Schroders plc

Good morning, everyone. It's great to see so many familiar faces at our Annual Results 2025. Thanks for investing your time with us this morning. Not really a normal Annual Results presentation, but importantly, I hope you have all read the results that we put out, because I am really proud of the amazing results that we delivered for the first year of a three-year transformation program. We've shown we can do what we told you we would do and deliver against the plan. And we've got conviction in what we're doing. You know, it's been pleasing to see the momentum that we can see in our building being reflected in our share price. So thank you, everyone, for buying the shares and driving them up 12% so far this year. But I think that's a real reinforcement that actually the business is coming from a position of strength. But of course, you've also seen the quite seismic news of the announcement this morning in relation to the all cash offer by Naveen. But let's start off by talking about what that really means for our shareholders. So the Schroders board unanimously is recommending the offer to shareholders. And after a series of approaches by Naveen, we've reached a point where the terms being offered up to £6.12p in cash and dividends represents attractive and importantly certain value for shareholders. This reflects the combined acceleration in the value that we would otherwise have delivered from the trend trailer. Transformation plan, that was what I was thinking about. Transformation plan is a standalone company as we execute on that strategy. But importantly, it also reflects that the benefits that we expect to get from this combination with Naveen over the longer term. The terms, of course, are comprised of 590p in cash considerations and up to 22p in permitted dividends considerations. And that implies a really attractive multiple on earnings of 17 times the 2025 fully diluted adjusted operating EPS. Now, the companies, the other companies who have done transactions, this compares really favorably. And the premium is 34% above yesterday's closing share price of £4.56, 47% over the last three months VWAP, and 61% over the 12-month VWAP. So it might be compelling for shareholders, but I also wanted to explain why I think this is an exciting opportunity for Schroders. It accelerates our plans for this group and it passes the three tests that I hope I've been consistent with you on since I've been CEO. It's good for our clients. It's good for our people. And as I outlined, it's really good for our shareholders. Now, while I'm sure you're all focused on the deal, I am going to dive into the detail in more of a second. I want to spend some time after that on the results. And that's because they're an important context to the announcement that we made this morning. But going back to the deal, Naveen is a scaled international asset manager with over a trillion pounds of assets under management and operations in 26 countries with deep expertise in a range of public to private investments. TIAA, Naveen's parent, is the sixth largest insurer in the US, providing secure retirements to millions of people and thousands of institutions. So together with Schroders, the combined business will have assets in the management in excess of $1.8 trillion. So I want quickly to run through why this combination makes so much sense to us and why putting our two businesses together delivers more than either of us could do on our own. In my view, these really are two jigsaw pieces that fit together, not just in terms of industrial logic, but also in terms of culture and values. We're creating a global active asset and wealth management powerhouse, operating a comprehensive public to private platform with global reach and distribution. Nuveen's excellence in fixed income complements Schroeder's history in public markets, and importantly, we have a combined private markets capability of $307 billion, which will have growth supported by the patient capital provided by TIAA. Now, geographically, Nuveen's footprint is in the US and Middle East, and ours is in the UK, Europe, and Asia. Together, we actually create a business with a footprint that is very well matched to the global asset pools that we seek to serve. And we're evenly balanced across both institutional and wealth channels. And our own wealth business is going to benefit from being part of a group with a wider range of products and with an organization with such a strong US wealth platform. So our businesses both have strong heritages and really long histories, with Schroders, Naveen and TIA being founded in 1804, 1898 and 1918, respectively. When you put all of that together, we've all been around for a very long time. And thanks to the longstanding commitment of the Schroders family, we've always had the ability here to take a long-term view. And Naveen's history means they share that long-term thinking. We've got a strong commitment to investment performance, client service excellence, leadership in sustainability, and innovation. Now, shared values are important because they're the things that make families work. And those shared values are why I'm absolutely convinced this combination is going to work. And as part of the offer, Naveen has made several important commitments to our brand, our people, and importantly, the UK. So during this year, we retained our place as the fifth most recognized brand in asset management globally. I'm really proud of that given the amount of change that we've put through the business. There's clearly a very strong intention in this offer to retain the brand reflecting its value, its heritage, and the history. Together, the combined organization has a really important role to play here in the U.K., and will remain committed to being a critical provider of long-term capital into the UK economy. London is going to be the non-US headquarters of the combined business, and the opportunities for our people will be enhanced by being part of a larger, more global organisation. Nuveen intends to maintain Schroeder's existing investment and client teams across both asset and wealth management, and that's right the way across the world. And that's going to enable clients to benefit from continuity and best-in-class client service. So this combination has clear and compelling strategic rationale. It's going to provide scale. not really just for scale's sake, but with resources that come with a 1.8 trillion asset manager, we can invest in those areas that are really important to our future. So AI, broader technology, data. And the combined business has true global reach being in more than 40 markets globally. And it's a business that has exceptional capabilities with a 1.3 trillion in public markets and I said 307 billion pounds in private markets. And that's supported by a triple A rated insurance parent company that has a 239 billion general account. So members of the principal shareholder group have provided an irrevocable undertaking regarding the acquisition and the details of that you can all read in the 2.7. And from here, the transaction is subject to the normal conditions you'd expect of regulatory and legal approvals. And we expect the deal to complete in the fourth quarter of this year. Now, no doubt you will have questions for me. I'm very glad I've got my general counsel in the front of me, so he'll tell me I can only respond to things that are in the 2.7, but I'm very happy to take those questions. But before I do that, I'm going to turn to our 2025 results. As we've done a trading update recently, I think you all had the punchlines before we came in here. But with operating profit up 25%, it's pretty clear that we've had a really strong year and our strategic progress is reflected in these financials. But rather than just focusing on the numbers, I'm going to tell you the three things that I take away and I'm proud of when I think about what the management team here have done with all of our employees in 2025. The first thing, we got our assets back into growth. AUM reached a record high of $824 billion. That's up 6%. Now, of course, that growth is partly driven by markets and investment performance, but it also reflects really strong positive flows that we generated. Growth inflows were actually up 9% to $142 billion, resulting in $11.2 billion of net inflows. And I'm really proud of all of our investors because they have delivered excellent investment performance with over 70% of our assets outperforming over one, three, and five years. And thirdly, we have significantly improved our operating leverage. We're delivering on our cost savings early, making 75 million of our in-year savings, that's net of reinvestments, just in year one. This together with the strong growth we saw this year has enabled the business to increase EPS by 29%. It's a great start. But look, I also know there's a lot more that needs to happen to deliver growth on a sustainable basis. So I mentioned client investment performance, and the last time you saw a chart like this, by the way, was at the end of 2021. In an unpredictable and volatile environment, I cannot think of a better advertisement as to why active matters in this chart. And importantly, in a year where we have delivered real change in our business, I hope it shows that we've been absolutely focused on what is most important, our investment franchise, driving performance so that we can deliver the standards that our clients demand. So on to net new business. So we focus this year on strengthening client relationships and our engagement has actually increased by 30%. And that's translated directly into both growth and net flows. So if we start in public markets, Our nine leading capabilities generated 8.1 billion of net new inflows. We saw strongest demand in global equities, credit, and in core solutions. And these were partially offset by outflows that we saw in regional equity strategies and Asian bonds. And that resulted in that net 3.7 billion of net new business. So you showed us capital. Net new business was actually 4.1 billion, plus we had a half a billion for the first contribution from future growth capital, which you see coming through the joint ventures line. We had positive flows across all of the pillars except real estate, where we were broadly flat. In wealth management, our inflows were 3.4 billion, with a good performance from the UK private wealth clients, and I'll come back in a little while to unpick that. And in joint ventures, we saw an outflow of $5 billion, and that was principally driven by our Chinese joint venture fund management company. So let's just spend a bit of time, because it's important to understand the dynamics of the business, on how the dynamics on region and channel turned out. So if you look on this left-hand chart, you can see the improvement in our intermediary flows. They're up actually from less than $3 billion in 2024 to more than $4.5 billion in 2025. And that really picked up in the fourth quarter when we saw the strongest intermediary flows that we've actually seen since the beginning of 2021. And that gives us a good tailwind as we go into 2026. That improvement was predominantly driven in EMEA and in Asia Pacific, which are typically higher margin regions for us. Now, I'm really delighted, actually, by the Asia performance, where our focus and renewed leadership has completely changed the momentum in the business. And in EMEA, this is a brilliant example, client meeting activity actually increased by 40%. And that helped drive an additional $6 billion of gross sales last year. And that gave a $9.2 billion of net inflows. Now, if that to me is a very clear illustration of how deeper client engagement is, it directly drives momentum, commercial momentum in our business. And on the institutional side, net new business was up across all of the regions. We saw the strongest improvement in the UK. The $4.5 billion includes a large OCIO mandate win from E.ON and the St. James Place win from the first half. And that actually is still net of $7 billion of outflows that we experienced from Scottish Widows. In EMEA, the $3.5 billion of net flows included the Sustainable Equity Solutions mandate we told you about from PGGM. So we're one year into our three year programme to return to organic earnings growth. Now, you are very familiar with this slide and the targets. So I'm just going to quickly run through progress. So on public markets, our priority was really clear to stabilise revenues. We anticipated revenues would come down before we got them back up to the 2024 levels. But of course, I'm really pleased to say that actually we grew operating revenue by 5%. Of course, markets played their part, but this result is actually really driven by that return to organic growth. And it's also partly because the resources, the focus, and the commitment that we put behind those nine leading capabilities we talked about last March. And in Schroeder's Capital, where we said net new business would accelerate as we go through our three-year plan, Look, our net new business performance in 2025 was a little softer than we would have liked, but we have successfully delivered on our commitment to have a team of 40 specialty salespeople who are going to drive the demand and, sorry, drive increased momentum in fundraising as we go through 26 and 27. Now, in wealth, net new business run rate was at 2.7% below our target, so let's unpack that a little bit. As I mentioned earlier, I'm really pleased that our UK private client business has performed really strongly. And it was running at a 5.2% growth rate. That was within our target range. However, TotalNet new business was impacted by other aspects of the portfolio. So while our charities team actually saw increased gross inflows, we told you in the third quarter that they were also experiencing drawdowns on reserve portfolios as charities adjusted to a difficult fundraising environment. We also, in the fourth quarter, unusually saw some low margin outflows that offset the strength of those gross sales. Pleasingly, that charity's team, they're a brilliant team, actually maintained market share in excess of 14%. While in benchmark, where macro and policy uncertainties probably most felt, the net new business rate actually dropped to 2.9%, and we also saw some outflows in our international business. But if you take all of that together, what you've seen is a 6% growth in the top line with our control of costs really delivering that increase in adjusted operating earnings per share of 29%. But I'm going to quickly run through the milestones that drove that performance. And you've seen this slide from the half year and I'm not therefore going to repeat all the things we've shown you before about how we are simplifying, how we are scaling and how we're delivering against the commitments we gave you. But what I do hope you're taking away is that we haven't slowed down and we have kept the pace to change a momentum through this second half. So in July, we said that we need to simplify the business and that requires some tough and disciplined choices. Since then, we've announced the exit from two more markets. We are carefully transitioning our businesses in Brazil and Indonesia to local partners, and that allows us to redeploy capital, both financial and, frankly, management time, into areas where we can deliver better long-term strategic outcomes. And we've also been thoughtful about how we reshape some really important parts of our portfolio. We've strengthened our wealth business by taking full control of Casanova Capital in exchange for our stake in Schroeder's personal wealth. We're also, as part of that deal, going to continue to manage the SBW assets, Scottish Widows assets, and importantly, keep referrals coming into Casanova Capital. And we're scaling our investment capabilities by increasing access, as well as launching new strategies where client demand is pretty clear. Take the launch of our active ETFs in Europe. In four months, we are now in excess of US$1 billion of active USITS ETF assets. And look, we have got more launches to come in 2026. We're also driving innovation, particularly in evergreen products, where we've got a great leading position, whether that's our recently announced partnership with Apollo or our LTAS that we launched in collaboration with Hargreaves Lansdowne for a wider audience of investors. Finally, a central feature of positioning the group for future growth has been reinvesting in the people and capabilities that actually make it all happen. we continue to attract great talent to Schroders. With 15% of our leadership teams now being new to our business in the last year, a further 26% are internal promotions into new roles. So we have more than 40% of our leadership teams are brand new in role, and these appointments have strengthened our ability to deliver across the group. And throughout all of that, we've been focused on maintaining a really strong culture and remaining the home of exceptional talent. So the statistic I am definitely most proud of is that we've retained over 95% of employees who received our highest performance rating this year. So when you take a step all the way back The work we've done in 2025 has shown good progress in creating a simpler, more focused, and a better positioned business. We've seen a fast start delivering on what we committed to, and I'm really pleased with the progress, albeit I know we've got more to do when we look at Trello's capital and wealth management. But with that, Megan, why don't you unpack the numbers in a bit more detail?

Thank you, Richard, and good morning, everyone. When I spoke to you last year, I set out three priorities, improving the transparency in our financial reporting, tightening our cost control, and improving on our capital discipline so we could deliver change at scale. And I'm really pleased to share the results and the focus of how that's coming through the numbers today. So let's start with the numbers. Starting with income. Our adjusted operating income was up 6%, driven primarily by markets, mix, and strong investment performance, which together delivered $146 million. This was partially offset by FX, particularly the weaker U.S. dollar, which reduced our net operating income by $28 million. The net new business was slightly negative, largely reflecting the headwinds for 2024 and the timing of this year's inflows. Our annualized net new revenue for the year was positive, weighted towards the end of the year, providing good momentum as we enter 2026. Our performance fees and net carried interest came in higher than expected and increased by $16 million. And finally, gains on seed and co-investment were up 14 million, a reflection of the improved market conditions. So overall, this bridge reflects a strong underlying performance. Now let me talk you through the performance of our operating segments, starting with asset management, which performed particularly well. On the top chart, you can see that the net operating revenue of the segment increased 4%. That was partially supported by markets and investment performance, but we also benefited from positive next shift towards the end of the year. On the bottom left, you can see that as markets improved, outflows moderated, and equities increased as a proportion of the total assets by 1.5%. Given equities are a higher margin business, that had a positive impact on our management fees. Now turning to annualized net new revenue on the right, This is a really important metric for us, as it assesses the true commercial value of our business, in a business where both margins and scale dynamics are good indicators of sustainable, profitable growth. So during the year, we saw really encouraging improvement in our public markets. This was driven by a stronger demand from the intermediary channel, and particularly in the fourth quarter. In Schroeder's capital, the annualized net new revenue was slightly lower, and this reflects the lower net sales over the year. However, if we look at asset management as a whole, you can see a clear shift in momentum. We moved from minus 46 million in 2024 to a positive 15 million in 2025. So while this momentum is encouraging, we know we can't be complacent. So turning to public markets. The net operating revenues were up 5% year-on-year, driven by markets and investment performance. In total, public markets' net new business shifted from negative $21 billion last year to $3.7 billion this year. And in terms of margins, the equity margin was up one basis point as we continued to see the rotation from regional to global products. Equity margins for the year exited at 44 basis points. In fixed income, we were broadly flat. The intermediary channel was strong, but this was offset by the loss of some low-margin mandates. The increase in the intermediary flows also contributed to the improvement in net operating margins, from an exit rate of 33 basis points at the half-year to 36 at the year-end. For multi-asset, net outflows reduced through the year, reflecting the absence of the several large mandate losses we'd seen in 2024. There was a reduction in the December exit rates as a result of the transfer of the lower margin assets we continue to manage on behalf of SPW. Now, up until the sale of that business, those assets were included in our wealth management segment. And finally, core solutions had another strong year in net flows. But as you know, this is lumpy and lower margin business. So our best guidance for margins continues to be the exit rates that you can see on the table on the bottom right. Moving on to Schroders Capital. The net operating revenue was up 3% for the year, a modest improvement. On the bottom left, you can see that the gross fundraising for the year was at $10.9 billion, flat on the prior year, and the equivalent of 16% on our opening AUM. The margin at the end of the year was 57 basis points, which is one basis point higher than the half year. And that improvement reflects a favorable mix shift, where we saw in the second half of the year flows into our private equity business, which has higher margin. And finally, fee-earning dry powder increased by $0.7 billion to $4.9 billion. Now, while this gives us flexibility, it also underlines the importance of accelerating deployment and improving the conversion of our fundraising to net new business, as we want to scale this business further. Now moving on to wealth. As Richard has already said, this was a tougher year for our wealth management business in terms of net new business growth. That said, the business continues to deliver and remains highly accretive to the group. The net operating revenue was up 10% and adjusted operating revenue 12%, with a three-year CAGR of 15%. This really demonstrates the strength of the underlying franchise. You can see an improvement in the exit margins this year. It's really driven by two factors. Firstly, the transfer of the lower margin SPW assets into public markets that I just mentioned. And secondly, because of the lower margin outflows from our charities business, which Richard just mentioned. So overall, while the year was more challenging from a flow perspective, wealth management continues to deliver strong profitability, improving margins and attractive returns for the group. Moving on to operating expenses. Now, our adjusted operating expenses were flat year on year, but there are several moving parts that deserve a mention. Firstly, our gross transformational savings for the year was 94 million. This was offset by 19 million that we reinvested back into growth. Inflation, FX, and AUM-related items increased the base by 54 million. And finally, unanticipated building repairs in our non-compensation pushed that up by 20 million. Now let me unpack our cost-to-income ratio. This is a key metric for us. The bridge here shows you how we're using a combination of cost control, transformation, and revenue growth to build operating leverage, which will enable us to grow profitably. We set out actions at the start of the year, which would take 1% out of the cost-to-income ratio. Further management actions to accelerate our transformation drove even greater improvement, and the favorable market conditions enabled us to generate higher revenue, which also supported an improvement in the ratio. Some of this gets used to reward our people through a higher variable compensation. But the net result, due to the measures we have taken to improve operating leverage, means that the majority dropped to the bottom line, and we ended with a 71% ratio. So hopefully this is clear on how we're improving the operating leverage in our business. There will be upside in times of favourable market conditions, and of course, the reverse during times of falling markets. So for 2026, we expect further reduction in the ratio as we head towards 70%, as we continue to focus on the transformation savings and cost control, and this is subject to normal market conditions. Now, as you know, our target remains below 70% for the full year 2027. Now moving on to capital. Our capital surplus at the end of the year was 865 million. This after allowing for the effect of an estimate of 250 million for the impact of Basel 3.1. Now we are in discussions with the PRA on how the specifics of these requirements will impact us, but this is our best estimate today of a full implementation based on our current balance sheet position. We'll continue to allocate surplus capital in line with our guidance on our capital management framework that I outlined last year. Now finally, given its importance to this year's outcome and to our targets, let me take a moment on transformation. We were clear that this was a program that was not about blunt cost out. It was about reshaping the operating model, reducing cost and complexity with precision, and building a sustainable operating leverage for our business. So in 2025, we accelerated our delivery and outperformed our targets, delivering 75 million of in-year savings and around 100 million annualized of our net savings target. Our decisions to redesign our outsourcing contract approach, accelerate service model changes across client service, operations, and technology meant these savings materialized earlier. Together, these all contributed to a headcount reduction of 10%. Now, alongside this, we delivered non-compensation savings across research, data, and global technology. We focused on supplier rationalization, which meant we reduced our supplier base by 12% year on year. So what next? The focus now shifts from accelerating cost savings to disciplined execution of transformation for modernisation and growth. In terms of saving, we're targeting $25 million reduction out of our operating expenses net of investments. And while this seems lower than the $75 million in the plan this year, the plan was always to deliver the initial targets with efficiency up front, and the harder transition of new operating models, technology platform implementations, take longer to implement. So overall, transformation in 2026 is about building progress on what we've done in 2025, embedding the cost discipline, and delivering our next savings target while investing for growth. This will ensure that we exit the year with a full line of sight of achieving our $150 million net annualized saving by 2027. So looking forward, we're only one year into our transformation program, and I'm really pleased with where we've ended. Ultimately, we're here with one purpose, to be the best active manager for our clients. So to do that, we are going to continue to do exactly what we said we would. and we will be laser-focused on delivery. So what does that mean in terms of actions for 2026, aside from the transaction? We will be activating our sales teams that we've built in Traders Capital to turn client engagement into sustained net new business delivery. We'll continue to innovate, expanding on our ETF suite across Europe this year, and in wealth, we're investing in technology and our people to ensure that that business can deliver to its full potential. What happens to markets and FX and geopolitics? Out of our control. But what we can control is we will continue to deliver against our strategic plans. So in summary, great progress this year, which has given us a strong platform to be able to increase the value and delivery to our shareholders. So with that, I'll ask Richard to return for some Q&A.

Thanks, Vegan. And look, what's really clear to me, I hope it's clear to you, that we're not taking our foot off the gas and we're absolutely focused on delivering the transformation plan that we outlined. But I just wanted to leave you with a thought on the transaction before we get to Q&A. Through the proposed transaction that you have seen with Naveen that we talked about this morning, we're going to significantly accelerate our growth plans to create the leading public to private platform. with enhanced geographic reach and, importantly, a strengthened balance sheet, while remaining relentlessly focused on what matters to our business, delivering strong, active investment returns for our clients. And look, given this audience, I can't underscore the importance that this transaction is going to deliver an attractive premium in cash to our shareholders, reflecting the value of the delivery of our strategy that we've outlined pretty clearly today and our future prospects together. It creates certainty and it creates value for shareholders. So with that, let's go over to you for Q&A. As usual, we'll start in the room. If you can start by telling us your name and where you're from, as usual, that'd be really helpful.

Hi, it's Isabel Hetrick from Autonomous Research. Thanks for taking my question. So I have two, please. First, you touched on the improving flow trends and momentum in the fourth quarter of last year. Can you provide us any colour if these have continued so far in 2026? And then second, you touched on the need to increase the pace of deployment and conversion of dry powder within Schroders Capital. What is needed here? Is it just a lack of attractive targets in the area, or do you need to deepen and maybe broaden your origination pipeline for teams? Thank you.

So, Isabel, I'm going to answer this question with a big caveat that we're on February 12th, and six weeks does not present a forecast for what might happen in the future. But, look, the positive momentum we saw in the fourth quarter was definitely carried into January. I also think on the Schroeder's capital point, we do need to increase the pace, and that is about how we, for example, in our private equity business, put more people into that business so that we can get more of our clients' money deployed. It's a great area, by the way, that I'm super proud of the team for taking AI and embedding it in their processes so they can get through more opportunities more quickly. But that's the sort of thing we need to do to accelerate deployment. Thank you for helping me out.

Hi, it's Hubert Lam from Bank of America. I have two questions, firstly on wealth management. I guess the last few days you've seen some sell-off across the asset management space, but also the wealth management space on fears around AI, the risk of disruption within wealth management. I'm just wondering what your thoughts of that are, how much you're investing in AI, how much are your wealth managers using AI, and how much you're spending within wealth management for AI tools?

Well, in a second I'll let Megan talk about the details on AI, but First of all, AI is going to transform everything, so not just wealth management. And the only people that seem to have not worked out it was going to impact wealth and asset management are the investors. So we've known that for a long time, and that's why over the last four years we have been active in deploying different technology solutions using AI. And by the way, what I've said internally is AI is the hammer. What we actually need to do is think about the blueprint of how we're – configuring the business. And we'll use lots of different tools, be that DLT, be that using data in different way and tokenization, be that AI. So I think we have been hard at that for a number of years. We are using it in how we show up to clients. We are using it in how we change operations. We are using it in how we think about research. We are using it in terms of how we think about portfolios and products that we can sell. So it doesn't matter whether it's wealth management or asset management. This industry is going to look super difficult. Sorry, not difficult, different going forward. It might get difficult as well, by the way, but it's going to be very different. But one of the reasons why we like this transaction so much is because it actually gives us a bigger balance sheet. It gives us more firepower to invest in this transformation as we go forward. Do you want to just touch on?

Yeah, I'll just add a bit of context. I think, firstly, you mentioned it in the context of wealth, and Oliver is with us in the room. And since the day he stepped into our business, he's been very front-footed in terms of and the benefits that can bring us. And if you look at it in our transformation program, a huge portion of that in the second two years is around really accelerating that wealth program, investing in modernization of our client interfaces, and making sure that we can leverage it. So as Richard says, it's a combination of AI, data, and DLT. We see the three coming together and absolutely transforming not only the wealth business, but how the business operates together.

In terms of investments, how much are you putting into technology, into AI specifically?

Well, we're not specifically only investing in AI. There's a huge portion of our remaining transformation cost that is associated with technology, the data platforms that underpin all that. So we have a remaining plan.

And the other question is around your partnership with Apollo. Maybe just talk a little bit about it in terms of expectations, like why Apollo, the products, I think you mentioned the products they are launching there, expectations in terms of employees.

So I think I've been pretty clear with people over the last year that actually partnering in this industry is important. You've seen lots of people into partnerships. It's important to us so that we can be innovative, we can fill capability gaps where we think there is a demand in the marketplace. What is exciting about this proposition is actually to see within the UK wealth channel whether we can create an interesting public to private credit product. And that's what we're pushing on further. Of course, we've also talked about the ability to launch some income retirement solutions for DC channels in the UK. So it's a good example of how we're using that partnership to try and drive innovation more broadly.

Good morning. It's David McCann from Deutsche Bank. A couple from me, please. So I think you touched on in the remarks that Naveen approached you more than once during this process. Can you touch on did others approach you? Was this the only person that was interested in the business? I guess that's the first question. Second one, to be clear on the comments on shareholder value that you made, if you had fully executed on the plans that you outlined a year ago, You think this deal represents more value for shareholders than you would have achieved normally? And the third one, you know, we've obviously seen a bit more detail in the numbers today than you gave us in the trading update a few weeks ago. Wouldn't you have been aware of the numbers that obviously quite a lot of the beat versus consensus at the time was from performance fees and carried interest? Were you sort of conscious of that when they made the ultimate offer? Thank you.

Well, let me answer the first one. Last one first, David. Naveen have not been party to the insider information on our financials at any point during this process. So they were not aware of our trading update or anything since then. I think that would have been inappropriate. I think it would be normal, by the way, that you'd expect a transaction of this nature there to be multiple conversations. That's how we get to what the best value price is for our shareholders. But I want to be really clear, David, this business has never been up for sale. We are confident in the plan that we discussed with the board. We were confident in our execution capability. We remain, by the way, pretty confident in our execution capability. So it's never been up for sale. What emerged as we had conversations with Naveen was that we felt this was a very complementary business that could accelerate our aspirations by candidly, I think, a decade. And that's why when we had the conversation, it became clear that we could create something pretty unique in the industry. And that's how we came to receiving an offer, I think, in the earlier part of this year. Any of the board... thought quite carefully about value through multiple lenses. Of course, the lenses that I talked about today, obviously, when we think about the premium to the earnings that we announced for 2025, whether it's relative to spot or whether it's relative to the VWAP, we've looked at all of those. And we also, as you would have expected, took the board through our five-year plans with a clear aim of demonstrating the value that we could create for shareholders. So I'm not going to take you through the details of that plan, but rest assured in the board making their unanimous recommendation, they concluded that this was the best option for all shareholders. And that's really how we've ended up here. And that's why I think you're going to get certainty, you're going to get cash, and you're going to get paid not just for the delivery of the plans that we've got, but actually for some of the upside that this transaction will undoubtedly give us through growth. Any other questions in the room? If not, we will go to online. No. Do we have any questions online?

Yes, we have one question online from Nick. Nick, you are now unmuted. Please state your name, your company, and who your question is directed to.

Yes, thanks, Katie. Hi, it's Nicholas Herman from Citi. Can you hear me all right?

Yeah, perfect, Nick.

Great. Morning. So firstly, I guess, congrats on us forming 2025. Clearly helped by markets, but also still very strong execution. And I'll probably say this, I'll be sorry to lose you as a listed company, but I can appreciate that this is also a very attractive deal for shareholders. Two questions from my side. First on asset management margins. You've given us the exit margins. Can I ask just for the public markets business, is there any difference in the exit margins to the margins on your inflows? And perhaps you could help us understand the difference there in the margins on your inflows versus the margins on your outflows there? Yeah. And then the second question was, sorry if I missed this before, my connection was a bit questionable, but you said that it allows you to accelerate your growth ambitions by a decade. Would you be able to flash that out a bit, please? Thank you.

Shall I comment on the last one and then come to you? A couple of reflections, Nick. I understand that people will be sorry to see Schroeder's shares not listed on the London Stock Exchange, but I think about this in a different way. Actually, our commitment to London is actually enhanced through this transaction. There's clearly a commitment about maintaining the headquarters here. There is clearly a commitment about our investment capabilities here and retaining jobs. Through this deal, we should be able to channel more money into the UK economy. We will continue to play, as we have done for the last 200 years, an important part bringing people to market and actually creating UK wealth So I actually think we are better as a result of this or create a better impact for London at the end of this because of our increased size and ability to influence the market. So whilst people may be sorry about the listing, I think our commitment to London is undiminished and we're excited about actually the increased growth delivering more and better outcomes. So if you think about what we've done, as I said, when you bring these two organisations together, you're really bringing together people Nuveen's really broad private markets capability, which has a very supportive parent that brings private capital and a US distribution. Now, here at Schroders, we don't have patient capital. We have a much smaller distribution capability in the US. We don't have some products that you would want in the total private market suite. But you're combining that with this phenomenal heritage here at Schroders of a public markets business with great distribution capabilities. across pretty much the rest of the world outside of the US. And we have amazing capabilities in discrete parts of private markets. So when you stick these two things together, what we do is create better products that we can actually put down all of the pipes to actually support our clients and make us relevant to them. So that's why this isn't about a cost. There aren't big cost savings in this deal. It's about growth because we can actually give more of our combined products to our respective clients. And that's the excitement. That's why this, I think, should be seen as a great opportunity for our people and our clients. It would have taken us a long time. for us to buy that capability in private markets, build that distribution capability in the U.S. And that's why I think it accelerates our plans that we had outlined last year by at least a decade. But maybe, Megan, you want to pick up on that?

Sure. Thanks, Nick. I'll pick up on the public markets margin point. As we mentioned, this is really around channel and the specific product that is going down that channel. So really our margins are driven by where the client demand is. And I think two great examples of that are really looking at our fixed income where we exited four basis points higher. That's because we're selling that product on the intermediary channel in Europe versus more institutional channel. Likewise on equities, we saw that drop down by one basis point. We do expect a general, there's a general market trend in terms of the sticker price there, but we're also seeing dynamics between the global product and the regional product where investors are moving more out of regional and into global.

Do we have any other questions, Katie, online?

No more questions at the moment. As a reminder, please raise your hand if you'd like to ask a question.

Brilliant. Well, we've got no more questions. I just wanted to draw it to a close and say thank you very much for coming this morning. We'll be around for a little bit longer, so if you've got any other questions, don't hesitate to doorstep us or any member of the Group Executive Committee and please join us for a coffee. That'd be great. Thank you.