Man Group Plc New

Good morning, everyone, and thank you for joining us today. I'm Robin Grew, the CEO of Man Group, and I'm joined by our CFO, Antoine Voltaire. I'll begin with a high-level overview of our investment performance and client engagement in 2025. Antoine will then walk you through the financial results, after which I'll update you on our multi-year priorities, now two years on from when we first announced our strategy, before providing longer-term context on the evolution and positioning of our business. 2025 was a year of pronounced peaks and troughs for markets, where periods of volatility tested investor resolve before conditions eventually stabilized. We navigated shifting sentiment and at times unprecedented reversals, absorbing shocks from deep seek in January, tariff announcements in April, ongoing geopolitical tensions and debate over the sustainability of fiscal spending and AI infrastructure investment. Markets demonstrated a remarkable capacity to withstand stress, though the path was far from smooth. Given this environment, I'm pleased to report a set of results that shows just how resilient demand group is. Antoine will go into more detail later, but I'll start with some headlines. Firstly, I'm delighted that we ended the year with AUM of $228 billion, driven by 21.4 billion of positive investment performance and $28.7 billion of net inflows. Through continued cost and capital discipline, we generated core earnings per share of 27.6 cents. Along with this, we also executed against our strategic priorities, completing the Barden Hill acquisition, simplifying our operating model, and positioning the firm for long-term growth. These results underscore the continued demand for our differentiated offering, the depth of our client relationships, and crucially, the value of the diversified business we have built. On the topic of diversification, the benefits of having a diversified range of investment content were highlighted clearly in 2025. The first half of the year was undoubtedly testing for trend following strategies, continuing the run of underwhelming performance that began in Q2 of 2024. The reversal of the Trump trade in Q1, combined with the administration's stop-start approach to tariffs, created whipsawing market conditions where sustained trends were incredibly hard to find. However, investor sentiment moved on from the lows of early April and August proved to be the inflection point. As risk on sentiment took hold, several trends finally began to emerge and persist. Our strategies adjusted positioning to capture these moves, delivering strong gains into year end. In that context, it was great to see AHL Alpha and AHL Evolution finish the year up around 5%. The strength we saw across our strategic priorities enabled the firm as a whole to successfully navigate the significant period of stress for trend following. The results from the numeric range were particularly impressive. Over the past three years, these strategies have delivered returns averaging 4% over their respective benchmarks. Our liquid credit strategies also continued their strong run of outperformance, while our multistrat ran 1783, once again delivered outstanding returns. By dynamically allocating across our full range of uncorrelated strategies, it has delivered consistent high quality performance since launch in 2020. On an asset-weighted basis, relative investment performance was positive overall in 2025, driven primarily by our long-only strategies. Within alternatives, the overall relative underperformance was largely attributable to AHL Evolution's performance earlier in the year, which trades harder-to-access markets and differs significantly from the traditional trend followers in the index. Turning to clients, we prioritise being present with our clients in 2025, holding over 16,000 meetings to understand their evolving needs and help them navigate a complex environment. That focus drove exceptional client-led growth during the year. We delivered record growth and net inflows nearly 20% ahead of the industry. We've taken market share for the sixth consecutive year, a very strong outcome in the context of a challenging fundraising environment. As you can see from the chart on the left, the strength was broad-based. It is well known that large allocators are seeking to do more with fewer managers, consolidating relationships around true strategic partnerships. That trend plays to our strengths and the numbers reflect that. It was also a record year for new client additions, with 36% of gross sales coming from relationships entirely new to the firm, while our top 50 clients remain invested in more than four strategies on average. Whether I'm speaking with a pension fund in North America or a sovereign wealth fund in the Middle East, the feedback I receive is clear. Our clients face increasingly complex challenges that require tailored solutions. With a broad range of uncorrelated strategies delivered through a technology-powered platform, we have the capability and the scale to meet that demand. From customized risk levels and access to new asset classes to the launch of new product structures, we are adapting to how our clients want to work with us. That agility is a competitive advantage. And now, I'll hand over to Antoine, who will take you through the numbers.

Thank you, Robin, and good morning, everyone. I'll begin with last year's financial highlights before providing further details on our AUM, P&L, and balance sheets. As Robin mentioned, we ended the year with AUM of $227.6 billion, up nearly $60 billion since the end of 2024. The increase was driven by positive investment performance of $21.4 billion and record net flows of $28.7 billion. On a relative basis, our net flows remained ahead of the industry for the sixth consecutive year, with our sustained growth in market share further validating the relevance of our offering to clients. In 2025, we recorded net revenue of almost $1.4 billion, including performance fees of $281 million, mostly from non-AHL strategies. This demonstrates the progress we have made in diversifying our mix of revenue and performance fee generation in particular. We also recorded $38 million in investment gains. Fixed cash costs of $430 million reflect the actions we took earlier in the year to maintain cost discipline and to better align resources towards our strategic priorities. At 48%, the compensation ratio was within our guided range. protecting lower net revenues in the year. As a result, core profit before tax was $407 million, with $294 million of core management fee profit before tax, which equates to 19.6 cents of core management fee EPS. Lastly, we are proposing a final dividend of 11.5 cents per share, taking the total dividend for the year to 17.2 cents in line with 2024. We continue to maintain a strong and liquid balance sheet with net tangible assets of $723 million as at the end of this summer, supporting a disciplined capital allocation policy. Our overall asset-weighted relative investment outperformance was 1.3% compared to 1% in 2024. Investment performance was positive across all product categories, with long-only strategies delivering particularly strong results. Our long-only offering contributed $34.5 billion in net flows, serving as a powerful endorsement of our differentiated proposition in this space. While alternative strategies faced some headwinds due to the poor performance from trend-following strategies in the first half, engagement on liquid alternative and crisis alpha remains robust as we head into 2026, reinforcing the continued relevance of uncorrelated content. Other movements were $8.9 billion. This includes $6.7 billion of FX tailwinds owing to a weaker US dollar, as a significant proportion of AUM is denominated in other currencies, and $2.7 billion from the acquisition of Barden Hill. Finally, in addition to fee-paying AUM, we also ended the year with $4.9 billion of uncalled committed capital, which provides a strong foundation for future AUM growth across our private markets business. Before moving on from AUM, I wanted to spend a moment on the new reporting categories we are introducing this year. This updated categorisation, which you can see on the slide, reflects the growth and evolution of our business, provides greater transparency on our strategic priorities and aligns more closely with market practice to improve comparability with peers. As you'd expect, there is no material change at the long-running and alternative category level. We have simply reclassified the subcategories to make them easier to understand. More details, including information on fee margins, can be found in the investor data pack on our website. We will continue to provide the previous categorization in our materials up to Q3 of this year to ensure a smooth transition. And of course, we are available to answer any questions you might have. Our run rate net management fees, which represent a point-in-time snapshot of the firm's management fee earning potential, increased to $1,182,000,000 at the end of December 2025, from $1,058,000,000 at the end of 2024. This was driven by the significantly higher AUM at the end of the year and the strong recovery in transfer-linked performance in the second half. This is the highest level in more than 10 years. The run rate net management fee margin decreased from 63 basis points at the end of 2024 to 52 basis points at the end of 2025, reflecting the shift in underlying AUM towards long-running strategies during the year. As I have emphasized many times before, we did not target a particular net management fee margin, but instead prioritized driving profitable growth across all our product categories. Moving on to performance fees. In a year where trend-following strategies struggled before recovering in the second half, core performance fees were $281 million compared to $310 million in 2024. This is a strong reflection of the progress we have made in diversifying our business and its performance fee earnings potential. It underscores our ability to deliver strong outcomes for our shareholders, even in years of below-average contribution from trend-following. At the end of December 2025, we had $59.6 billion of performance fee eligible AUM, of which $36.6 billion was at high watermark compared to $21.1 billion at the beginning of the year. A further $17.4 billion was within 5%. An often overlooked feature of our business is that $13 billion of AUM from the long-running category is performance fee eligible, increasing our performance fee earning potential while providing valuable diversification. This slide provides further insight into how performance fee earnings potential has changed over time. If you have followed us for a while, you might recall a similar slide I invested there in 2022. The dark blue line plots the distribution of a Monte Carlo simulation of the next 12 months performance fee outcomes based on distances from our auto mark, expected returns, and volatility assumptions for our key performance fee paying funds as at December 2025. The median simulated performance fee outcome for 2026 is 471 million dollars. This is a 35% increase from 349 million at the end of December 21 and nearly three times what we expected in December 2016. This improvement predominantly reflects a growth in performance fee eligible AUM and the progress we have made diversifying the underlying range of strategies that contribute to your performance fee earnings. As at the 20th of this month, we had accrued approximately $350 million of performance fees due to Crystallize in 2026. As always, this figure is not a forecast or guidance, but rather the position at a specific point in time. The amounts that Crystallize will fluctuate, increasing or decreasing, based on investment performance up to crystallization dates. Moving on to costs. Fixed cash costs of $430 million were 5% higher compared with 2024. This includes a $16 million impact due to the strengthening of sterling against the US dollar, and another $4 million from the Barden Hill acquisition. These increases were partially offset by the cost control actions we took earlier in the year, as reflected in the decrease in headcount. the overall compensation ratio increased marginally to 48%, reflecting the decrease in measurement and performance-free revenue during the year. However, the recovery in transferring performance in the second half meant that we were able to remain below the upper end of our guided range. From 2026, we will be changing the modeling framework, moving away from the fixed cash costs and comp ratio guidance to a core PBT margin range. Our previous guidance was established in 2013 during a period of significant restructuring when the business looked materially different. This approach, which focuses on a few specific line items within our P&L without allowing for fungibility of spend, is no longer fit for purpose. Our operating model has evolved and technology is ever more central to our business. Going forward, we will manage the business to a core PBT margin, typically between 30 and 40%, varying based on the quantum and mix of revenue. It may be outside this range in years with particularly high or low core performance fees, as it has been in recent past in both directions. This range is calibrated around the average realized core PBT margin of 35% between 2020 and 2025. This challenge provides greater operational flexibility, which is critical to remaining agile given the pace of change. It should not change the way you think about and model the overall profitability of the business. Importantly, it also does not alter our commitment to cost and capital discipline or remove the ability to benefit from significant operating leverage and exceptional performance failures. Core net management fee earnings per share were 19.6 cents, 9% lower than 2024, while performance fee earnings per share decreased to 8 cents, down from 10.6 cents in 2024. Total core earnings per share were 27.6 cents. In summary, despite the challenging market conditions for trend following in the first half, 2025 was another year of resilient earnings for the firm. We continue to maintain a strong and liquid balance sheet, which gives us optionality and flexibility to pursue our long-term growth ambitions and return capital to shareholders. At the end of December, we had $723 million of net tangible assets, including $173 million in cash and cash equivalents. Our seed capital program continues to play an integral role in supporting the growth of our business. In 2025, we see the 12 new strategies, including new private credit strategies and activity Fs in line with our strategic priorities. Gross seed investments at the end of December were $603 million. The portfolio remains well diversified across strategies and markets. This brings me to capital allocation. Our policy remains disciplined and intends to support the future growth of the business while delivering attractive returns to shareholders. It follows a clear waterfall with four categories. First, we aim to increase the annual dividend per share progressively over time, reflecting the firm's underlying earnings growth and free cash flow generation. In 2025, dividends to shareholders total approximately $200 million. Second, we deploy capital to support product development and technological innovation. We continue to actively manage our seed book, considering the opportunities available. And in 2025, we redeployed $400 million of seed capital. We also continue to invest heavily in technology to ensure we remain on the forefront. Third, we evaluate M&A opportunities that align with our strategic priorities. In 2025, we completed the acquisition of Barden Hill, bolting on opportunistic credit and performing loans capabilities to our credit business. Finally, any remaining available capital is returned over time through share buybacks. Last year, we repurchased $100 million of our share capital at an average price of 182p. Including the proposed final dividend and the $100 million share buyback I just mentioned, we've returned approximately $300 million to shareholders in the year. Over the past five years, the total capital return to shareholders via dividends and buybacks is $1.8 billion, over 50% of our market cap as at the end of December. Shareholders now receive an additional 23% of every dollar of earnings when compared with 2021. On that note, I'll hand over to Robin to take you through the next section of the presentation.

Thanks, Antoine. 2025 tested us at times, but we navigated the challenges to emerge stronger and finish the year with real momentum. That is a powerful validation of our strategy. We were able to deliver a resilient set of results because the diversification we have built over recent years is delivery. In a year where trend following faced significant headwinds, it was the strength in quant equity, liquid credit and solutions on the investment side, combined with strong growth across client channels and geographies that delivered for us. That is our strategy working as intended. The benefits of diversification are clear and this slide illustrates why. The capabilities we have scaled have near zero or even negative correlation with trend following. The more high quality uncorrelated content we offer, the more relevant and valuable we are as a strategic partner to clients. That relevance drives growth. And as you can see on the chart in the middle of the slide, the business today looks very different from just four years ago, both in terms of scale and business mix. That shift also matters for earnings. Not only does it grow and strengthen our management fee stream, but as Antoine mentioned earlier, it also improves our performance fee earnings potential. non-AHL performance fees have grown significantly from $116 million in 2021 to $225 million in 2025. Diversification has reduced our reliance on any single investment strategy and has increased the stability of our overall earnings, providing new options for growth that ultimately drive value creation for shareholders. The strategy we outlined two years ago will enable us to continue to deliver this diversification. As many of you will recall, we outlined three priorities at our full year results two years ago. They were to diversify our investment capabilities, to extend our reach with clients around the globe, and to leverage our strengths in talent and technology, all while continuing to invest in the core of our business. We set ambitious goals to drive the next chapter of growth for Man Group. Now, more than ever, we have conviction that we are targeting the right areas. Although not every initiative moves at the same pace, the prevailing trends in our industry remain largely unchanged. Client engagement is the strongest it's ever been, and we have good momentum across several pillars of our strategy. Let me take you through the progress we've made in more detail. starting with our investment capabilities. Our credit platform continues to go from strength to strength. We now manage $53.1 billion across the liquid and private credit spectrum, up from $28.3 billion just two years ago. Organic growth in liquid credit has been exceptional, with strong client demand for our high-yield and investment-grade strategies in particular. We also completed the acquisition of Barden Hill in October, which adds opportunistic credit to our existing private credit offering and strengthens our CLO capabilities. I'm very pleased with where we stand. We are now a broad-based partner across the credit space. On quant equity, it was pleasing to see our long-only strategies have an exceptional year, growing AUM by 97% and continuing our track record of alpha generation. Alongside strong performance, it is the ability to offer a high degree of customization at scale that is also proving hugely valuable to clients. Mid-frequency is a complex space that requires significant investment in research and infrastructure, and there's a lot of work going on behind the scenes. We've developed two distinct strategies that take different approaches to idiosyncratic alpha generation, factor exposure, geographical focus, and holding periods. Notably, our quant alpha capability delivered 21.3% net performance in 2025, which offers clear evidence of our progress in this high potential space. We continue to deliver complex solutions to help our clients solve their most significant challenges. That remains a real differentiator for us. More recently, our advisory offering in partnership with the Oxford Man Institute has been in strong demand as we partner with clients to deliver thought leadership that helps them to navigate issues they face across their portfolios. A great example of this is the work we've done on timing the market in collaboration with one of our Nordic clients. The agility we have shown in adapting to client needs has served us well, and that will not change. Finally, I spoke about MAN 1783 earlier today. After another strong year in 2025, we've delivered 10.5% net annualized performance over the last three years for our clients. That is a track record that puts us up there with the best in this space. We are continuously improving our investment processes, knowing that innovation is not just about launching the next flagship product. It's about making everything we do better every single day. We've also made strong progress extending our client reach, targeting the regions and channels where we are underweight relative to the size of the opportunity. North America is a great example of that. I'm delighted that we have nearly doubled annual gross flows from North America in two years, from $10 billion to nearly $20 billion. Growing our presence in the institutional channel has been a particular highlight, with a 24% increase in North American pension plan clients. Given the sheer scale of that market, we see a significant runway for growth. In wealth, we've seen a similar trajectory. We are bringing institutional quality liquid products to one of the fastest growing segments in asset management, and the opportunity here is large. To strengthen our offering, we launched four active ETFs across discretionary and systematic styles in equity and public credit last year. our strategic partnerships continue to deliver strong growth. The Asteria joint venture is a great example of that, where appetite for our credit products has been particularly strong. Finally, on insurance, I'm sure many of you are aware that this is a complex area that requires careful groundwork. We have laid those foundations globally, and our strategic partnership with Major Yasuda is an encouraging early step. Discussions with prospects continue, though it remains contingent on the ongoing build-out of our overall credit capabilities. Our third priority is to continue leveraging our strengths in talent and technology, both of which are underpinned by the culture of constant improvement that runs through our DNA. We're always looking ahead, positioning the business for future growth. A good example of this is the change we made last year in Systematic, bringing AHL and numeric together under one division to drive innovation, product co-development and research collaboration. We approach technology with the same mindset, and as a result, we're not just keeping pace with change, we're leading it. We made significant advances in AI during the year, developing over 100 plugins across the firm using a range of AI platforms. For us, this isn't a peripheral initiative. It is truly embedded across our entire organization. And it's one of the reasons Anthropic has chosen to partner with us on the design and application of AI in investment management. I think that tells you something about where we stand. Our ambition is clear. to become an AI powered asset manager. We have the heritage, the expertise and the data to make that a reality. So across all three pillars, investment capabilities, client reach and talent and technology, we have made meaningful progress. The strategy is delivering and the results speak for themselves. We entered this year in great shape and with good momentum. Our $87 billion liquid alternative business gives us a platform with an exceptional long-term track record of delivering for clients and shareholders. In an environment where clients are increasingly focused on uncorrelated returns, liquidity, and crisis alpha, the relevance of that platform has never been greater. Alongside that, we now manage $17 billion in private credit, with teams focused on underwriting discipline and the ability to capture dislocation when it arises. Our long-only business has scale, a clearly differentiated proposition, and a proven ability to generate alpha. And finally, we've aligned resources with our strategic priorities, ensured cost and capital discipline, and positioned the business for long-term success. The result is a firm with its highest run rate net management fees in over a decade and near record performance fee optionality. I feel very good about how we have started the year and our ability to capture the opportunities that lie ahead. It is not just our business that is well positioned, the market environment is supportive too. After a decade defined by US exceptionalism, we're seeing a more complex, dispersed landscape emerge. That is exactly the environment in which active management thrives. And allocators are responding. The chart in the middle shows their plans for 2026, which favor many of the strategies where we have strength, hedge funds, portable alpha, active extension. Our ability to help clients navigate this environment with a broad range of alpha-focused strategies has never been more relevant. At the same time, demand for customization continues to grow. Capital allocated via customized structures has increased 61% since 2023, reflecting a clear shift towards strategic partnerships and tailored solutions. You've heard me talking about our strengths in that space time and time again. It is where we have a clear competitive advantage. So, to close, 2025 tested us and our strategy delivered. Record inflows, AUM at all-time highs and a resilient set of earnings in a year that was far from straightforward. The diversification we have built proved its worth. I'm incredibly proud of what this team has achieved. None of this is possible without the exceptional talent across our firm. Their energy and commitment are what set us apart. We enter 2026 as a more diversified, structurally stronger business that is well positioned for growth. The landscape is shifting in our favor. Markets are more dispersed, allocators are demanding more from fewer partners, and the value of our offering has rarely been clearer. We have the investment content. We have the client relationships and the technology platform to capture that opportunity. And I have absolute conviction that our strategy will deliver long-term value for our clients and our shareholders. With that, we'll open up for analyst Q&A. As a reminder, to ask a question, you need to have joined the presentation via the WebEx link. Press the raise hand button and please unmute yourself when we can call your name. Thank you.

Thank you, Robin. And we'll start with Nicolas. I'm going to send a request. And you should be able to unmute.

Yes, good morning. Can you hear me? Yes, hello, Nicolas. Hi there. Thanks for the presentation and for taking my questions. Three questions from my side, if I may, please. One on AI, one on absolute return, and one on capital return. So on AI, I think that the anthropophic partnership is super interesting. I appreciate it's early days, but do you have any ambitions or key milestones you can share with us from that partnership? And I guess just more broadly, if we think beyond yourselves, how do you expect AI to impact competition and alpha generation in the markets in which you operate? And which markets do you think could see the most significant impacts, please? That's the first one. On Absolute Return, I appreciate the strong delivery in diversifying the business, for sure. But if I focus on Absolute Return, could you just give us a sense of investor sentiment and engagement there, given the shift from underperformance to recovery, but there's still negative relative performance? And are there any further redemptions in the pipeline we should be aware of? And then finally, on capital return, I guess following the repayment of the RCF, you have significant available net cash and equivalents. What was the rationale to keep the dividend stable and not declare any additional capital return? And should we see this as an indication of your M&A pipeline? Thank you.

Right.

Do you want to start with the last one?

Yes.

Which is the... Start with the last one. Start with the last one. So we have a clear unchanged capital allocation policy. Dividend first, which we aim to grow in line with earnings over the cycle. And if you look at earnings year on year, they were down, hence keeping the dividend flat. Now, if you look over the last five years, we've increased the dividend 3%. I think to the tune of 10% per annum over that period. So we've delivered the growth over the cycle as intended with our policy. And then we aim to invest in the business both organically and inorganically. If you look at last year, we deployed investments in technology, but also did an acquisition. And then after that, we look at returning capital by way of IBAC, which we executed last year to the tune of $100 million. So we returned $300 million to shareholders last year in addition to doing an acquisition, a bought-on acquisition, in a year that didn't see us generate a huge amount of capital given the slightly softer performance fees. So very much in line with our policy, we're keeping dividend flat. Do not read anything into future M&A. The board in due course will consider options and might return capital to shareholders as and when it sees fit. I can take the absolute return one. I would differentiate between transferring and the rest of offering. Transferring had indeed a soft, let's be clear, a poor first half and then a tremendous recovery that extends into 2026. The rest of absolute return category, which I think is best represented by our fund 73, performed well throughout. 70% was up in the first half and up in the second half to finish the year last year, 14%. In terms of investor sentiment, the outflows we saw last year were primarily driven by the transferring category as well as some of the risk parity category. Both have had a strong second half and start of the year. And eventually, performance is what leads to flow. We don't comment on future flow, as you know, so I'm not going to give you specific comments, but I think you can read in the confidence that we have, the way that we think of ourselves starting 2026 in a strong position, the belief that we have in our client relationship.

Yeah, I... AI. Fair to say we're excited about the opportunity set. No specific milestones that we've set with Anthropic, but this is a partnership where we believe we can add to their understanding of what the needs are, but also drive the solutions that we can put in play across the organization, be they at the front end and the research capability that we can look at and develop more, or indeed through the entirety of the AI capabilities you see for efficiencies and effectiveness through the rest of the organization. For us, we've spent 35, 40 years being at the cutting edge of technology. This is no different. We believe we are in a terrific place to benefit from, use, utilize, lead with some of the strongest players on the street, this extraordinary technology capability. So, tremendously excited, no real milestones, but we think this partnership will help us, along with everything else we do, take full advantage of the full suite of technology.

With that, I'm going to go to Arnaud. Arnaud, you should get a request to unmute. Hi, Arno.

Hi, good morning. Yeah, I've got three quick questions, please. Firstly, going back to the buyback. So historically, when you tend to come back into performance-free territory and in a good position, usually that does correlate with buybacks. I'm just wondering why there hasn't been, in particular, if I'm looking at the cash flow statements, I notice a big outflow in terms of working capital. So maybe if you could give us a bit more color there and what your thinking is in terms of the buyback, I mean, the net financial assets that improved. So I would have expected some nonetheless. Second question is on St. James case. There was some news flow around St. James reallocating a mandate. I'm just wondering what would the quantum that might impact our flows and when that comes through. And my third question is on management margins. the run rate management fee margin looking forward has reduced. Clearly, there's a bit of a mix shift between categories and understand that. Understand that you don't manage the business to a given management fee margin and all the business is good. But I'm just wondering if I isolate each category, are we seeing at constant mix, are we seeing dilution margins? My question. Thank you.

Yours, I think. Yeah, I'll take them in order. And thank you for the questions. Expand a bit on the buyback. Performance fees are obviously one source of capital generation, and therefore a correlation between performance fees and capital returns, because it sort of follows a waterfall we outlined. I go back to what I mentioned earlier. Last year, we deployed $300 million of capital returning to shareholders, plus an acquisition in a year where cash flow generation was still more subdued. Um, there's a, there's a timing of cash flow, uh, point as well and we start the, uh, in a strong position. Do not read anything in that signal. We have not changed our capital policy, but at this point, the board has not decided to to announce a buyback. Um. Sometimes we don't comment on future flows. We have had in the past commented on very large flows in and out when we felt it was relevant, but we're not commenting on future flows. The outlook remains the one that you can read with outline. And then on management fee margin, We are seeing a mix shift, both between categories and within categories. Between categories, if you look at the year, we finished the year with a majority of AUM on the long-only side, which is traditionally lower margin. I think 60% of our AUM is long-only. And that explains the overall, the shift. Within categories, you're also seeing the same thing. So if I suppose on the absolute return category, what we saw last year was a slight relative underperformance evolution, and then worse flows in evolution with a higher margin product than the other content within that category. And that explains why within that category, you also saw margin erosion. We are not seeing any fee pressure that we call out here. So it is really a mixed effect at the category level and within the category level. I'll go to David McKenna.

Morning, guys. Hopefully you can hear me. Yeah, a couple of my questions have already been answered, so I've got just two left. The first one, on the new 30% to 40% PBT margin guidance, I mean, I guess reading into your comments, it sounds like there's some fresh investment that's going to go into things including AI, but presumably the reason you can keep the margin roughly where it has been is because you're intending to get some kind of efficiency or handle productivity savings from that. But maybe you could sort of give some colour on that sort of, you know, those two forces and how you're thinking about them in that mix. And then I guess delving a little bit deeper into one of the previous questions, clearly you've had some strong recovery as you've touched on as well in a number of your funds in the second half of last year and continuing into this year, which is good. I appreciate you're not giving colour on flows as such, but historically when you have seen some recovery following a period of weakness, you have sometimes seen investors, I guess, take money out at that point. They kept during the period of underperformance, but then came up when it did recover. So are you seeing any signs of that happening? That would be the second question. Thank you.

On top of this one, no, I mean, nothing again that we call out that's not already in the numbers. And you're right, performance and flows do correlate, although it's not like it's a sort of immediately identifiable correlation. It usually comes first on the wealth channels, and then instead tends to have a kind of longer horizon, hence the sort of lumpiness in flows that we often refer to. The PBT margin is really about, as I said, giving us more flexibility across the various lines compared to what we have. It is not intended to change the profitability for shareholders. That's an important point I want to repeat. When it comes to AI and technology, We're not doing this because of specific efficiency that we've identified. This is not a way to kind of capture the deficiencies. This is about us being able to continue to invest in the business, benefit from those kind of very significant advances in technology and the strength that we have, so we continue to deliver growth. The key point, as I said, is this does not shine anything to the ongoing profitability of the business.

Thank you. It's more about the alpha, the potential alpha that the strategy can develop rather than anything. Correct. Yeah, great. Thank you.

Thank you, David. I will then go to Hubert. Hubert, you should be able to unmute. He says hopefully.

Hi.

Can you hear me? Yeah. Yeah. Great. Thanks. Yeah, it's Hubert Lam from Bank of America. I got three questions. Firstly, obviously, there's been a lot of focus recently on private credit. Can you talk about your software exposure within your US private credit business and then commentary about credit quality within that line? Second question is also on credit. Can you just also talk about the deployment within Verifgon, how that's coming along, how much dry powder you have there currently? And last question is on 1783, another strong year performance. Can you just talk about what you can do to scale up that product, given that that seems like a pretty big opportunity that you can exploit there, just given the strong performance? Thank you. Thank you, Uwe.

Well, one I tried was 1783. Let's start there and we'll split up between us. Really pleased with the performance. You're right. Thank you for calling that out. I'm glad you're enjoying the performance as much as we are in that space. We continue to see and have really excellent conversations with clients. We have a strong belief in this product and its track record. And so this is about making sure that we can convert some of those conversations into investment. But we feel very good about it. The performance is robust. We continue to see strong engagement on it. The scale is there, we have the capability and it has the capacity to operate. I'll take the private credit piece just on our exposure. Let me do it slightly differently. We're very limited. Let me stay to the start. We have very limited exposure to software and technology across both of our direct lending and opportunistic credit books for background. Direct lending software and tech exposure is sort of somewhere sub 6%. Think about it like that. But also think about it in a slightly different way. This is a middle markets business where also it's been run with high discipline and underwriting and risk management. So this piece that we talked about through last year about being slower in deployment because we valued the risk management approach and proper underwriting quality was what we continue to believe is the right thing to do. Our exposure is far less than any of our peers, but also we're not facing retail markets. This is an institutional facing business. So we also don't suffer or have to worry about liquidity mismatch, for example. So we believe this is a good strategy. Middle market provides good opportunity. We run our business with high discipline and high risk focus. We're not exposed to the sector in the way that you might have been seeing others have been. We don't have liquidity mismatch issues. And we continue to have strong belief that this is an area for development. In terms of dry powder?

I'm still 4.9 billion dollars, the number we mentioned, and underlying in the AUM categorization, the direct lending category has deployed a bit more capital, so you don't see it, but the underlying AUM has actually increased. It's obviously increased more because of the acquisition of Martin Hill, who made NDR. Before I go back to the screen, we still have a couple of questions. I'm going to read a question from Mike Verner, who seems to have issues, probably dialing in WebEx. We saw a significant increase in long-only performance-free eligible AUMs in 2025. Was this due to a large mandate, or is this a trend we should expect to continue going forward? If you go to slide 10 of our presentation, you see that at the end of 2025, we had $13 billion of long-only AUM that was performance-free eligible. That's increased from $5.8 billion as of the end of 2024. Um, that is a series of mandate. There's not a single mandate. Um, obviously there are in steam mandate. So there's tend to be sizable by construction, but it's not, it's not just one is a series of of mandates. Uh, and that in part explains why, uh, we generated a hundred million dollar of performance fees in long only in 2025. Second question for Mike. Is it possible to get a breakdown of seed capital between public and private markets, given the delta and equity in those strategies? The answer is yes. You have it in slide 14. At the bottom, liquid markets account for 79% of our seed investments and private markets for 21% of our seed investments on a gross basis. I will then go to Isabelle. Isabelle, you should get the request to unmute.

Hi there, can you hear me okay? Hi there, thanks for taking my question. I just have one, please. So if you take a step back and look at the MAM platform holistically, where do you think there are potential capabilities you're missing or need to enhance? inorganically going forward.

Thanks, Isabel. I'll take that question. You know, we have always been very clear. We will always look for capabilities that are uncorrelated to that that we have today that still rhyme with the verbs and nouns that we understand. But let's be clear, that comes from organic growth. We can demonstrate that as you think about, for example, the high-yield and investment-grade credit business we've built here organically. That speaks to the capability we have already to grow that capability. It's not just about M&A. We added five new teams into the discretionary space, so we're interested in capability that comes organically. again, in uncorrelated content from that space. So we're not focused on a specific area. You know the strategy that we're trying to follow. We feel like we're making great strides in that space. But right now we are very, very focused on the book of business we have in front of us and we'll continue to look for capabilities that we don't currently have. But right now we're feeling quite good.

And then we have one last question from, or simply questions, from Jacques-Henri. Jacques-Henri, I'm going to request you to unmute. We haven't had the chance to be acquainted, so if you could tell us which firm you're from as well, that'd be great. Thank you.

Good morning.

Hello, Jacques-Henri.

Can you hear me? Oh, lovely. Hi, I'm Jacques-Henri Goulart-Kepler-Chevreux. Thank you very much for taking my questions. I had two related to the updating model framework on the PBT. Getting the 30 to 40% now, is it a bit a reflection of the fact that 2025 was really, really tough? Despite that, you more or less made it. And it's like, if we can make it in that type of condition, then we'll definitely make it, whatever happens almost. Sorry about that. And the second question would be your non-core costs. uh is actually a little bit lumpy and the definitions are effectively quite range would you consider probably reducing the range of those core costs to actually include some of them into uh into the the pre-tax margin definition some of your peers for example include the restructuring costs in there and in fall that's it for me thank you congrats for this morning

Thank you, Jacques-Henri, for the questions. So the range is really a reflection of the evolution of the business over the last 13 years. When the previous framework was put in place, the business was going through heavy restructuring with a very focused approach on fixed costs in particular. And that's why previous management focused on single line item targets across the P&L. As we evolve the business, as we invest for growth, as we invest in technology, but also grow our teams, we feel that having the ability to use the cost P&L line more fungibly makes more sense without importantly taking away from shareholders. So do not read anything into it. The second question is on non-core costs. You're right that last year we had an increase in the non-core costs for really three specific reasons. Most of them really related to 2025. The first one is a court case which is ongoing that went to trial in March of last year. The trial will conclude in March of this year. So we incurred some legal costs. This relates to allegations made from the 1990s. So firmly not sort of related to the current core business, which is why they're sitting non-core. The second was the restructuring charge we took around the middle of last year as we addressed difficult first half and realigned resources across the business. That's another around $30 million, of which 10 is non-cash, 20 is cash. And then the third element in the non-core line, which is more in keeping with what you usually see, is the non-cash impact of re-evaluation of liability in relation to your Asteria partnership. Asteria, you might recall, is a joint venture that we have focusing on wealth in Italy in particular and continent in general. It's going very well as a result. The implied valuation of the liability that we have remaining on the balance sheet has increased. And that also flows through the non-core. We're not proposing any change to a definition. Importantly, what you saw last year is not on the basis of a change either. It's just the same definition in a year that's a bit exceptional. With that, I don't believe we have any more questions. So we'll finish here. Thank you all very much for your time. Thank you very much.