Oakley Capital Investments Limited

Good morning. My name is Stephen Tredgett. I'm a partner at Oakley Capital, and it is my pleasure to welcome you to the Oakley Capital Investments 2023 Interim Results Webcast. In the next 30 minutes, we will cover one, the performance of OCI over the last six months of the year and analyze the composition of the portfolio. Secondly, we'll speak to the health of private equity as an asset class particularly funds being raised and deals being done and how this impacts Oakley. And thirdly, we'll look ahead considering the approach of the Oakley fund strategies, the current investment pipeline and the outlook of the portfolio. At the end of the presentation, we will conclude with a Q&A session and questions can be submitted in writing by the questions tab on the webcast page. Turning our attention to OCI's performance in the six months to June 2023 and as we will recount a focused portfolio of european tech-enabled private businesses has delivered another period of resilient performance the headlines are an nav per share of 663 pence and nav of close to 1.2 billion This is based on the portfolio being revalued at the end of June, and when including the dividend paid, amounts to a total NAV return of 0.5%. The shareholder return was just over 5%, double that of the FTSE All Share, and thanks to realisations in the period, cash has been significantly strengthened to now stand at £248 million. As the NAV per share bar chart shows, the 12-month performance is consistent with OCI's long-term returns. The five-year compounding average annual return currently standing at 22%. Arguably more importantly, OCI has one of the highest five-year total shareholder returns of any investment company. The six-month NAV return by our standards is relatively modest, but it's worth considering that cash, debt investments and investments valued based upon a transaction made within the last 12 months amounts to 63% of NAV, essentially resulting in two-thirds of the NAV, which was to remain static in the half. To explain this 12-month point, typically an investment made in the last 12 months will be held at that entry valuation given its proximity to that pricing event, regardless of its ongoing growth. This relates to new investments or reinvestments like Contabo, Velex, Fener, etc. And there are also those like Sajid that had a pricing event within the last 12 months and that valuation has naturally been retained in the recent period. Whilst the value of the remaining portfolio increased by 17 pence per share, the approach to multiples and trading outlook has been cautious, given the uncertain macroeconomic environment that persists. Dividing the NAV per sector, to run the NAV by sector, there are three things to note. Firstly, the portfolio is reasonably balanced across our four focus sectors. Secondly, we now have four focus sectors, up from three with the addition of business services. Not so much a new sector, but a more accurate segmentation of some of the investments that were previously categorised within technology. Those being data platforms like Velex and Tech Insights, and Testing Inspection Compliance and Certification Business , which has made incredible M&A progress in its first year investment. As you might imagine, it's a sector we have high hopes for. Thirdly, if we take you back to the sector split in December 2022, like so, and then advance again so we can see the change in the period, this reveals a decrease in the exposure to the education sector and an increase in the technology sector weighting. The combination of this move helps explain the average portfolio company multiple increase in the period from 15.9 times to 16.9 times with a mixed shift towards the higher rated technology sector investments. As is customary, we now break the 1.2 billion of asset value into OCI's look through exposure to each of the underlying portfolio companies, which now stands at 27. It gives an opportunity to see the investments that can have the biggest impact on future NAV growth. And as we run our winners, we see many of the largest holdings being our long-term flagship fund investments. Companies like Sajid, WebPro, Idealista and IU Group. As you'll be familiar, OCR retains two direct company holdings as a result of a legacy strategy and the aim at the appropriate time is to realise these positions. One is in the debt and equity of Time Out Group and the other in the debt of NorthSales. It is pleasing to report improving and profitable growth in both companies. This year, NorthSales is the fastest growing company in the portfolio as sales and masks both enjoy strong volumes and have successfully passed on high material costs. The apparel division is also delivering strong underlying trading driven by e-commerce and outlets. The combination see the group ahead of budget at this point in the year. Timeout reports its four-year results in the coming weeks and will be reporting profitable growth in both its media and markets divisions, with a further nine of their hugely popular food markets now signed and currently in development. The average organic weighted EBITDA growth of the 27 companies at the period end was 21%. This was achieved against economic headwinds and high inflation and reflects the founder-led, digitally-disruptive nature of the portfolio and the recurring or subscription nature to their revenues. To touch on some of the highlights by sector, within technology, the key long-term trend of the shift to cloud and hosting solutions continues to lift the portfolio, with companies like Contabo, the leading web hosting service provider, growing EBITDA at 30%, with its 27 data centers across four continents serving over 300,000 customers. The consumer sector will be forgiven for having a weaker period of performance. And while some of the companies like Windstar and Vice have experienced some short-term headwinds, Three of the top five fastest growing portfolio companies are consumer businesses. Companies like Edelista, Southern Europe's leading property portal, which continues to benefit from the rising demand of its solution. A solution which is still very much under-adopted in the region, compared to groups like Rightmove operating in the mature UK market. The megatrend of the growing global demand for high-quality, accessible education drives all areas of the industry, none more so than the demand for premium private schools, which Affinitas is proving to be a beneficiary of. The roll-up vehicle only launched last year and is already a group of 12 schools in Europe and America, with 10,000 students generating close to 20 million euros of EBITDA. In this fragmented market, there are few school groups of this scale. And finally, the newly segmented business services. We touched early on some of its constituents and their mission-critical roles in a data-driven economy. Legal data company Velex and its cloud-based online subscription platform was one such example, which following its acquisition of Fastcase has created the world's largest law firm subscriber base and a library with more than 1 billion legal documents from more than 100 countries. Finally, in this section of the presentation, the last of the portfolio company KPIs is that of leverage. The multiple has fallen to four times net debt EBITDA, demonstrating that in the current environment, we are allowing the portfolio companies to deliver. We would expect the level to drop further for 80 to 90% of the portfolio going forward, with the exceptions being those that are increasing driven by M&A. These levels of leverage are lower compared to a global PE average of seven times. And to underline the point that Overly does not rely upon investing company leverage to drive returns, we have broken down our realized returns to date by the four main contributing factors. As you can see in the pie chart, the use of debt only contributed to 1% of realised returns so far historically. M&A, a key value creation driver, stands at 10%. EBITDA, multiple expansion, 23%. But most importantly, organic growth, our principal focus with making investment, has delivered 66% of realised returns to date. As an aside, Oakley Fund's realised investments have generated 5.2 times money multiple and a 72% IRR, which underlines the OCI board's desire to maximise the balance sheet exposure to the funds and avoid cash drag where possible, a topic we'll return to. There are dangers in summarising the health of an entire asset class, but we can certainly touch on some of the themes that are most focused upon. After a 17% fall in 2022, global PE fundraising has continued to drop and is expected to retrench to its lowest level since 2016, with 2023 at a run rate 35% below that of last year. It will, however, be a year in which the second highest number of funds will raise capital. Our observations are that a high proportion of investors plan to actually up or maintain allocations over the next 12 months. Despite this improved sentiment, the fundraising market will continue to be tough. And as a result of recent years of oversupply and the abundance of funds attempting to now raise, For a more cautious investor base, a repeatable strategy and consistent past performance will be critical. So expect more divergence between managers who can successfully sustain their fundraising momentum and those who cannot. We would note three things. E-funding is not in any form of structural decline. It's still a relatively nascent asset class with significant scope for growth. As we've highlighted in the past, there is only circa $10 trillion of global PE managed assets versus the approximate 110 trillion in public markets. The large global PE funds are typically the acquirers of Oakley portfolio companies, and the firepower within these funds remains undiminished, with them representing the lion's share of over 1.1 trillion of PE dry powder. In spite of the backdrop, the Oakley funds by the end of September will have closed near to 4 billion euros of funding in the prior 12 months, reflecting the demand of the performing managers and leaving us well positioned to take advantage of an opportunity rich environment. For our deals being done, the global aggregate private equity exit values are down significantly this year and could finish as low as half the value of 2022. The trend, however, is an improving one with quarter on quarter growth, a market consensus regarding the peak of the rate of the rate hike cycle, helping to provide some certainty on deal financing. Anecdotally, we've seen a market bifurcate between large, scarce premium assets. And as the chart shows, with the number of deals closed being up year on year, the most active area for deals has been the mid-market and below, where debt is less of a driver and founders are looking to equity, not debt, and partners for support. These two trends, as you might imagine, have significantly benefited Oakley. Fund 3 SAD of IU Group, on the subject of premium high-quality scarce assets, realized a near 14 times return and generated proceeds of 240 million for OCI. The funds made two new platform investments in the half, including Fund 5's follow-on investment in IU Group, alongside 1.1 billion euros of third-party investment. We retain high conviction in the long-term potential for IU, which remains the largest and fastest growing university in Germany and a global leader in online, in education technology. And we believe there is an opportunity to leverage AI, M&A, internationalization in order to continue to drive this impressive growth. And secondly, Thomas's, one of the top-rated co-educational independent school groups in the country, where we see the opportunity to partner with the founders to further develop current facilities across the schools and invest in new opportunities to expand Thomas's offerings and sites. In addition, and post-period end, Fund 5 signed the carve-out of dental laboratory operations within the European Dental Group. which, led by its founder, Peter Hove, will form one of the leading oral care and services provider groups in Europe and launch the start of a new roll-up strategy in a largely unconsolidated market. It's been a busy period for Boltons by the existing portfolio companies, with over 15 completed in the first half. The largest was Velex's acquisition of Fastcase and Afinitas's acquisition of Spanish premium school, XIC. The other particularly active companies include Fenner, Ecommerce One and Brightstars. Historically, distributions from the funds as a result of realisations, the purple bars on the chart on slide 25, have broadly matched the capital cause required to fund investments, the black bars. The high level of proceeds in the first half of the year have provided a timely boost to the OCI balance sheet. Cash has grown nearly 126% in the first half of the year to 248 million as at the end of June. And post-period end, OCI renewed and expanded its revolving credit facility, raising total committed lending to £175 million, a significant vote of confidence in OCI from its lenders in what is a tight debt market. This brings total available liquid resources to £423 million. And it compares to OCI's outstanding Oakley fund commitments of £893 million. We show this number in the gray bar to the right-hand side, broken down by the commitments in each Oakley fund, with a significant majority of the commitment being in the mid-cap buyout flagship fund five, which was launched in 2022. The middle bar in purple breaks this down into the expected timing of the drawdowns, i.e., when will the Oakley funds need the cash committed to them? There is £308 million expected to be called in the next 12 months, £360 million set to be called after 12 months and over a five-year period, and finally over £200 million that is not expected to be called. So current liquor resources can be reasonably expected to provide two years of drawdown cover if the funds were not to generate further proceeds during this time and the funds continue to invest at their current high levels. As we consider future fund activity level, it's useful to consider the current holding periods of the underlying portfolio companies. Oakley's job is not to time the market, but to deploy capital evenly over the cycle, and the chart demonstrates that. The average holding period of realized Oakley investment to date is about 3.7 years, and the average holding period of the current portfolio is 3.2 years. This is, however, skewed by the longer hold periods of north sales and timeouts. If we remove them from the calculation, the weighted average hold period is closer to 2.5 years. This reflects the recent years of investment activity and takes us back to early in the presentation when we touched on the amount of NAV which was priced by transaction in the last 12 months. Despite this average age of investment, we still anticipate a number of possible realisations within the next year. And in the third, final section, we look ahead to the prospects of OCI and the Oakley funds. As you'll be aware, the underlying OCI portfolio companies sit within a number of Oakley funds and strategies. It started with the mid-market flagship buyout fund, now Fund 5, then came the lower mid-market Origin fund, with Origin 2 expected to be announced shortly, and then the venture capital strategy, Profounders 3. Rather than moving up the size scale to raise much larger funds to invest in much larger companies, Oakley has looked to invest across the company lifecycle, partnering as it always has done with ambitious and proven founders. To this end, the identified gap in the Oakley fund strategies was a growth technology solution, a strategy that would invest in the series B and C rounds of fast-growing software companies. Oakley Touring Venture Fund was launched in June to do just that. Oakley has partnered with a team that has built three global venture investing franchises, including Qualcomm and N12, Microsoft's venture fund. Over this time, they were the early backers of companies like Zoom, Kahoot, and Waze. The fund's focus and the team's particular expertise is in identifying investment opportunities in proven next-generation software businesses for the modern worker, powered most importantly by generative AI. Encouragingly, over 25 founders that have been previously backed by Oakley and the Turing Partners have already committed to the fund. Oakley has positioned itself well around prior generational shifts like the smartphone and cloud computing. And we believe that generative AI represents the next paradigm shift. Oakley Touring will, we hope, not only enable us to capitalize on this opportunity, but the team is also helping us, helping our current portfolio companies navigate the adoption of this technology. In the last couple of slides, we look at the health of the deal origination, which remains one of Oakley's key differentiators. The funnel here represents the relatively near-term pipeline of opportunities, which is in very good health. This has been driven by a number of factors. There's those that are Oakley specific that you'll know well. They are our unique founder-led network. that not only we continue to be able to back on numerous occasions, some of which we back three or four times, but they endorse us to other entrepreneurs throughout Europe who present other opportunities to us. We are... consistently and increasingly considered to be the partner of choice of founders, founders that want to continue to work within and own the businesses they've operated in, but they want help kind of professionalising, growing those businesses, internationalising those businesses and with M&A, areas that we have considerable track record in demonstrating. There is also the deep sector mapping and scoping that we do within these focus sectors that drive and reveal opportunities for us. There's also levels of disruption in the current market that are providing us with opportunities. Disruption that maybe lower, middle, mid-market companies want to take advantage of. They see the opportunity to get a backer at this point in time in order to take advantage of that disruption, or there are companies that are currently overcapitalised in a high-cost debt environment and they need to restructure their balance sheet, all of which is driving a large pool of opportunities towards Oakley. As the funnel shows, there are, in the more immediately considered pipeline, 18 companies which are in due diligence. They are spread across the four sectors, with education and business services accounting for two-thirds of those in due diligence. Most notably, three companies have received recent offer letters are companies based within Southern Europe, and the region has been an increasingly attractive area for us. Why is Southern Europe proving such a a region that is delivering a significant number of attracting opportunities. There's three kind of key reasons for that. One is the lower current adoption of digital solutions within this marketplace. We have the ability to repeat what we've achieved in now mature geographies like the UK and Germany, in countries like Germany, Spain and Italy. I mean, Spain's cloud adoption is significantly below that of the EU adoption, with 31% of SMEs using cloud computing in Spain versus 41% of the EU on average. And then there's Italy and e-commerce. Only 40% of Italians, the entirety of the Italian population, have executed any kind of e-commerce. We often talk about it in terms of price comparison website, and the fact that even after COVID, online car insurance only accounts for less than 20% of the market. I mean, here in the UK, it's closer to 80, 90% of the market. And so consequently, there are plenty of market leaders that we can invest in that are growing in these regions, not thanks to their underlying markets, but thanks to the digital disruption, the adoption of digital solutions. Secondly, there's low PE penetration. Compared to the UK market, for example, Spain has less than a quarter of the PE investment by GDP. And finally, it's a large addressable market. Spain is increasingly at the centre of the Spanish-speaking world, which is estimated to be a populace of some 600 million people. In closing, the outlook is bright for a resilient, well-positioned portfolio of companies. Whilst Oakley, in the meantime, an innovative investment manager, is uncovering the next generation of opportunities in pioneering areas such as generative AI. As a result, we are confident in the continued delivery of our performance of OCI and for OCI shareholders in the rest of 2023 and beyond. Thank you very much for listening to the presentation stage of the webcast. And I'll now hand over to Rosanna, who will lead us through the Q&A.

Thank you, Stephen. And thank you to those who've submitted questions so far. As a reminder, for anyone who'd like to raise a question, please use the question tab at the top of the webcast page. And we'll do our best to get through as many questions as possible in the remaining time. With that said, let's kick off with a question on portfolio performance. So, Stephen, which have been the best performing companies from an EBITDA growth perspective? And are there any common themes between them?

We've kind of teased out some of the names across the presentation. If I take the top five performers by EBITDA growth, they are North Sails, IU Group, Dexter's, Contabo and Idealista. In terms of commodity, I mean, they're across three of the four sectors, so there's no real common thread other than demonstrating the typical kind of characteristics that you would imagine of Oakley companies in that, you know, characteristics that you'd be particularly familiar with. They're digital disruptors, so they don't rely necessarily on market growth. They're all founder-owned. And anyway, we've backed those business leaders on the same terms as us. They've got the same long-term alignments. They've got a level of recurring revenue to all of them. And I guess most importantly, they've all got those big megatrends behind them. What's noticeable, and probably, as I said earlier in the presentation, and probably unexpected, is the consumer weighting of those five companies, which you wouldn't instinctively have expected, given the macro environment. But that does, again, speak to that disruptive nature of these businesses. We talked about Idilista and DEX. They're both taking market share for their own respective regions. I mean, we talked about underpenetration. roughly speaking, Iliadista kind of represents, you know, with 60% of the, of the Asian market versus mature right move, probably representing 90% of the Asian market.

Fantastic. Thank you, Stephen. We've had a couple of questions on the theme of cash. With the current cash level, do you expect to be continuing with share buybacks in the second half of the year? Thank you.

The board aren't predisposed to make buybacks. That is a philosophy that's very close to their hearts. They've stated that there is an existing and ongoing buyback programme and they have 11 million of outstanding authority. The key consideration, so I guess when they're not making a buyback in any particular quarter, why? I guess the key consideration is that there's not the cash level per se, but the excess cash level. So the board has made commitments to the funds in advance based upon expected cash flow in order to ensure the efficient use of cash and maximise shareholder returns. the expected annual drawdowns by the funds and the forecast proceeds are considered to determine the cash that is required to cover the activity levels in the near to medium term. And so if we have cash in excess of that, it's available for buybacks. Yes, you can expect buybacks kind of continued over time. The exact timing of that really depends upon the excess cash. And so if you don't see a buyback at any point in time, there's a good reason for that. It's not a change in philosophy.

Thank you, Stephen. Another question on the discount. Why does the discount remain so wide and how do you intend to close it?

Yes, look, it's a question we're always going to be asked and it's a question that you... It's an answer that you could debate extensively and have its own webcast. I mean, I've... If I was to identify the three key reasons for its existence, I mean, one, it's indiscriminate. I mean, this is not just across OCI. It's not just across listed PE. It's across invested companies. I mean, on the last look to the AIC stats, I think 14 of the 16 sectors within the investment company kind of universe traded at a discount to NAV. And one of the kind of main reasons for that is that in the main, these are small mid-cap companies and are relatively illiquid. So when you go into a period of a flight to quality as investors move to larger companies or with funds, you know, kind of outflows, then, you know, the area that significantly gets hit, not just investment companies, but it's small to mid-cap companies. Secondly, there is a few that focus on the discounts, perpetuates discounts. Funds, investors trade around the discount level. So as they close, investors sell and they buy when it widens. So to some extent, there is a challenge in kind of breaking out of the discount factor. It is possible, though, and listed PE firms have broken out of that in time, and I'll talk to some of the reasons that I think that could be achieved. The structural problem that I think essentially is demonstrated by the discounts, particularly as you see the kind of consistent performance right across the sectors and yet, right across the sector, and yet you see such in really, I would say, a peer group that's pretty high quality, and yet the discounts kind of persist. And that structural problem is the ability to kind of accurately assess the underlying assets. One has to take a view on on the underlying investments without, you know, with relatively limited amount of information. I mean, we go to a increasing extent to kind of give you background information, produce a report on accounts, which really gives some underlying information about each of the companies, what's driving them and the kind of level of performance within the period and what we can maybe expect coming forward. And we've consistently been delivering that. However, I mean, we're, you know, we have more transparency than most, but it's still not, you know, kind of, and it will never be perfect transparency because we want to retain the information advantage of these companies being private, but for lots of reasons, but not least because you don't want to tell everything to your competitors. So as an investor, you've got to take a view and maybe naturally, you know, apply a discount accordingly. Added to this is that, you know, the PE space and the listed PE space in particular isn't widely known or understood. It's a relatively small listed sector after all. But I think most importantly, from my perspective, whilst this all sounds like three factors that are never going to change, they all are changing. You know, there's fund flows, you know, back into the UK public market. There are, you know, kind of improving valuations around, you know, kind of small mid cap. And I think most encouraging for me, there's kind of improving media coverage in the sector and also a rising retail ownership. institutional funds, you know, Canada may be quite restricted from their ability to invest in companies. And kind of retail, I think, are kind of taking ownership into their own hands. If you take OCI's register back to 2020, 3% of the register was owned by private investors via the kind of typical kind of platforms, share buying platforms like Hark of Lansdowne, Interactive Investors and the like. If you combine those now, they now represent well over 15%. with a couple of them being in our top 10 shareholders. So there is this kind of move towards the asset class and also this kind of move towards OCI. I mean, the other thing I would say, despite this mispricing, Discounts shouldn't be the primary focus for any investor's source of returns. I mean, the asset growth is key to that. So what can we do about it? And I guess some of it kind of relates to what we kind of discussed here. I mean, there's education. There's increasing the understanding of private equity, what drives it, the kind of assets that we can get access to, which frankly are not now going to the public markets. There's the transparency. We're going to keep, you know, kind of driving the amount of information, the frequency of information we provide and enable that increasing confidence in the NAV and its kind of future growth. I mean, it's ridiculous that the share price doesn't at least trade it now, given the kind of consistent growth of that NAV. And then there's returning cash, kind of through buybacks and dividends, which we have consistently done so in the past. Most importantly, the things we can do is perform. And perform does two things. It's obviously in creating returns and driving shareholder returns, attracts more investors to the company. And alongside that kind of creates scale. So you create confidence in future NAV growth, you drive further buyers and with scale brings liquidity. In terms of anything kind of particular to us, look, I think the sound of the direct assets would be kind of helpful in that kind of last stage of the different elements we wanted to address when we outlaid our plan for OCI some time. five, six years ago. Now those direct investments can prove to be a distraction and it would also provide, you know, kind of further liquidity for buybacks.

Thank you, Stephen. We've had a question come in about leverage within the portfolio. So your four times EBITDA debt to EBITDA ratio is well below the PE market average of six to seven times. Can you say how much of EBITDA is now going to be used for interest payments compared to, say, the five year average? And how do you see it developing over the next couple of years as hedges mature?

Well, I don't have the specific number for EBITDA coverage of... Well, I have the specific coverage of debt rather than the cost of... the coverage of cost of interest. But as the as the kind of slide demonstrated, we expect the the level of interest payments to kind of decrease over time as we continue to, as we continue to reduce those leverage levels, as we as we said, the vast majority of the portfolio we expect to continue to deliver. And then in terms of kind of EBITDA and its use to pay interest. I mean, one, we've been able to kind of hedge the large majority of the portfolio, so we haven't been so impacted by the rising rates in the kind of more recent period. The other thing is, I mean, the nature of the kind of a tech portfolio as ours is that there isn't much... capital cost associated with growth below the EBITDA line. So much of that EBITDA converts to cash. So we have a particularly cash rich set of portfolio companies, which means that they are very comfortably many times meeting their interest payments.

Thank you. We've got time for one more question now. If there's anyone who's wanted to raise a question but we haven't got around to answering it, please do reach out separately and we'd be happy to explain the answers. A question on AI. How are Oakley's portfolio companies responding to the threat of generative AI?

I think the first thing to say is it's an opportunity and a threat. and how we respond. First of all, we're making sure that boards are engaging with this topic. There's clearly different companies will gauge that opportunity and threat differently. Some boards, you know, maybe are, you know, kind of less engaged. Others are kind of well ahead of us. Our job is just to make sure that this is being discussed at board level and we're availing management teams, you know, with access to kind of expertise. Our general view is that we think for the majority of the portfolios is a considerable opportunity. And so to kind of do that, we, we talk about expertise and that's really being delivered by the Oakley Turing team. I mean, the Oakley Turing team really principally are looking to find appealing investment opportunities, you know, with companies that are being driven by generative AI, but they are also extensively sharing their knowledge with the existing portfolio companies. They've also, so they've met companies Most of the CEOs within the portfolio, they've done an analysis of our four sectors and the ways in which generative AI will impact those. And they've also provided kind of workshops and teachings to the kind of broader investment teams. As I kind of said earlier, we think this is a really significant generational shift in technology, and it's one we really feel we need to be abreast of. In terms of examples within the portfolio companies and their response, the most obvious one is IU Group. with the launch of an AI teaching assistant since here. And this is using an AI tool to help assist students learn at their own pace and style. And the findings and impact of this have been really impressive and encouraging. I mean, I think that there's a number of things about traditional kind of teaching techniques. They're quite rigid. Even online techniques are quite rigid. But the majority of students learn in a room with a large cohort, given exactly the same information over the period of time, and then they're tested on that information. And that will increasingly be seen as a completely outdated mode of education. Whereas tools like Cynthia can help assess a student's understanding through the questions and responses it provides. So it's understanding that a student maybe understands particular topics better than others. it receives it receives certain information better maybe by written word pictorial etc it has a leaning towards certain frames of reference and particular fields of interest all of which you can incorporate in how it delivers information in a relative and um kind of most impactful in a kind of way to the underlying student um what's really notable as well is that the the student will ask an online teacher like cynthia and at least three or four times more questions than it would ask a kind of real life kind of teacher or lecturer so that so actively prompting for more information and in doing so revealing their own levels of knowledge or or gaps within it Other examples would be data platforms like Velex, which is considering how best to incorporate AI into its, you know, kind of, to kind of leverage the incredible library of legal information it has across kind of multiple countries. You have to be careful of that to make sure you're re-fencing that data, but you can certainly kind of turbocharge the solution using AI. And then finally, there's a company like SeaTac, which as you may recall, kind of uses contextual solutions for advertising. So in a kind of cookie-less world, it enables an advertiser to understand who the viewer is or the reader of a particular website. If you have that information from SeaTag and you combine it with some of the incredible kind of AI-driven advertising solutions, you can create real-time bespoke adverts for individuals based on the individual's personal interests and the articles they're reading, which is an incredible future for contentious advertising. Is that my last question, Rosanna?

Yes, thank you, Stephen. That's probably all we've got time for. So I'll hand back to you to wrap up.

Thank you so much. And thank you for joining us today. As I repeated at the end of the presentation, the outlook is a very positive one for the Oakley portfolio of companies. And And I think the kind of average EBITDA growth at 21% demonstrates its kind of recurring ability to grow in spite of maybe in markets which haven't grown particularly over the last six to 12 months. And we have a pipeline of really exciting opportunities. We signed, as we mentioned, the dental labs group in the last couple of months. And we expect to sign further deals in the month ahead. And in the meantime, given the kind of size and holding duration of some of the existing portfolio, we look forward to kind of further attractive realizations within the portfolio. As you will no doubt be familiar, our exit track record is such that These are deals that are often sold at significant premiums to the current book value. The average post-IU group is about 35%. So thank you for joining us and we look forward to continued outperformance for OCI in the rest of 2023.