Polar Capital Holdings plc

Thank you all for joining us this morning, for taking the time. As I said, I'm Ian Evans, newly appointed Chief Executive Officer at Polar Capital. And together with our CFO, Samir Ayoub, we'll take you through the interim results for the six months to the end of September. Beginning with the highlights, please, Hannah, on page two. As a prototype start actually to the period in equity markets, but a positive end to the period led to assets being up 25% over that period. a record high of £26.7 billion. Despite outflows over the period, those outflows in the police report were concentrated in the first quarter and were mentioned slow materially in the second quarter. We saw broad demand across a good number of our strategies and improving performance over the period. As you can see on the screen there, adjusted diluted total EPS of 21.9p and we are maintaining the dividend, the interim dividend at 14p payable next January. So I'll start with business and strategy, talk with you through performance and flows and then I'll pass to Samir who's going to talk to the financials. But on to page four, please, Hannah. Continuously parity and growth. So the leadership transition has been completed now over the summer. And after 21 months at Polar Capital, unsurprisingly, I have a deep understanding of our people, our clients, and our culture, which has enabled me to hit the ground running. We've already put in a focused leadership structure, and that's primarily to speed faster decision-making and increase accountability. As you can see on the middle of the slide, the vision is a very straightforward one, which is to be the active fund manager of choice. Now we're recognised for our distinctive high conviction strategies. We do that through our distinct culture, which empowers independent thinking and high performance. Our ambition is to deliver diversified growth, and that's through differentiation and focus. We want to do that without diluting who we are. The next slide, page five. We are coming from a position of strength. We start from a position of strength. We have a strong brand and reputation. We have a very strong culture and talent within the business. Deep investment expertise and specialist products. We have longstanding trusted client partnerships. And all of that is backed by a strong balance sheet, which gives us flexibility and optionality through the cycle. Stepping into the role, or having stepped into the role, priorities, I think about two priorities here. One is to amplify our core strengths. And when we think about our core strengths, I think about that across three things. Firstly, the product. As a product perspective, we need to scale our winners. Take targeted action where improvement is needed through support. And then refocus and allocate our resources where we have capacity and a proven edge. In distribution, we're quite unique as a boutique in that we have an international footprint. And we look to grow in priority markets globally, deepen relationships where we're well established and defend our market share, which is important to get scalable net inflows over time. Our culture, very briefly, we have a very specialist culture. proud of it having worked with the firm for 21 years and it's absolutely critical to me that we protect that culture it's entrepreneurial it's vibrant it's collegiate where people are empowered you know trusted and accountable and it's absolutely imperative that we maintain that and secondly we will continue to diversify the business selectively. We can do that through adding complementary differentiated investment teams. We can add strategies and vehicles to existing teams. But it's absolutely critical that we have a compelling investment case where we do that and that there's clear client demand. Over the page, briefly, I think while we can't be complacent, we cannot afford to be complacent, we are well placed for the cycle ahead. As I've said already, we have those differentiated specialist strategies. We have a basic advantage. We are specialist, entrepreneurial. We can make fast decisions, which enables us to be agile. We don't have to be first mover, but we can be a fast follower. We have a strong distribution footprint, particularly strong in the UK and Europe. Again, we're quite unique as a boutique in that nearly 40% of our total assets are from international clients and we can continue to build on that. So we have a strong base in the UK and Europe. I see a step change opportunity in the US and we can build on our foothold in Asia. And the digitization of the business means that we can extend our reach very efficiently and actually compete with the larger groups. It levels the playing field. I want to mention culture and talent. It's very strong. It enables us to hire and retain high conviction teams. And then on brand strength, we do have a very strong trusted specialist brand, and that is recognized and valued by clients. Starting briefly to performance on slide eight, you can see here the performance of our USITS product, which represents three courses of our total AUM. And as you can see, relative to their respective LIPA peer groups, over one and three years, two thirds of our funds are in the top two quartiles. Over five years, that rises to 85% of total funds. And then since inception, 100% of our funds in the top two quartiles. I'm pleased to report going on to slide nine, please, Hannah, that performance, we saw a strong rebound over the six-month reporting period. That was related by technology and their high conviction AI exposure. Healthcare and biotechnology also bounced back strongly after a softer Q1, and we saw strong performance from our smart energy team. Not all of them has performed as strongly, though, with the exception of Japan, which was a strong performer. Our single country and regional funds are behind benchmark year to date. And our priority remains across all teams to deliver outperformance through the cycle. So targeted support and fixes where needed. So what does that mean for founders over the period? If we take on slide 11, please have a quick step back. It's worth highlighting, as I'm sure many of you are aware, that it continues to be a tough environment for active fund managers, particularly active equity. So you can see in that chart on the top left, Active equity globally has been in net outflow for seven of the last eight years, 2021 being the only exception, and 2025 looks to be tracking in a similar way. In that context, public capital has been relatively resilient, as you can see, and pleasingly, the run rate has been improving since 2023. But with dispersion volatility picking up in markets, which has historically benefited active high conviction strategies, we hope that the backdrop is improving. So over the next slide, as I mentioned at the outset in the highlights, on-time high of £26.7 billion at the end of the period. And with investment performance and strong markets, particularly in tech, we have had that technology tailwind. That's continued to rise since. So you can see there just over £28 billion as at the 7th of November. Average AUM, which Simone will talk about, was up 5% over the period. And it's worth noting that following the Liberation Day announcements back in April and the sell-off in equities, we did see AUM trough at £19.9 billion during the period. But Simone will cover that in more detail. So in terms of flows, onto the next slide, for the six month period, we recorded net outflows of 690 million, including, oh sorry, with the addition of a 280 million one-off return of capital following an investment trust corporate action, which was related to our financials, Douglas Financials Trust. The outflows were concentrated in healthcare, European and UK equity, which remained out of favour with investors. And then we also had outflows in emerging markets, which was driven largely by a separately managed account from an overseas investor closing. The run rate, though, improved significantly through the period. So the net outflows in Q1 was 632 million and fell to 58 million in the second quarter. So that's an encouraging positive trend. But I should highlight that visibility remains limited with volatility that we see. Redentions are too volatile and concentrated in nature. Turning briefly to gross and net flows, what you can see on this slide is that, as I mentioned at the beginning, we've seen broad demand across our strategies, particularly strong in technology, healthcare, insurance and emerging market stars. But that strong gross interest has been muted by net outflows. And pleasingly in the US, our international small company fund, which we launched just over a year ago, has continued to see net inflow. And that's really on renewed US appetite for international equities, something that we've not seen probably for a decade. In the UK, and UK actually specifically, sentiment does appear to be improving, but caution is definitely persisting ahead of the November budget. And we've seen that in, I don't know if you may have seen the data, record outflows in October in the UK. In the current quarter, our flows are marginally negative, but we are seeing a rising level of investor interest and strengthening pipeline for potential inflows. So our focus simply is on turning that gross interest, which you see on the chart there, into durable net inflows. With that, I'll pass over to Samir to take you through the financials. Thank you, Ian, and good morning, everyone.

Usual seven slides covering our financial review. and I'll spend a bit of time just explaining the P&L for anyone that is new to Polar. First of all, average AUM over the six-month period, as Ian explained, up 4%, but underneath that, it's really been a story of two halves, really. Tariff-induced volatility in the market over Q1 meant that average AUM was 21.9 billion, so below both comparative interim period. So really started from a low base. And then the rebound in markets, but also good relative performance for our underlying funds meant that we ended up with a Q2 average AUM of 25 billion. And that's very important because that's the average AUM that we're carrying into the second half of the financial year. So I'd explain some of the journey underneath that overall average AUM for the six-month period, up 4%, as I explained. Net management fee revenue was relatively flat at 86 odd million. And the reason for that was net management fee yield coming in at 75 basis points at the end of the six-month and it's September. And that was for exactly the reasons that we flagged at the start of the financial year. It was entirely anticipated and we had 6%. two basis points that we've signaled to be the long-term run rate for fee compression. And the reasons that we signaled was that we had renegotiated the fees on Porter Capital Technology Trust, which is a 6 billion closed-ended vehicle. That comprises a good 50% of that three basis points margin contraction. And the other dynamic that played out over the first half of this calendar year really was the sharp weaknesses the top revenue line. And obviously, there is ongoing underlying product mix changes as we've seen for a while. What does that mean for the fee year over the full financial year through to March 26? We expect that to be 75 basis points. So this isn't an acceleration. And over the medium to long term, we expect the fee to continue at the one to two basis points that we've stayed on for a while now. But for the full year, we're expecting 75 basis points to be the number. Now, as I've explained before, there are three key lines of profitability to the business. Core operating profits is net management fee revenue, less all direct costs. And a core operating profit number was roughly 25 million. and I'll spend a bit of time explaining why, but really two key factors. One is the fee yield compression that I just talked to, and the other is doing a little bit more on operating costs, which I'll cover when we get to the cost slide. Core operating profit margin, 29% for the first half. As the average AUM increases over the second half of the year and rises for the full financial year, Or as being equal, we expect core operating profit margin for the full year to be around 30%, 31%. So climbing back to where it was last year. The other line of profitability that we have for the business is a number of our underlying funds do carry performance fees. So we have a line that is performance fee profits, which is performance fee related revenues minus staff interests. It is no unusual for that line to be nil at the end of the interim period because performance fees crystallize at the end of December each year, and therefore performance fee profits are a line and revenue that is effectively earned over the second half of each financial year. We signaled in early October with our Q2 release that performance And where we stand today, that number still holds. We've done a little bit more through October and lost a little bit in early November. But the 15 million that we signalled at the start of October is still the number currently accrued. but obviously performance fees are not crystallized until the end of December. And with just over a month and a bit to go, the final figure for that line would be released early January 26th when we come out with our Q3 release. The final amount of profitability is other income, and that includes a component of back interest income, which is fairly flat year on year. But the bigger component is market to market gains and losses sometimes on our seed portfolio, net of hedging costs. And that's where we've done four odd million through the first six months of this financial year. No exceptional items this year in that looking at the chart on the right hand side, that is the spike under the exceptional items, because when you compare period on period movements in profitability, there were six million of impairment related write downs last year, no exceptional But putting everything together, adjusted, diluted, total EPS of 21.9p. And the dividend, as Ian explained, the board has maintained the first interim dividend at 14p, reflecting the confidence of the business and the strength of the balance sheet. Moving on to the next slide, we'll take a look at the cost base in slightly more detail. And as we've explained before, we try and manage the cost base over the long term and try and manage it sensibly. So starting with total operating and finance costs, they were down period-on-period 6%. A big component of that decrease was the fact that we had exceptional items last year, the impairment charges that I referred to, no exceptional items. period on period. And unpacking that that actually the current six month period includes the full cost of the international small company team that arrived over the second half of last year. So those comparative numbers are not in the comparative period there. We're obviously also carrying higher NIC costs given the changes announced recently. So in effect, 2% increase period on period is a fairly well managed increase to the overall compensation line we feel. So the bit that we have done slightly more is other operating costs. And that I will come on to on the next slide, Hannah, if you move on to the next slide. And these are the non-compensation, other operating costs. And again, these are fairly tightly controlled over the long term. One million increase period on period, not significant given the overall mix of costs. A third of that one million reflects the interest. increases and reflects an outsourced move to internal audit services there. And the remainder of the increase, 50% of that reflects a continued investment in digital content and US marketing, which are really key in terms of growing the business over the short to medium term. So therefore, really important to continue investing in that. So that covers the P&L, and then moving on, we take a quick look at the balance sheet over the next two slides, please, Emma. First of all, cash and seed investments, roughly 121 million combined. We joined on the strategic screening program as I flagged before, which is really the R&D side of the business, and we were supporting eight funds. As I flagged before, we do look to protect shareholders' funds hedge market risk wherever possible. So eight funds seeded and maintained at the end of that first interim period. The next slide shows a different view of that balance sheet strength, and it sort of looks at our regulatory capital requirement. And if you please move on to the next slide for me. So we take a look on that slide. That's regulatory capital, which is period on period and the surplus capital 74 million over that regulatory requirement of 26 million. So a healthy and comfortable position to be in. The framework for our use of capital, as I've explained before, four key components to our thinking. We will continue to see new product ideas, both as extension ideas of existing teams. And whenever we look to take on new teams and launch new products for them, that R&D side of the business will continue to absorb some capital as needed. We will continue to return and to underpin confidence in the business. And we will continue to look opportunistically using the EBT to dampen the dilutive impact of share incentive plans by buying into the EBT as and when. So the mix of those four key areas of use of capital will change over time as the business grows and continues to mature. And we will look at other avenues are needed. And that probably takes me on to that final piece. And I'm moving on to that final slide in terms of talking about the dividends. That slide really captures what's come before, but to signal that the first interim dividend announced of 14p at the half year mark represents a payout ratio of 77% of adjusted core earnings. And effectively, as we look out to the end of the full financial year, really we know that we have a good contribution coming We will know the final quantum in early January and therefore we expect to be in a position where earnings for this financial year are covered and that provide cover over that dividend. And that is a first order of priority as we think about dividends going forwards. So achieve and maintain good line of visibility of earnings cover and then look at other avenues of dividends anything to that mix. So in terms of summarising the financial position, really higher average AUM of 25 billion as a starting point, as Ian flagged, absolute AUM of roughly 28 billion early November going into that second half of the year, provides a good underpin to core earnings, good contribution coming through from performance fees, hopefully over the second half of the financial year, and that struck that security to ride through market cycles. So the financials of the business are in a good place and set us up nicely to think about the outlook and carry on that conversation with Ian.

Thank you, Samir. So in terms of outlook, moving to slide 23, please, Hannah. I saw this talk about three of our key strategies where we've seen a resurgence in outperformance over the reporting period and rising investor interest and demand, early inflows. Firstly, global technology. As you can see on the chart here, as at the end of September, the fund had returned 42.2%, went ahead of its benchmark. And that momentum has continued since the end of the reporting period. And that team is now currently almost 25% ahead of benchmark. And that's really been based on them maintaining a very high conviction AI-centric stance in the portfolio. We believe we're at the end of the beginning of a multi-year cycle. Leadership is browning beyond the Mag7, as you would have seen, so we strongly believe that now is when you need a more selective, active approach in the technology space. There are pockets of exuberance and investor We see that daily almost in the press. But we don't see classic bubble signs. We do expect volatility and we do expect drawdowns. But overall, we remain very constructive and we're focused on earnings and cash flow backed winners in that sector. Similarly in healthcare, I mean, there have been several overhangs that have weighed on the sector since November last year. But in our view, all but drug pricing have largely cleared now and there's tangible progress on drug pricing. So after a sharp drop in sentiment, investors are reassessing valuations and fundamentals. As I said, we are seeing rising interest and early inflows. So we're going from a position of net outflows during the reporting period to net inflows in the current quarter, which all is well. Then we went on to smart energy. Having been, I think, in the barren for some months, 12 months, interesting alternative energy is returning as AI systems scale and energy requirements rise dramatically. I think with hyperscale, the capex high, and on-site power adoption rising, we see a multi-year power infrastructure cycle. The team's performed strongly this year, as you can see on the chart, up 34% year-to-date. Just as a reminder, the team joined us in September 2021, so four years ago, from Rubico. Highly experienced team led by Timo Lang, and he is one of the most experienced investors in the sector. So we're very constructive on the fund's themes and optimistic about the long-term potential within that portfolio. To go on to the final slide, please, Hannah, just to summarise, the leadership transition has completed seamlessly. I'm delighted to be in the position as CEO and to deliver a strong set of solid set of results. We've closed the half, as Samir said, at record AUM of 26.7 billion AUM, and that's continued to rise. We're maintaining the dividend at 14p. And as an active interest in active management returns, we are seeing that rising level of engagement and a strengthening pipeline for potential inflows. In the mid-term, though, I should re-emphasise that we do have low visibility on potential outflows, and that's a headwind faced by the entire industry. But our plan is very clear. We're going to scale where we're strongest today. plan targeted fixes where needed and diversify selectively and leverage our distribution. So the environment is unpredictable. Our focus should be and remains on converting those healthy gross demand for our funds across the piece into durable net inflows. So I think we're well positioned to scale through differentiation and to deliver long-term value for both our clients and for our shareholders. So thank you very much for joining us. Thank you for your time and happy to take any questions.

Thank you both for that helpful presentation. So yes, over to Q&A. How safe is the dividend in the next few years?

That's a good question. I suppose I will answer that by saying we are just coming out of a period of the last so uncovered by roughly 2p each of the last two financial years. Most of you will have heard me say before, as an indication, every 1p of dividend that is declared and paid is roughly a million pounds of cash outlay. So that gives you some sort of sense of balance sheet strength and what we would need to do if we were to look to maintain the dividend at any point in time. And ultimately, we recognize that the dividend is an important source of returns for a number of our shareholders. A number of them are, that dividend is very, very important. So in summary, it's four of our minds, whenever the board sit down and think about the dividend payout for any given financial year. And that is why having that balance sheet strength is handy during tough periods where we can look to use to support it. And we've shown the ability and the intention to use that balance sheet to support the dividend if needed, as long as the numbers work. So if that provides comfort, actually, we have the ability to do it. We have the intention and we have the history to do it.

Sorry Hannah.

Thank you. Can you elaborate on the low visibility for outflows and why that's a headwind for the entire industry?

I think it is. Going back to that chart, Hannah, where we showed outflows, particularly in active equity for seven of the last eight years, that's been a significant headwind. And I think that looks to be tracking in a very similar way this year. So those headwinds don't seem to have abated. So I think it's that macro uncertainty that You can't have that visibility on flows or potential redemptions, but I do think we're in a strong position because we are a niche provider. We have differentiated thematic strategies. We're seeing that demand coming back slowly. Where the greatest pressures are, are in, I think, regional strategies, where we're competing much more strongly with passive providers alternatives, cheaper passive alternatives. But in terms of building long-term robust net flows, we have to deliver on performance.

Are you seeing a drop in interest in the AI portfolio with recent strong contrarian views?

Great question. It's bifurcated. I mentioned the inflows being more acute in the UK. I think that's symptomatic of budget uncertainty. So we have, as your clients may know, we have two core flagship funds in our technology team. One is an open-ended USITS and the other is a closed-ended investment trust. They're a similar size. The investment trust faces the UK market. The open-ended fund we sell globally. interestingly the open-ended fund has gone from net outflow in q1 of the reporting period to net inflow in q2 and that demand has been coming from european and asian clients interestingly we have been consistently buying back stock in the investment trust which i think is reflective of the greater caution amongst uk investors But, you know, we're being very clear with all of our existing clients and prospective clients saying we are constructive. We don't see classic signs of a bubble. Yes, expect volatility. But we think this is the beginning of a multi-year AI cycle. But we acknowledge that fuels are vibrating at this point.

They certainly are. Well, perhaps picking up on that point you made there around, more outflows in the UK, and you said repeatedly in your statement about the opportunity that you see ahead in the US. Yes. Can you talk a little bit more about how you're going to evolve your distribution strategy and what the potential is for, how meaningful is a step change in the US?

Yes, thank you, Hannah. If we look at our current international client exposure, as I said at the beginning, it's close to 40%. Now, 30% of that is continental European investors. About 6% is Asian. And only just shy of 2% is represented by US investors currently. But it's the largest market globally by a magnitude. So my opportunity is very clear. The challenge for us, we've been building our distribution team there for five years now. So we have a specialist, highly experienced team of five. But the challenge has been the product that we've been selling into the US, international smaller company, globally emerging markets, up until very recently, the demand for overseas equity has been very muted. Now, investors, US investors have been very focused on their domestic market, equity market, and why wouldn't they be? You know, the returns have been so strong relative to the rest of the world. I think the change of policy in the US, weakening dollar, U.S. investors are finally looking beyond their own shores, and that plays to the product set that we are selling into that market. So I'll give you an anecdote. I was at a conference in the U.S. in March 2024, and they asked, they pointed to the investor audience, what percentage of, or where are we going to be putting client money from an equity perspective in the next 12 months? 100% was U.S. equity. Same conference in March this year, pretty much the same audience, same poll, 52% international equity. So a real change in sentiment. We've not yet seen that sentiment turn into net fund flows, but the engagement is rising, which is very encouraging.

Brilliant. Thank you. What is your exposure to crypto-focused shares directly or indirectly?

Thank you.

Are there any trends in the commissions and fees payable that you can share with us? Commissions and fees that you are currently paying?

I assume that's a reference to the line on the P&L. The relationship as a percentage of those commissions and fees payable, which are effectively rebates in all money, are consistent with the revenue line period on period. So the important number to look at and flag is what is the net management fee yield, which is a 75 basis points for the six months. And as I said during the presentation, we expect that to be the number for the full financial year ending March 26. And going forward, we expect the contraction to be no more than one to two basis points if we execute well and manage things well over the medium term. Obviously, there will be periods such as the one that we've just seen where we do a little bit more. But equally, there might be periods where actually that compression is lower because of the product mix changes.

Okay. Continuing on that theme, so you removed performance fees from the UK value opportunities funds. Are you committed to maintaining performance fees on other strategies?

Yeah, I think the UK was quite specific. We are keen to – we have to acknowledge the market pressures, the specific market pressures, and they've been particularly acute in the UK. equity, and we want to maintain, you know, competitiveness for existing clients as well as prospective new clients. So that was behind the decision to remove that from the UK Value Fund. But where we have specialist strategies that are genuinely capacity constrained, we will maintain those performance fees.

Okay, thank you. you've touched on the US and the opportunities there, but you also mentioned Asia in your statement. So can you talk a little bit more about which strategies clients are looking at in that region?

You know, the demand we're seeing in Asia actually is for growth strategies and for thematic specifically. So we've had presence on the ground in Asia now since the end of 2022. Yeah. And Initially, our client base there was our global client base. So it was the global financial institutions that you'd be familiar with, the UBSs, the JP Morgans. And that business has built over time to encompass and include some of the regional banks, specifically in Singapore and Hong Kong. But yeah, the development we see is just very aligned with our product set, which has enabled us to grow up to 6%, 7% of our assets now from that region.

Okay, thank you. Share buybacks. Obviously, it's a successful strategy utilised by your investment trusts when trading at a discount. At what point does Polo consider it alongside in preference to dividends?

We are very much of the view that actually, when we look at what's happening in the UK landscape, they are becoming more of a feature in terms of returns to shareholders and actually there's absolutely a place for them. coming out of two years of a slightly, albeit slightly, uncovered dividend, which we felt we sort of managed the situation well. As a board, the first order of priority is build earnings cover back on the dividend. And then as this year, is there something interesting that we can do and add a buyback component? And how meaningful can we make that? And what are the right parameters? Because ultimately you need to make sure that you are delivering value for shareholders. Every price point is at the right price point, but arguably the shares are undervalued at this moment in time. So I think there is a place for them, but the first priority is build earnings cover back in, and then look to see whether we can introduce buybacks in a sensible fashion.

Thank you. A follow-up on redemptions, I think. Is there an opportunity to move more of your AUM into investment trusts, protecting you from USIT's net redemption risk?

That's a great question, Hannah. It's not mine. Well, I think, although many people are aware, and pressure in the last 12, 18 months with, you know, the likes of Sava and other activist investors coming in. And I think that's focused, it's definitely focused, the sector is focused, the minds of boards. We've seen the number of investment trusts drop in the last 12 months, but we remain very much committed to the sector. And yes, I think we can grow, Three things I think you need in the investment trust sector. You need a relevant investment strategy mandate. You need performance always. And you need scale. And if I look at our technology trust, that's nearly 6 billion sterling AUM, puts you on 100 company. It has one three of those things. Our two other investment trusts in healthcare and financials have two out of the three, because arguably we would like them to be bigger, over 500 million is the minimum. We're actively looking where we can, if there are opportunities to scale those, whether it's through share issuance or looking at other vehicles that we could potentially merge with. There's been a recent corporate action for the BBH Healthcare Trust. We participated in that pitch. We weren't successful on this occasion, but we're very open to those opportunities and we'll pursue those opportunities where they're appropriate.

okay and then another follow-up um how does the net fee yield on investment trust compare to open-ended and then obviously how that impacts your appetite to pursue both of course so remember again that by far as ian's explained the largest

on the trust combined is bang in line with effectively our overall fee margin. So they're not too dissimilar.

Okay, thank you. Do you have investment in any military equipment, particularly drones or anti-drone defence companies? And if so, which strategies would they occur in?

So no overt sort of sub-strategies within our product range. And again, last recent years not that long ago again defense spending was um was not really very acceptable again if there is some indirect um linkage um they uh are not close to the details of the underlying tech portfolio but there may be some exposure there but it is not significant enough um to pop up um uh on the largest holdings etc so it is not an overt sleeve of the overall tech view

Thank you. Circling back on to AI, if you see that bifurcation of views that you mentioned, are there other opportunities for additional, more focused strategies within tech?

I think we will always look at those. I think thematic investing is here to stay. The demand is clearly there, but demand for underlying themes is cyclical. And I think the more specialist you go, the more cyclical that demand can become. So when we think about what we could do, extension strategies in tech, What is that cyclicality? What is the demand? That's my earlier point. It's critical that there's a strong investment case. What we don't want to do is to launch a strategy because we're top of a cycle and we can raise a billion dollars. there's an investment case and that we can make investors money. I mean, one which I think we are, have talked about, are talking about is cyber security. It's front and centre of everyone's mind, every business's mind. That's probably the number one risk. But beyond that, I think it very much is driven by the investment case.

Thank you. Given the demand for and performance of Polar's Asian growth strategies, is this a sector that could potentially tick the three boxes for an investment trust strategy?

Essentially, yes, I think. The challenge with investment trusts, there have been, I'm not sure I can even name a successful IPO in recent times. And what you need to be sure, again, is is there sufficient investor demand? Because I don't think we want to launch a new investment trust with less than 500 million sterling because you need that liquidity, particularly for the private wealth channel, the consolidation there, the growth there. So, yes, you are confident that you can raise at least that in capital. I don't think it's something we want to do.

Well, that is it from questions from our audience today. So that just leaves me to say thank you to them for attending. Thank you to you both for your time and presenting today and the rest of the roadshow. And we look forward to hearing an update in six months time.

Thank you. Thank you. And thank you to everyone for your continued support and questions.

Yes. Thank you.