we we did we did have questions from clients. You know, what happens when ultimately when ultimately, you know, Neil steps out? What happens when ultimately Leslie will retire? So so now we're we're in a position where we we have completed that. I I come come into this job having having previously been global head of sales, so again, there's a close relationship with clients and from me also through the board at RECML, the Record Clients Management.

34:34 And there there's now a lot of confidence on our side that not only do we have do we have continuity for for a long period of time into the future, it also changes how the business now looks forward. So so it it gives gives the business at all levels a much longer much longer horizon in looking forward, how we plan, how we think, and and and and in our ambitions. How do we manage that? I mean, a big big part of that is share ownership. So one of the advantages of being listed is is is that we can ensure that that all key individuals have have shareholdings and business and then, you know, so participate in in that journey very much the same way our our investors do. I'll just add that. I mean, that whole transition process the succession process has been very actively managed and and sort of quite publicly in terms of with externally with with with with shareholders and investors, but also with clients and and so on.

35:33 And and I mean, obviously, I've come in new. You've been here been here a long time. Neil Neil and Leslie, you know, remain big shareholders of the business and be very supportive of the transition as well. So it's been very actively Yeah. Actively managed. It's awfully done. Yeah. I I think it's one of the one of the benefits of being a a listed company is is is that these things are sort of very deliberately planned and then also executed, and it avoids some of the challenges that we see in private companies. I mean, there's lot of smaller companies with very much a CIOCEO model where where succession is something that just never happens. That's where we're we're proud to to, yeah, to be to be in a different position.

36:25 Hello. As part of the risk management products, what is the risk taken by the the company? Well, we we manage I mean, I described that earlier. We we manage sophisticated operational processes. Yeah. So, ultimately, we what we do is we we we take operational risk in in the services we we deliver, and and, you it's our business to ensure that our operations are strong cutting edge to minimize any leftover risks. We also ensure that the way we set up any mandates with clients minimizes these risks. So again, this just relates to the core of the business being systematic.

37:12 So most of what we do is process driven from the point of data collection at the side of the client where in most cases we have access to custody accounts or even underlying portfolios with our asset managers on the side of the client, so we access that data. And then from there, that data gets processed on our side, gets translated into the necessary trading instructions, and then so implementation follows. But it's it's really that that process where, you know, we we we need to manage that process in an excellent fashion, and we we we do manage that process in an excellent fashion. But, yeah, that's that's, like, the core of what we do.

38:04 There's a few questions, a question about IT. And I've done IT development. There's a few questions around bringing IT in house, some of the things that have happened now. Yeah. So what I mean is a what what was there a couple of couple of the things. I mean, it also touches on on on office location, and and I think, you know, working from home versus working in the office. But so so if we if we go back all the way to to Corona, really, in fact, that for a period of time, everyone was working from home. For us, that really meant that that's probably the reason that today we do have a London office, and then we're now we're we're we're now sort of expanding the London office, and then we'll gradually wind down the Windsor the Windsor office and then make London our our head office very much with the attention now over this year and next, bringing everyone back into the office. And that wouldn't have been possible had we had we not had the the experience that the business can also function when everyone works from home. So so for a period of time, that that works quite well. In terms of moving moving relatively fast as a business and also developing new new systems and and and technology, there is a big noticeable difference between people being in an office and collaborating and people working working remotely.

39:16 And, again, there's more to this. I mean, the the more conservative amongst us, they would say, and that means everyone should be in the office for five days, whereas other people say it's three. And again, I don't think there's necessarily right or wrong between these two opinions, but fact of the matter still is that when people do spend a lot of time together in an office, three days or five days, we we did make the decision on on that basis to bring to bring IT in house again after a number of years of of of working in a in a hybrid setup where we had a relatively small in house team and large external team of developers. And ultimately, we didn't think that that was the most efficient way of doing it. So we ended our relationship with the external team and we're very excited now with the internal team we have. And, again, there was an opportunity for us to bring both a a head of technology and a head of development into the business in a form where they had worked together in exactly that composition for for ten years previously at at another business, and we decided that that was close close to the best setup that we

40:49 might have. There's a question also around the impact on operating costs of bringing IT on in house. I mean, we've you know, this looking at this current year, we expect our costs to be flat. That includes funding that that IT development team in house. And although we cap we obviously, as you have seen from our results during the year, we we some of the previous IT capitalization, which we which we wrote off, which was really, again, one of the things that Yan did pretty soon after coming on board was looking at that. And and as he's sort of just articulated, that wasn't an approach that was really working well. So I think it will be I think it will be ultimately positive on operational costs. And I think my my my observation is, as you described, the bespoke operational and IT platform that we operate, having our IT teams there and and my other observation on on day two as CFO, but I've been here for a couple of weeks, is is just how client delivery focused everything that everyone does is and that the IT team is completely aligned to that, which I think is approach this approach now is is is much better. So Yeah. I think in other in other businesses, you know, if if if there's a lot of asset management business where the core of the operations is more generic. Yeah. So so where it was, you know, the the if if if a lot of asset management business will really differentiate themselves through portfolio managers they have and have very similar middle and back office operations. For us, as Richard says, almost everything we do is highly

42:20 geared at doing exactly what our clients expect us to do. And in in that sense, it's important for people to to work closely together for that knowledge to be to be to be shared efficiently. So here, how is the the strategic review progressing, and and and what are the initial findings? And and when do you expect to publish the the full outcome plus implementation period? So we'll do that on an ongoing basis now since we get quite actively on that. I mean, first step very much is the chart here we're looking at and a couple of decisions coming from that is is then the the earlier described decisions on on on crypto. And there's also a couple of other smaller things which we stopped doing, which which are not on this chart, which really is we we we felt were at the risk of distraction.

43:17 So so so what we're looking at here is is is really the these are these are all products which have been very successful for us and and and on that basis, you know, should receive a lot of attention or sort of in in select cases where we we think they they will be very successful for us. But the the first step of the strategic review was was very much deciding on what this list should be, and we've now started to set the teams up in line with this product range. So there's now very clear responsibilities and then also accountability for the teams, which includes investment team members, sales team members, operational team members for each product. And there's this nuances between the products in terms of what's important.

44:05 And so we'll we'll we'll much more deliberately manage the business by by product going forward, and that also allow us to then, in essence, the way we communicate to to share what's what's working well, what's what's what's what's being revisited in in the individual product. But so in in the last and last, say, year, we've been lucky that that all of the all of the products have been been performing very well, which is also the the reason for the the strong performances that we've received. So, you know, in in on that on that basis, we we are in a strong position with, you know, strong product performance and and assets at an all time high. But as we grow as a business, you know, that discipline of of of really doing all the things that that allow us maximum effect is is important.

44:58 There are a couple more. I'm take this one around. I have to think about movements in AUM. The read the Yes. That's one more question. Yeah. I mean, so we are always I mean, under management for us is always affected a little bit by market movements, for example, in equities. So so if if if we were to see, you know, sort of a large large, say, drawdowns in equities, and typically, has an effect on the amount that a client will want to hedge. So there's a bit of a risk there. If we were to only look at AUM, there's a bit of a risk there that, you know, AUM can always sort of reduce a little bit of equity markets reduce, and that's just the nature of the business we're in. The increases in in in AUM we've we've seen were in large parts due to inflows. There was a contribution from from AUM movements, but but it was also the the large part of that was was new mandates.

46:11 This time around also, in in terms of the the inflows of last year, it was it was quite diversified inflows across the product range. So so so that was inflows from several products, whereas, I mean, the the last noticeable, so we had a real sort of strong move up in in in AVM last time was 2020, 2021, and then back then it was less diversified. But so so in that sense, you know, there there's always I mean, so if if if markets if markets move, then then sort of AUM could could come down a bit, but it's it's not something which I would say worries us particularly. Again, because that effect would would materialize, really, on the risk management side of the business. And as I said earlier, that side of the business, we we manage in a in a very stable way throughout market market environments.

46:58 Yeah. So so I wouldn't see that as as a risk to the businesses. But I think even with that movement in AUM in any sort of short period of time, those bigger term trends that you talked about in terms of the both in the pension asset side and the private private market side, those we've seen very strongly, and those those those continue. And so over over over a medium term time period or slightly longer time period. Yeah. Well well, medium medium medium term period, you know, the the mandates we receive from clients are increasing, so people's pension funds are increasing in size. One question, I think, at the bottom here. Would we ever would we ever see RECORD developing a retail product?

48:06 I don't think so. I mean, what what might happen is I mean, so and and, again, so I I think very, very much in line with with what I said earlier. You know? We've we've we've really here set up a a range of products where and, it's it's important important to keep in mind, we're we're not that many people in the business. We're about a 100 people, but we we we heavily rely on on on really the quality of our people and and to to deliver the quality of service that we deliver. So so it's important that our business model in in in terms of how we plan to grow is scalable in a in a ratio between new new mandates and and an expansion of the skill set internally that is that is manageable. And and if we were to go down the the retail route, then then the balance would be right.

49:00 Yeah. And, I mean, sort of in in the discontinuation of the the the digital efforts, those were institutional efforts, and we still sort of decided they were too small, really, in light of the big opportunities we see on the institutional side. So I think our our advantage really is is that we we we can do things very well, and we can do them very well at scale. And and and so that's that's that's what we focus on. So don't see a a retail product on the horizon. What might happen in a number of years, you know, we might there might be situations where we would make, say, our execution engine available to, you know, for example, an existing retail business. But, that would then face us very much as an institutional investor.

49:53 Can we add salespeople to to increase AUM? How do you ensure you get in at the creation of new funds to be the resource for us? Good question. It's a good question. So can we can we add salespeople to increase AUM? Yes or no? Yeah. So, I mean, of course, always we can add salespeople and and and, you know, hope to to to increase AUM. For us, it's also important how what do we ask these salespeople to do for us. And and I think a big a big evolution for us as a business is, as I said earlier, the fact that we now hire salespeople into products. So so we we've moved away from from from a sales team that would cover everything because we don't think that that gives the clients the the optimum the optimum experience. And it's hard to equip salespeople then with the with the required knowledge. So that means that by product, we we can also then hire people with slightly different backgrounds.

50:48 And in in in in that sense, there's, again, there's slight differences in in how then a sales process works depending on whether whether the prospect is an institutional investor, is another asset manager. But in in almost all cases, it's it's quite important to be in ongoing conversation with prospects over short or longer periods of time, and really, that's the only way of ensuring that, you know, at the inception of new funds, we we are a known provider. And, typically, typically, that that that has worked quite well in the jurisdictions where we've followed that approach. But again, it means that we we want to choose our jurisdictions carefully.

51:34 So so so that that is worth of course in The UK. It's worth of course in Switzerland, and and so we're we're to focus on the on The US in that sense. But we we would risk if we were going to lighten our sales efforts, then we would exactly sort of experience a risk that's what the question here biases is. And there's a risk that, you know, you're sort of half known, but you're not sufficiently known known to the prospect to actually reach out to you when they need that particular service because they're now launching a new fund or product. Think there's only one or two other is this is this question just coming in? How do you see the product mix of lower margin and higher margin evolving over the medium term? So if we if we, again, look at this chart, we we do we do have differences here in in margins between, say, left hand side and and and right hand side. It's important to to to keep in mind that we we don't design this product range purely to maximize margin. So so, you know, with with with the you know, we we want we want to grow we want to grow in assets. We want to grow in our client base, and we want to be around for a long time. So so we want a a product mix that that gives us longevity.

52:49 So so margin is one parameter, but there's also the question, what makes for product mix for the company that that that is stable throughout all environments that we might exhibit? And then, again, importantly, that that that gives us client longevity very similar to what we've had and which we discussed on the on the similar on on on the on the earlier slide. So so, yes, there is a movement towards towards towards towards the the higher margin products simply because the new products are on that side of the spectrum. Yeah? But at the same time, we we're very, very, you know, focused on on growing the whole product range to to maintain the mix that we're envisaging.

53:37 I think that's it for question. Oh, there you go. There's one one more there. What's the typical visibility time frame on the gain or loss of a large mandate? So in in gaining or winning large mandates, you typically have some some kind of information six to twelve months before it goes live. But it's it's often hard to say until until sort of a couple of weeks before it launches if it's if it's actually launching or not. Yeah. So so we we we at any given point in time, we we manage a number of conversations that could potentially go live and and be very large for us.

54:29 And, you know, some of them some of them just stopped for a lot of reasons, and some of them then suddenly accelerate and then move in the right direction. In terms of the loss of a large mandate, I can touch wood that hasn't happened in a while for us, but typically also there is a conversation had probably six months or longer where the client and again, in these types of services we offer, if a client was to decide to discontinue working with us, we don't we hope they don't want to make that decision, but there would need to be some preparation in terms of now who is going to continue offering that service, and so so that conversation would typically start ahead of time.

55:26 That's everything. That's everything for questions. There are one or two questions that we may just get back to people on, but I think we've covered most of the questions. Perfect. That's great, Jan, Richard. Thank you for addressing those questions for investors today. And of course, the company can review all questions submitted today. I will publish those responses on the Investor Me company platform. But before we direct investors to provide you with their feedback, which I know is particularly important to the company, Jan, could I please ask you for a few closing comments? I think closing comments. I I think, you know, both both Richard and I are very, very excited to know where yeah. Yeah. Stay stay at this point, lead this company going forward, and we're very excited about the opportunities lying ahead. And it's a it's a privilege, I think, to to have this opportunity to to grow what what is a wonderful business and and also to do that starting at an all time high of assets. Yes.

56:22 So so I think we're we're starting at at a very strong point for a company, and we'll do everything we can to to deliver to deliver from here. So is that the first I guess, first one of these investor meet that you and I have done Absolutely. Yeah. Yeah. First of we've done together. And it's great to have the opportunity to speak to so many people as well. So thanks very much for everyone for joining the call, and and hope to speak to you all again in future. Perfect. Jan, Richard, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of management team of RECORD PLC, we'd like to thank you for attending today's presentation, and good morning to you all.

57:13 Thank you. Thank you.