RIT Capital Partners (LSE:RCP) — Investor Webinar

0:00 Good morning, everyone. Thank you for joining this webinar to hear about all things related to RIT. We are joined by Maggie Finari here. Say hi, Maggie. Hello. Good morning. Maggie is the CEO of JRoss Child Capital Management, which is the investment manager of RIT, who you are all shareholders of. Wanna keep this as interactive as possible. I have an iPad in front of me with all your questions, so please ask them, and I'll try and weave them in as we go. But I think just to kick off, Maggie, why don't we just start with what it is that RIT is trying to

0:32 achieve and how has that manifested itself over the years in terms of performance? Great. Thank you, Amal. I'll I'll probably use some of some of the slides we've prepared for for everyone today. But as I notes very clearly here, what we're really looking to do is deliver equity like returns for our shareholders with less risk than equity markets, and that's really because we run a very diversified portfolio that's really built to be resilient by design. And I can walk through a couple of examples in and around how we do that

1:04 and how we build, how we build up the portfolio. It's really based on our structure, a permanent capital vehicle, a fantastic team and a great network that really lets us access exciting opportunities for our investors that can't otherwise be accessed easily in the market.

1:25 Okay. So you recently announced your results for 2025. Now 2025 feels like quite a long time ago. However, I think it is worth spending some time on it because it was a very interesting year. You were very active. So could we just just start high level? How are the results? How did the year go? And then we can dive into kind of what you did across the year. Yeah. I can. And like you said, 2025, it was a bit of a time ago, so we've also included an update up till up till February as well for for 2026. But if we stay... If we take a

1:56 step back, we had close to a 17% total shareholder return. We captured nearly 80% of the equity market return relative to our benchmark, which is equity at 13 and a half percent.

2:10 We also proposed a dividend increase to our shareholders of 4.7%, and our ongoing charges figure is now at 73 basis points, which is slightly below the three and five year averages. And if we go to year to date, as of the end of February, we've been able to deliver a 3.6% return for our shareholders. And it's always important to also put that in the context of the last twelve months, and that number is closer to 16.66%. So very healthy returns for shareholders. And obviously, it was a very choppy year. You had Liberation Day. You had all sorts of volatility. And now we've got a war happening right now. Can you just... You you talked about your flexibility and your ability to be dynamic. Can you talk through the changes you made to the portfolio over the year that have set us up for where we are now? So, yes.

3:03 I I mean, last year was really a tale of two two very distinct narratives. So in the first half of the year, as you said, a bit similar to to this year, lots of volatility, lots of uncertainty. And that's really, as as we can see on the screen, were our uncorrelated strategies. So strategies that are able to produce steady, diversifying returns for our shareholders really through hedge fund strategies, delivered returns. So in the... In that first quarter of the year, that was quite choppy. We managed to outperform. And then by the end of the year, as I noted earlier, we captured 80% of the upside of equity markets at at a 13.5% return. But because we're diversified and because we invest across three primary asset classes, private markets, quoted equities and uncorrelated strategies on a global basis, we're able to do that with less risk.

3:58 As we were thinking about going into 2026, we made a number of changes in our portfolio, in the second half of of twenty twenty five. So what we look to do is bolster our uncorrelated strategies, so add a little bit more to this more defensive part of our portfolio exactly for the environment that we're facing today. And then what we also look to do within our quoted equities exposure is, although it looks like we've taken it down from 46 to 43%, What it does do is it it masks from that perspective the diversification globally that we added to the portfolio. More specifically, The US will always be a home market for us, but we actually reduced our overall exposure from 60% to 50% and actually a lot more so in equities.

4:51 We also concentrated more so into our best ideas, And then we added some new themes in our portfolio, commodities, emerging markets, and then also a little bit more in in in Europe. Okay. So let's focus in on that quoted equities piece then. Yeah. How is that positioned today? You... Sounds like you've broadened it out because we're maybe coming out of a period of US domination of the capital markets. Is that right? So that's that... That's right. I mean, what we were releasing and what we've written about in our annual report is from our perspective, we've moved away from a unipolar world or US exceptionalism, which has been the big thematic for the last few years, into a more multipolar world, where countries need to focus on their own sovereignty.

5:44 They need to build up their own industries, whether it's supply chain, security, infrastructure, energy security as we're as we're more so experiencing today, but just that more natch... A national build out. And last year was a very interesting year from the perspective of the fact that The US was not the best performing Yeah. Market in the world. And we're somewhat seeing some of this trend continue, and we more or less positioned ourselves. So that's why we really look to change the composition of our portfolio, more specifically within quoted equities, where we actually took down our US exposure from close to 6060% or 58% down to 35% last year. And we added materially to our exposure in Europe.

6:34 We also added to our exposure in Asia, more specifically China, whereas, as you know, we've we've been a long term believer in in China. We think that's increasingly more important in a world where you can kinda see that that race between China and The US around things like AI, global GDP growth, and so on. So we we think that China is naturally a market you do want to you you do want to own alongside other areas of the market and then and then emerging markets. And then, as I said, we also added our commodities exposure as well, and we largely have done that through quoted equities. We started thinking about this just in terms of our process really around the time that Trump was elected in 2024 in the fall. So we knew... You could see what his views were Yeah. In and around, his views towards Europe and other and other countries.

7:36 So... And what his views were toward NATO. He made that very clear in his first in his first term that he was less interested in in supporting NATO in the same way The US had before. So as a result of that, we started... We we put on a European aerospace and defense position within quoted equities that did very well last year. Yep. So... And as our thesis and our thoughts around the geopolitical world evolved, we really came to the view that we are entering a period of multi... Multi polarity. And as a result, we needed to look to diversify exposure for our shareholders. And that's where we ended up with this portfolio composition. And is this where the beauty of the kind of flexibility of the mandate comes in?

8:21 You're not kind of tied to being associated with one thing, whether it's tech or it's commodities. You're not a kind of hedgehog, let's say. You're more of a fox like kind of approach means that you can pivot to areas where the opportunity set can present itself. Exactly. Yeah. Now what we're really doing is... And we spend a lot of time, so going back to 2024, thinking about what are those long term structural trends that are shaping shaping the world and ultimately shape our our

8:52 portfolio. And then we think of them as, you know, ten year structural themes, and we start to build to build around them. Because we can be agile, we can also be tactical in the in the short in the short term, at the same at the same time. And and we can go anywhere in the world where the opportunities are. Yeah. So you can... If there's a technological shift, you can play that in the private markets. But if there's something that is better played, let's say, you know, European aerospace and defense, you've got the public markets available to you as well to be able to kinda capture that... Those opportunities. So going back to the kinda mandate of meaningfully growing shareholders' wealth over time, there's that kinda growth part of it, and that's... May... Maybe it's worth now talking about the private investments Yes. Where that...

9:41 Historically, growth has come from. Can you just touch on that, how last year was, how the performance has been? Yes. So

9:49 last year, had a very strong year in our in our privates portfolio, both in the returns at a healthy 18.3%, but also to... In the level of realizations, where we had a very strong year in terms of portfolio realizations. But if we run through the numbers, our over... Portfolio last year, up slightly over 18%. And then if we look at our ten year track record, because it's very important to look at private investments over multiple cycles, so ten years is always a good number. What you see is a mid mid teens return at 16.3%, again, very healthy.

10:28 Our directs portfolio last year did benefit from multiple realizations. So that way, that's that's where it was up close to 50% last year. But if we look over the last five years where, you know, people have indicated that the performance has not been as strong as private investments... For private investments, what we're seeing here is a very healthy 32% IRR for our portfolio.

10:52 And, we also had pretty significant uplifts to carrying values last year, and that would be to December 2024 carrying values, just over a 100%. That just generally reflects the conservatism in the RIT portfolio. And if we look over the last decade, that's roughly about 27 and a half percent. So just to clarify, that 112% means when you have exited a position in the private portfolio, you've marked it at

11:19 a 100 and you're exiting at 212 or whatever the math is. Whatever the math is. Yes. So, you know, I mean, maybe you're being too conservative perhaps, but, I mean, I've probably added an hour on the side of conservatism in the accounting. Well, we were... We have a very robust valuation process that's done by our independent committee of the board evaluation committee. Our... We... Our assets are revalued twice yearly in the in the directs portfolio and then every every quarter for our funds portfolio. So very regular, very, very, very robust. But but if I stick to realizations for a moment, what you'll see last year is three large realizations in companies like Webull, ZappoBank, and Scale AI.

12:05 And a couple of things there to note are we were we were quite fortunate in the sense that not only did we have an IPO and an exit with Webull, but with Zappos Scale AI, we also benefited from the m and a market. So two two ways for us to be able to realize really healthy returns for our shareholders. And it's also important to look at not only what happened in the year and how much money we made in the year going back to carrying values, but also too that we were able to generate healthy IRRs over the lifetime of those of those investments and also really strong return on original capital. So across these three investments, the return on original capital was about 2.2 times our money. Yep. The IRRs were about 22%.

12:53 And I think it's also interesting to note because everyone talks about the health of the vintages of 2021. And all three of these investments were made in 2021, healthy healthy returns. And, also, too, they were done earlier than what would... You would expect for a typical hold period, for for an investment, which is generally five five years. Now the reason why... And, hopefully, we can spend some time on our partners. RCP is really our partners and their ability to see and pick the best investment opportunities and then our ability through our network with them and our partnership with them to invest in some of their best ideas. But

13:35 some... A couple of other points on realizations is last year, we realized close to 20% of our portfolio. In the last two years, so we've had a consistent trend of realizations. We've nearly realized a third of our portfolio, again, through IPOs, and through and through and through m and a. And our funds portfolio also has been quite resilient, just a little bit north of 10% returns, and it's also self self funding. And you have this... So you have this funds portfolio

14:06 through these high quality partners, and then they give you access or they show you deal flow for direct co investments. Obviously, just just to touch on this 2021 vintage issue, obviously Yep. 2021, 2022 private assets or unquoted investments came into the spotlight for for markets because of this view that they are kind of unsellable or the... On aggregate for private markets, you know, exit activity is muted. Now that's an average number. Mhmm. I guess the point here is that your access to the highest quality, best players in the market means that you are still able to exit these companies because they're such a high quality, you know, caliber of businesses that you're investing in. So that there's always a market for these quality names, whether it's Facebook,

15:02 Meta trying to buy out scale AI, or Zappo Bank being exited through m and a. Is that is that a way to look at it? That... That's absolutely absolutely a way to look at it. So these are our top our top five fund partners. Thrive Capital, Josh Kushner's firm, Green Oaks, Neil Mehta's firm, Ribbit, which is Mickey's firm and and Iconic in BDT. And what you can see is they've been able to identify. So if we take Thrive Capital, you know, one of their, you know, last last decade investments would be Spotify. So Mhmm. You know, they've been in business for a very long period of time. And the common thread across our partners is in the last cycle, they were able to identify, see, and pick the best investment opportunities.

15:49 And we'd be fundamentally in this next cycle, they've been able to do the same. I mean, today's Thrive Capital is very much associated with names like OpenAI and Stripe and Yeah. And so on. Green Oaks with Wiz. Wiz is a common name because this is a cybersecurity firm which Google acquired or looked to acquire last year. They just got regulatory approval this year. So these are really your tier... In our view, the tier one players in the market. And that's also validated by the fact going back to to your views, and we have been asked, you know, environment for private exits have been fairly muted.

16:28 Why is it that you've been able to have realizations over the last few years? Not only last year, but the year before. It really comes down to our partners. And your access. And our access. And also, our partners are able to raise new funds. They're massively oversubscribed. We do get our allocation. But, again, in a world where you hear maybe some firms are struggling to raise capital, our firms have the opposite opposite problem. They're very much over... Oversubscribed, and it's really because of the quality

16:58 of of of their businesses. And, you know, the Rothschild Investment Trust was an early investor in Thrive Capital. Yes. And so that enables you to kind of have this relationship and kind of perception in the market amongst top tier GP or venture capitalists that you are the kind of a good partner of choice to have on there as an LP. Is that right? Yeah. Absolutely. Yeah. Lots of questions in about private... Yeah. Your your private exposure and

17:29 private markets and AI in general. I wanna come to those in a bit, but let's just move on to the

17:35 other part of your mandate, which is to obviously grow wealth meaningfully over time, but with lower risk, have a better journey. And that that part of that is... Obviously, a lot of that is by investing in quality assets that you see here. That's right. But another part of that is having a kind of uncorrelated pillar. That's right. So can we just touch on how that third key pillar has done for you last year and how you're kind of thinking about it? Absolutely. So within within uncorrelated strategies,

18:03 that delivered a twelve twelve percent return last year. It's about a quarter of our portfolio. And it varies very much designed to be that balanced in the portfolio, where we have gold and absolute returning strategies as well as credit funds. And I note those are public credit funds, not private credit funds. We don't own private credit funds. We've also been asked asked about that. So I'm just deleting eight questions saying, do you own private credit? So, everyone, good questions. Thanks for asking me, but we can assure you there is no private credit in the RCP portfolio. Correct. And this is just that steady diversifier, particularly in uncertain markets. We added to this part of their portfolio because we do fundamentally believe that there's going to be volatility going going forward just due to the macro and geopolitical forces that, you know, are really shaping the world that began

19:01 almost two years ago and we think will continue for the next decade. But again, for a fund like ours, this is a market that gives us compelling opportunities and also one that we thrive in. Yeah. So, yeah, I guess, looking ahead then, that's the kind of natural next next, how we positioned,

19:20 What are the most important forces shaping markets? What... Why is it that you think... Yeah. Here we are. Let's talk through this. Here here here are. So the two forces are, again, a multipolar role. So we're very much diversified within our quoted equities portfolio. And then the second the second part that's clearly shaping our investment decisions is really... Is is AI. Yeah. And then, again, just to focus on continuing to show a very good track record within privates going back to that is a that is a driver of growth within our portfolio, and we see that realizations trend continuing. I might I might take us back just a little bit to

20:05 this this slide this slide here. It gives a breakdown of our top positions, again, with our ability to be much more transparent. So this is a combination of our exposures to some of our most exciting companies in the portfolio, both what's in our funds book as well as what we own directly.

20:26 And so when I say we expect the realization trend to continue, the corporate activity to continue, that's because we've already seen it Yeah. In this... At the start of this year. What we have seen is the likes of Anthropic, going back to the AI theme, Databricks actually raising new rounds in this particular year. And we've seen the headlines all very oversubscribed. That's fine. But what we've really seen as well is that... Is very strong growth. I mean, Anthropic with nearly 20,000,000,000 of revenues and and very strong compounding alone. Is that right? Not in one month specifically, but but they are doubling doubling doubling their revenues. We also saw SpaceX merge with x x AI this year, so again, corporate activity, and we've also seen the headlines around their their considerations for for an IPO later this year. I should probably should mention actually just with SpaceX, that's now our largest position in the directs portfolio, just under 3% of our NAV, and also one of our top 10 positions within within our within our portfolio.

21:43 So if we look at this year, what we're seeing is a lot of activity. Stripe is also actively fundraising in the in the market today, again, off of the the back of very strong very strong growth. And then we also saw one of our direct companies in the fintech space, Brex. It was recently announced that they were being acquired by by CAPITAL by Capital One. So if the year unfolds, what we're seeing is a lot of corporate activity Yeah. Through additional fundraising or perhaps realizations like... Or upcoming realizations like Brex. And then in the second half of the year, the potential for IPOs with the likes of SpaceX. And then what we've also heard is Dario at Anthropix saying he'd like to be a private... Public company Yep. Towards the end of the year, and the same with Databricks. And what you're seeing is these companies really are starting to prep the public markets.

22:38 Anthropic and Databricks were at conferences in San Francisco. They're releasing their numbers. If you go on the Databricks website, you start to see their financial numbers. So, again, very strong indications that these are companies that would like to join the the public markets. And it's good to know that there is a role for public market investors. Absolutely. But I guess, let's take something like Anthropic Yeah. Which, you know, in a previous regime would have IPO ed well before $20... $20,000,000,000 of revenues. So these companies are staying private for longer, so you need to be able to access them in the private markets and be able to access the best ones because there's a whole sea of, you know, stuff out there that you don't necessarily wanna touch. Yeah. No. Absolutely. I think for LLM models like Anthropic or a p...

23:24 OpenAI and so on, these are businesses you can access through the public market, so there's scarcity

23:30 value. But you're also seeing a lot of that value creation. SpaceX has been a private company for more than twenty years Yep. And massive value creation that accrues within the private markets. There will also be value creation the public markets. But what we wanna be able to give our investors is access to these emerging winners, the value creation through the private markets, and then the ultimate exits through the public markets. So we skirted around... I mean, we've talked about fintechs, basics. We've skirted around this other issue that no one's talking about whatsoever, which is AI. Oh, yes. So maybe let's just give people some insight onto this this thing that is capturing the imagination. How

24:11 do you view AI? You've obviously touched on it being actually, is it a meaningful change? And then how do you think about kind of the portfolio exposure as a result? So I'll start for top down. So we spent a lot of time thinking about AI, its implications on our portfolio, and where we wanted to be positioned, and also to what we were seeing, around, around the inroads that, you know, many many new companies in the private space were doing such as Anthropic and Databricks and so on. So taking taking a look at that, in the

24:48 second half of last year, we actually sold our enterprise software exposure in our in our quoted equities portfolio, really with the view being that we believe we're exposed to the emerging winners across the AI value chain within our private spoke. So we had some investments in the likes of a Microsoft or Salesforce or a GoDaddy, and we actually sold all of that in the in the public book last year. And then... And we've really looked to think about AI across the value chain because, you know, the heart of what we do is ensuring that we're diversifying, but also have access to the highest quality ideas within within our portfolio. So we own names that are either building the LLMs. We own names like Databricks, which are support building out the infrastructure for the training on those on those models.

25:41 And then also, we believe that we own names like, like a Stripe or an Epic or Motive that use AI to materially enhance the application layer. And within the application application layer, here, we've got Stripe, Epic, and so on. Previously, we would have had those names in the public portfolio, But we thought, given what we were seeing, how AI is shaping, again, taking that multi multiyear view that we... You know, you would... One could see a valuation reset taking place. So we look to reduce our exposure, but still maintaining exposure through our private portfolio for our shareholders. So to be clear, on the left hand side of this slide that people can see is what you just call the value chain or the stack. This is where across this this new technological disruption, people can make money or kind of make investment decisions.

26:33 And you're exposed across a bit like, let's say, the railroad boom. You could... You know, the picks and shovels, the track layers, the steel producers. And so you'll... You... You've got the power and data sets, which... I mean, it's not on here, but you've got, you know, you've got access to the the miners and the and the producers as well. So it's not just in the private markets that you're No. As well. Because you need all of that for the build out. Lagrange will help with the data center build out as well. So we we do have elements of of that throughout the book. So we've had a couple of questions. Obviously, probably now is the time to take them.

27:06 Is this a bubble? There's a lot of, you know, perception out there that there's Mhmm. Valuations are kind of going beyond where they should be and there's a lot of froth in the market? So how do you view the opportunity, which is obviously massive, versus the kind of the discipline of allocating capital at sort of sensible prices? Yeah. So so we've been quite disciplined in where we wanna allocate and how we were thinking about our exposures. So we did add to our existing exposures through Anthropic and Databricks last year, and then SpaceX. But we've been very selective over the last two years in terms of new investments that we've added.

27:45 And when we think about that, what we really look to is to see, do you have a definitive business model? Are we seeing the the very strong revenue growth, you know, $20,000,000,000 of of of revenue growth, new product, adaption, and so on? Those are very strong companies. The companies that we stay away from and our partners stay away from that's in that frothier area is someone leaves one of these big firms, raises a seed round at $6,000,000,000. There's no product. There's no no revenue. There's an idea. There... There's an idea. We don't participate in that part of the market, neither and neither do our partners in that in that in that way. So we're quite happy with what we own. We see lots of people that do leave these companies.

28:31 But, you know, from from our perspective, we want to enter when those companies are much more mature and much more derisked. There's product market fit. There's growth that's demonstrable, and it's kind of predictable. Yeah. So I guess there's a question here, which actually is interesting on many levels. And they're very straight. When would you dispose of the OpenAI stake? Now, you know, you're obviously reassessing every investment at all times. How do you think about the kind of exit process for these things? So as as we said, there are... A lot of that there come through m and a or IPOs. You know, at times, if a position has become too big in our portfolio, as an example, we could consider selling that through the secondary markets. There's huge demand. Many of these companies trade, in some cases, at a premium to their last rounds and so on.

29:28 But we take a couple of things into consideration. Obviously, the investment thesis, we do want to think about the size of the position within our portfolio.

29:38 But the question really being, do we look to re underwrite our thesis our investments? And the answer is yes. We do that across the board. We wanna be very comfortable with the names that we own in our portfolio Yeah. Especially on the direct side. Exactly. And you touched upon it. But with the quality of the companies you have, you can always find a buyer for them in the secondary market, which helps you. Yeah, at times. At times, through the secondary market, if needed, just like we can buy through the secondary market. But we necessarily have been the beneficiary of very strong realizations. As I said, about a third of our portfolio is just naturally exited through public market IPOs and and M and A. Yeah.

30:24 So you touched on this. There's this growing narrative of AI versus versus software as if they're kind of two competing

30:35 manifestations. And you obviously touched on the fact that, you know, you you lightened up all your enterprise software exposure. Do you agree with that framing that's kinda capturing the market right now with, AI is going to eat software and software companies are gonna be worthless kind of going forwards? Or is that is that is that just a classic misperception of disruption and how it works? I... In my mind, that's just a classic misperception of how disruption works. It will shape the software software companies. Software companies might look... Use AI to leverage their existing businesses and make them and make them and make them better, especially for the companies that are not that are not complacent. So I think it's additive and shape things. I don't think you only... You solely get binary.

31:23 You know, it's it's not one winner and nine binary outcomes. No. We don't we don't believe in that. And in some cases, that's actually... At times like that, when no one really knows, that creates the opportunity. So you do your work, you take a look, you get to meet the management teams. We spend a lot of time following these companies and say, really now, what are the op... What what are the opportunities? Yeah. And, you know, the opportunity in many ways is sort of taking on the labor market or

31:50 augmenting what people do by using software and AI together rather than being in competition with each other. So I'm gonna I'm gonna start focusing on the questions now. But before we do that, do you wanna kind of close off on anything

32:06 in terms of our conversation before I go to the conversation? What are the kind of final thoughts you have to wrap up the slides that you've been going through? Well, I think I think it would really be going back to our positioning. And in an environment like the one that we're experiencing today, this is a market that benefits us because we are global. We are diversified. We're positioned defensively for growth. And we're also looking to find investment opportunities that aren't easily accessible to our to our shareholders, whether that's because most of our managers are closed, whether that's through private private investments. But we really do think having the flexibility which our mandate provides does provide an edge in markets like this.

32:54 Okay.

32:56 So this sort of global equity diversifier giving you exposure to growth, but with ballast in the portfolio to kind of manage the risk exposure and make that journey a bit more palatable.

33:12 The the shares are trading at a discount to the to to the NAV and performance as we saw in the opening slide has been strong. And the share price is, you know, in the twenties. How are you thinking about the discount? Lots of people obviously asking about this. Is is it something that's front of mind for you? It... It's definitely something that's front of mind for the management team and also our Board, and we've been very clear about that for the last couple of years. Ultimately, we do believe that it is performance that will lead to a narrowing of the discount. We saw... We we began to see that last year with the share total return starting to outpace the NAB total return. We obviously wanna do more of that.

34:02 We've been able to demonstrate, strong strong returns, like, actually across all three of our investment pillars. We've looked to enhance transparency, particularly on private... On our private investments where, you know, there are always lots of questions, and we wanna be able to give investors as much information as as we're permitted to in and around in and around that. We've also been broadening our retail and institutional reach. That's why we're quite happy to be here Mhmm. Today. We've naturally been buying back, our shares and...

34:37 Between share buybacks and dividends over the last few years, that's roughly 505,000,000 or we've repurchased more than 11% of our of our share capital. But we believe it's really a combination of these things, And we saw that trend as begin last year and clearly, want to double down on our efforts this year to be able to narrow that discount. So the discount creates this opportunity in many ways because it sets the bar higher for investments that you might make in the market because you've got this sort of almost risk free return NAV accretion that you can get by buying back your own shares and selling that return that you might get against know, private companies that you may or may not buy in the market. So has that

35:25 effectively set the bar higher for you, you know, when you're looking at opportunities when you've got a discount? It is. We look at share buybacks as an... Also as an investment as an investment opportunity, and it does it does raise the bar, particularly if you trade at at a wide at a wide discount. It becomes a natural area for you to think about doubling down on your on your investments. We do wanna make sure that we still provide that diversification. Yeah. But we've been doing a combination a combination of things. And it's kind of working if you look at, you know, NAV return, 14% shareholder return, 17%. So the share price is now outperforming the NAV. So that that is being recognized by the market, hopefully. And, you know, obviously, there's gonna be month to month volatility with wars and invasions or whatever it might be.

36:14 But, you know, the the the kind of capital allocation framework you've laid out here is hopefully gonna start... You know, continue, let's say, not start, but continue to bear fruit. To continue. Obviously, we wanna do we wanna do better better than that. We've got the foundation in place today to set us up for success. Question on Galderma, which I think is quite interesting. Did you buy it after the IPO or did you hold it through the private process? So we were not a pre IPO investor in Galderma. It is a company that we knew privately. It's not one that we had invested in the... In in that time, but we also know... Knew EQT very well. So we actually participated at the time of the IPO. Yep. So... In March in March 2024.

37:00 So we've continued to be holders. We've continued to add to that position, over time as well. And it's done

37:11 very well, and it's one of the case studies that we highlighted within within our annual report this year. Again, going back to the... Some of the synergies we benefit from from investing across asset classes. It's an asset we knew well. We've been tracking it in the private markets. We were quite pleased it was gonna go public. We were able to access it at the time of the at the time of the IPO because of the relationship that we had with EQT. We're also known to be a long term investor, so that very much helps. And then we continue to build on our conviction in Gilderma. Okay. And a few questions on Iran. None of them are asking you when you think the war is gonna end or what you think about it. But more... Thankfully, they're all about the kind of investment side of things, the portfolio. Any changes you've made as a result of the in... Of the war, or how do you think about

38:05 black swan events or however you wanna frame external macro shocks when it comes to the portfolio? So we we naturally don't wanna be reacting at at at the time that a war breaks up nor nor could... Nor can we predict when when a war is gonna come out. I'm I'm I'm saying that because we were positioned defensively coming into this year. Our equities exposure were, was lower than what it's previously been. It was in the low it was in the low forties. We were clearly adding to uncorrelated strategies on on that basis to build in that defensiveness in the in the portfolio. And then we also looked, as we said, to diversify our exposures on the quoted equities side of the book because, really, we run a lot of risk scenarios.

38:58 We think about different macro events and how they can impact our portfolio throughout the year.

39:06 So coming into this year, we were we were positioned defensively really because if we see a real dislocation in the market, we wanted the flexibility to be able to capitalize on the opportunities that the market was going to throw up. And that's really how we were thinking Yeah. About the world coming in, not knowing that we were going to see a war. But again, just looking at the geopolitical macro forces that I referenced and we wrote about in our annual report, we just said this is the time where you should be positioned defensively. Yeah. So you prepare for the worst, but hope for the best. Yeah. But in our case, you want to be able to outperform in macro different scenarios. So that's how we think about it.

39:51 Very quick one. Why do you limit fund investing to private equity only you don't? So no, we don't. We do a combination of the two. So in our quoted equities portfolio as an example, we will invest in very specialized managers, in the areas that really require that deep deep expertise. So take biotech as an example. We use specialized managers there. They have lots and lots of PhDs behind behind them. We benefit from that. Those funds are closed to new investors. So, again, giving our investors access to managers that might... That aren't easily accessible in the in the market. So we will we will use fund managers for that very specialized expertise to be able to generate alpha in that particular in that particular sector. And we do the same for China. So if you... Do you mind going back to your slide with the with the equity market returns I broadening mean, you touched on biotech there, which has been a painful space.

40:55 I believe the Nasdaq Nasdaq biotech index did 32% last year as well. And so that is testament to the fact that being diversified, going into a market regime like we are entering, being diversified is your friend rather than kind of narrowly narrowly focusing your bets in concentrated areas. Yeah. No. That's absolutely right. So bio... Biotech did have a challenging couple of years. We could start to see green shoots in the latter half... The first half of the year, and then we saw that strongly emerge in the second half of the year where our managers either benefited from very good R and D results or FDA approvals within the underlying companies. But also, as we saw, there was a lot of M and A that took place, in part because you had regulatory certainty come through

41:47 in The U. S. So as we could see a bit of those green shoots emerging, we actually look to add exposure to those managers to be able to benefit from those tailwinds that came in towards the end of the year. And just jumping around a bit, the the exposure to commodities, how did you express that? Was that through passive instruments, companies, or direct... You know, not buying blocks of copper and storing in the basement of the office? So kind of how how are you? No. We don't we don't we don't own them we don't own them physically. Mhmm. We were able to express our our copper and uranium exposure are at... To... Or gold miners or or silver miners, which is the combination of what we own largely through the through the public markets. Yeah.

42:32 So in our credit equities portfolio.

42:37 Glad to hear you don't own any private credit. Have you considered it? What would you make... What would make you consider it as an area of exposure?

42:49 Obviously, we like to look at areas of the market when everyone else is quite down on them. Mhmm. And that's what creates the that's what creates the opportunity. One of the reasons why we don't own private credit is we have... We already have sufficient privates exposure through our privates privates pillar. Yeah. And just from my portfolio allocation perspective, we believe that that's the right amount of private assets that we have to... Today. So it's not it's not an area that we would look to add portfolio... Add exposure to really from a top from a top down perspective in terms of how we wanna think about our exposure to to privates in general and just ensuring we've got that agility within the portfolio to look at other areas of the market. And then we've got one more question before we have to wrap up, which is will

43:37 SpaceX be held after its IPO if it does IPO? So if it does IPO... So the way we we think about we think about that is once an asset moves from our privates portfolio and becomes public, it gets reunderwritten as a as a public as a public opportunity. So as a result of that, we'll look at the risk weighting of... I'm sorry. The the risk reward return of of SpaceX probably... And and its sizing within our within our portfolio, and we'll look to make a a decision

44:12 a decision there as to whether we will we will keep it or not, at the time. And that's a little bit of what we did with Webull last year is when it migrated into our public portfolio, we did the same analysis. We decided that there were more compelling opportunities to invest in, so we looked to fully exit that position. Always re underwriting. So I guess let's wrap up then. If I was to try and summarize some takeaways, we've we've moved we've moved away from a world where The US is top dog and number two, number three players are kind of very far away and a market or an environment where there's very little technological disruption, really. Yeah. Sure. We had Google Maps and Spotify, but people kind of managed to find their way around and listen to music before then. But we are kind of entering a world where the number two, number three players are catching up and agitating,

45:07 and we're in a kind of meaningful kind of period of technological disruption. And so the previous environment kind of culminated in lending itself to taking very concentrated bets in one or two themes or pockets, probably in The US, probably large cap, probably focused on, you know, narrow tech. We seem to moving away from that and actually, therefore, being diversified, being flexible, and also kind of having access to, you know, the best quality people to express that is is the kind of way to be versus maybe a few years ago, you know, place your bets in some hedgehogs rather than the foxes to kind of use Isaiah Berlin's framing. Is that is that a fair way of doing it? I mean, that's our perspective.

45:56 And in in environments like this, these are these are the environments portfolios like ours thrive thrive in because they're they're built they're built they're built through that, and it's a lot more interesting. You're looking at different opportunities around around around the world, but it is ideally situated for markets like this, our our portfolio. Okay. Well, that's great. Just to wrap up, as many people listening will know, this was the two hundred and fiftieth anniversary of Adam Smith's publishing of The Wealth of Nations. So from 1776, the father of classical economics published a very seminal book. So I thought I'd end with a quote, if that's okay, Maggie. That's great. The global investment landscape continues to undergo a profound transformation.

46:44 Long standing assumptions around geopolitics, globalization, and monetary policy are being challenged, creating a more volatile and complex environment. We do not view this backdrop simply as a source of risk. History shows that periods of structural change often generate compelling long term opportunities. Now as you know, that wasn't Adam Smith. That was actually you, Maggie, writing in the RIT annual report, which can be found on the website. Very good reading. And I'm pretty confident that in two hundred and fifty years' time, investment students will be looking at this to kind of learn about how to access markets. So thank you very much for your time. If there's any questions that have come to you or will come to you later in the day, investorrelations@ritcap.com is the place to send them. Go to the RIT website. There's a treasure trove of information there.

47:36 And the team, Maggie's team, will look to address them for you. So thanks everyone for joining. Thank you, Maggie Perfect. For your time. Keep up the good work, and hopefully that discount can come to where it should be. Yep. Exactly.