Impax Asset Management Group (LSE:IPX) — Interim Results

0:00 Good afternoon, and welcome to the IMPAX ASSET MANAGEMENT GROUP PLC investor presentation. Throughout today's recorded presentation, attendees will be in listen only mode. Questions are encouraged and can be submitted via the q and a tab situated on the right hand side of your screen. Before we begin, I'd just like to submit the following poll, which I kindly ask you to make responses to. I'd now like to hand over to founder and CEO, Ian Sim. Ian, good afternoon. Hello, everybody. Great to have you with us again. Thank you for joining. So I'm just going to run through the half year results for IMPAX ASSET MANAGEMENT GROUP PLC. That's six months to the end of March twenty twenty six. So just diving straight in, there's a highlights page. Oh, no. Sorry. There's a why IMPAX page first, which is as follows. I think it's very clear that the world of asset management is, changing really quite, quite specifically in the direction of, two areas of a split market. So the so called trillion dollar plus assets under management crowd, the big names like Fidelity and BlackRock, and then, at the smaller end, the boutiques, each of which really needs to have a distinctive offering.

1:07 And IMPAX fits very nicely into that second category. Our distinctive offering is that we are specialists in what we call the transition to a more sustainable economy, which at its heart is a capitalist idea, the move towards energy security, resource efficiency, lower pollution, a roll out of infrastructure on a global basis. And that these areas are not only growing rapidly, but they're also offering mispricing or presenting mispricing because they're quite technical. There's lots of regulatory change. And this is where IMPAX comes in. We have a probably the world's largest team of specialists in this area uncovering that mispricing comparisons, if you like, and then making investments accordingly.

1:53 So we've been around since the late nineties when I set up the the company. We're probably the world's leading brand in this area, and we very deliberately set up a a scalable business model as I'll go on to describe. The next slide is the business highlights. Here they are. So for the six months at the end of March, I'm sure if you're in the markets, you'll remember that these were particularly extraordinary times. We had a very narrow market in the back end of calendar twenty twenty five, the so called MAG seven, magnificent seven AI oriented stocks were, really in the ascendancy still. And then, in January, the market really changed and became much broader. There's much more interest in, heavy assets, low obsolescence type businesses, so called halo stocks, which is where our portfolios generally have a a bias.

2:42 And therefore, as I said in the first bullet point of this slide, the fundamentals of our of our area have been strengthening really for the last well, since January, four and a half months or so. As a result, year to date, calendar year to date, we've had much stronger investment performance and that really has has moved the investor base in the direction of of being less negative, should we say, about our investment ideas. So more detail on that to come. At the same time, as I said earlier, then we are building our scalable business model for for future potential and future success over the medium to long term. So we've continued to diversify our product range and build out our client partnerships. At the same time, we have been through a period of of revenue contraction as our sector has been underperforming the market, if you like. And so we've been reducing our costs accordingly.

3:34 But at the same time, we have a very strong balance sheet. And crucially, management team is the largest owner collectively of shares in the firm with about 18% of the stock. Next slide. There's some financials here. I won't won't take you through them. I think the the most important numbers here are the assets under management. Bottom left, £22,300,000,000. The operating margin above that one, nineteen point two. And the cash reserves, 46,000,000 on the far right. Rest of that detail to come. Next slide. So let me just check. That's not let me just check. Is that the right slide?

4:23 Okay. Never mind. Not quite the the result or the sequence I've got in front of me. Doesn't matter. So market conditions then, as I mentioned earlier, the market's just been much broader in 2026. That's because the AI phenomenon has, really probably lost a bit of steam in terms of multiples in the sector. Obviously, still a lot of positive news, but the stocks had really been racing away in the second half of twenty twenty five. But meanwhile, the Iran war in particular has highlighted the opportunities for energy stocks in general and in particular, the clean energy and energy efficiency areas have been very positively affected. Renewable energy can be deployed much more rapidly than renewables. And of course, if you can save energy through energy security, then that's an immediate benefit.

5:12 At the same time, there's been a lot of additional interest in wildfires and general environmental and weather related setbacks. So lots of opportunities there for the companies we're investing in, for example, the sensing and monitoring of of, these sorts of events and also resilience for for infrastructure. The data center revolution is also not only producing demand for energy, but also demand for large amounts of water for cooling as well. So just lots of anecdotal evidence that the type of investment idea that IMPAX has been focused on is now back in the spotlight for the press. Next slide. So our portfolios are really well positioned to benefit from these trends, as I mentioned. The chart on the left is our, largest thematic equity strategy, which thematic equities in this sense means those equity funds that we run that are skewed towards the sort of trends that I've been mentioning.

6:20 So the percentage numbers here is the percentage of our portfolio invested in these different areas. So you can see energy management and efficiency, 26% digital infrastructure, 25%. These are the largest weightings that our teams have. And, you can see on the right that there's a nice resonance in these areas of energy security and efficiency on the one hand, AI infrastructure build out on the other with the types of exposure we've got. So a little bit more color on how our portfolios are really well placed in context of these two very big trends that are playing out at the moment. Next slide. So a couple of slides now which are showing our investment performance. If you've seen our presentations before, you'll remember this type of presentation. It looks a bit complicated, but, bear with me. So the first of the two slides, as you can see in the top row, is listed equities.

7:15 The red boxes show what's been happening CYTD, which means calendar year to date in the water leaders, specialists, global opportunities strategies. So, water leaders and specialists are our thematic areas, and global opportunities is what we call our core or non thematic area. And the other pairs of bars are what's been happening in the calendar years from 2022. So the blue bar is the year that's in question and the orange bar is the benchmark. So where the blue bar is bigger than the orange bar, that means we're outperforming and vice versa. So what you can see in water leaders and specialists is that our strategies have been underperforming the market for four years, but in 2026 have been outperforming the market.

8:05 And this is actually being pretty typical over the history of these strategies is that they're very different to the market and there's certain market conditions in which they outperform, which were prevalent between 2018 and 2022 and have been, or 2021 and have not been so prevalent since 2022. But but all being well, we're now back in the the positive part of the cycle. Just to be clear then, global opportunities in the bottom right, are non thematic area has been lagging the market again in calendar year to date, that's because once again, it's had a relatively low exposure to those high growth areas around, say, semiconductors or technology more broadly. The next slide is the equivalent for our fixed income division, which as, you'll know if you've followed us for a while, is the area that we've been trying to build up over the last four or five years to try to diversify the business and not have such dependency on on thematic equities.

9:07 So these are the four largest fixed income strategies, global high yields, core bond, high yield, and emerging markets corporate bonds in the four quadrants. Exactly the same format. So the black sorry, the red boxes are calendar year to date and then the previous, four pairs are performance against the indices in each of the the previous four calendar years. So a much more positive story here in recent years, generally out outperforming the indices and calendar year to date are pretty respectable as well. So this is really doing what it's supposed to be doing in the sense of providing a much more consistent level of performance relative to the market while not generating so much upside in the good times. But I we're wanting to signal that this area of the market is or this area of the business rather is doing well and on a good trajectory.

9:54 Next slide. Breakdown of the assets under management movement. Again, if you've heard us or seen us before, you'll know that we generally put out similar slides so you can compare us from one period to the next. This is showing how the assets under management for the firm have changed over two periods. So if you start from the right, this is the assets under management at the end of March twenty twenty six, twenty two point three. And then if you work back left to the green bar, that was the assets under management to the start of our calendar year sorry, start of our financial year, which was the 09/30/2025 or the 10/01/2025. So what happened between green and blue essentially was we had 5,100,000,000 of outflows offset by 1,400,000,000 of inflows on a pretty much flat market.

10:46 And then the same analysis in the previous six months from March 25 to September 25 shows the same parameters, but also the acquired assets of 1,100,000,000, which we gained when we completed the acquisition of Sky Harbor Capital Management, which is a fixed income manager. So I think the point there is that the outflows have been quite high, inflows less than they were in the previous six months. But the investment performance, as you've seen in the previous couple of slides, improving. So what it generally means in the context of where is this bidding business heading is that the flows typically lag the performance as the prospective clients get used to the performance having come back. So all being well, as the performance improves and the flow starts to improve and, you know, we're we're back to neutral to positive net flows once again. So no guarantee of that, but that's certainly the the direction of travel seemingly at the moment.

11:41 Next slide. So again, a standard impact slide. This is the snapshot of our assets under management by different dimensions at the end of March, So, six, seven weeks ago. So we start on the left hand column. This is the types of product that we run. So 60% 62%, again, looking at blue compared to orange in the previous period. 62% at the end of March was in thematic actively managed equities. So that's like the the specialist water. 14% in core actively managed equities, which would be like global opportunities. Systematic equities, I'll come back to you, but that's broadly our our quasi passive index products, fixed income, I've explained, and then we have a little bit in private markets.

12:33 In the middle column, the same blue versus orange, North America, 35%, the EMEA region, 58%, UK, only 7%, and this is a distinctive feature about the firm. We are very much an international supplier, although we we do believe we can win a lot more business in The UK. And then on the same basis, the revenue by product on the right hand side, so our own label funds like IMPAX environmental markets, Ireland, our big usage strategy, 56% collectively and all those. BNP Paribas is a very big distribution partner for us, so 26% of our revenue from BNP, and then the rest is hopefully self explanatory. So I think the point of that slide is that we're we're a nicely diversified business, but we do have some work to do to further diversify the thematic equities, which is what I was saying earlier about the move over multiple years to build in particular into fixed income, but maybe into systematic equities and private markets as well.

13:34 Next slide. So a couple of slides now showing the breakdown in the net flows for the period. Again, the blue numbers compared to the previous period twelve months ago in 2025. So there's a reasonably hard to see vertical line and to the left of the vertical line is the would be net flows net net outflows and to the right of the vertical line will be net inflows. So you can see in all cases, we've had net outflows in these two periods. So the reading from the left, this is The UK and Ireland column. The own label and usage range negative £624,000,000. I'm not gonna read read all this out. Hopefully, it's self explanatory. You've got BNP Paribas in the Middle And North America on the right. So I think that the one that's worth drawing attention to is the one in the middle. So BNP Paribas Asset Management is our largest external shareholder, about 14% of our shares, and they have a big distribution network which we we, have access to. They distribute our funds, and there was a reduction from 1,200 to nine five three net negative comparing one period to the next. So definitely not out of the woods yet with them. They have pretty much completed their merger with AXA Investment Management, so we're optimistic that that will lead to more business for us over the medium term.

15:04 Next slide. Just rounding off this story, couldn't sensibly fit it on one page, so it's the same format, first of all, for the other distributors and funds in the EMEA region apart from BNP Paribas and then, secondly, the Asia Pacific region on the on the right. So, not really much to draw attention to here except on the bottom right we lost a segregated account in Japan actually twelve months ago and that's no longer come through the NetFlow's numbers. Next slide. Okay, so objective now is to go through three slides just setting out where we are in terms of business development and potential for the future. So in the investment area, again, comments first of all on listed equities, then fixed income and then private markets according to the three columns.

15:57 So listed equities, I think we're in a pretty good place in the sense of having a well established investment process, team organisation and team staffing, and the process is leading to quite nice outperformance in the thematic areas. A little bit of work still to do in actively managed core equities. But meanwhile, we do have quite an exciting development in The US, which is our first ETF. ETFs in The US are particularly tax advantageous, and so we're prioritizing those there rather than in Europe where, there's less, compunction from our perspective to to do this. So that's the first of probably many that's successfully underway. And then in systematic equities, as I was mentioning earlier, we do think that there's very strong market demand for services in this area, particularly with a sustainability tilt and with a a reasonably established but not very large base in this space, a well established and highly competent team, then we are planning to extend this, initially through the launch of a of a users fund, which we should be able to get off the ground before the end of the calendar year.

17:03 In fixed income, then we've bought these two businesses in the last three years. I mentioned one, which is Sky Harbor, which was a, US based short duration, high yield credit manager. And the year before, we bought a Danish group called Absalon Capital, which is a specialist in global high yield and emerging market corporate bond. So fixed income, we've integrated those three teams now and also ensured that our sustainability angles and credentials are effectively integrated and credible to outside sophisticated investors. That is pretty much done. We've got a good pipeline and we are seen as institutional quality. The headwind at the moment, as I'm sure you appreciate if you're in a fixed income investment area, is the tight spreads. You're not really getting a premium for for risk at the moment.

17:57 So it's not a particularly easy time to raise money for fixed income. But we do think that when fixed income market circumstances improve with regard to investment attractiveness that will be, very well placed to to grow that quite quite strongly. And then in private markets, we have a highly capable team in the area of renewable energy development and construction With a European focus, we are 58% exited from our third fund and, just over three quarters of our fourth fund is now invested. So we're not allowed to be explicit in the direction of what's happening next, but you can probably join the dots between funds one, two, three and four and what might happen afterwards. Although fundraising climates for private markets investments are not easy at the moment In this particular area, there's strong interest from asset owners. And I think with our European focus and the wider energy security and energy efficiency pressure and political support in general that we are highly confident we'll be able to grow this area.

19:04 In addition, we remain open to acquisitions in both private markets and fixed income, although we don't put ourselves under any pressure to do that because, we've had three successful acquisitions so far, but many of our peers have really stumbled, so we don't want to, fall into any any traps. And then in the second slide here next slide, sorry. So with respect to clients, then we are continuing to build our market opportunity or respond to our market opportunity for the differentiated offering that we provide. There is really a baseload of demand globally amongst asset owners, both institutions and private wealth for this idea of a manager dedicated to the sustainability space being described as a capitalist idea rather than as an ethically or politically motivated idea, and that's a crucial distinction.

20:02 Because of our large team, we've now got a team of approximately 250 staff, then we're well placed to provide the thought leadership and policy work that, just enhances our offering to sophisticated clients who can make the difference between them hiring us and and them hiring a a competitor. We have really quite a well established base of relationships around the world. There's plenty more we can do to establish ourselves as a partner of the major asset owners such as pension funds and sovereign wealth funds and private banks who are looking for multiple products. They're looking for a, systematic and consistent client service, and they are, in many cases, very interested in joining us for research projects.

20:49 So that's that's a nice plank or or foundation for growth. And then because of the withdrawal of many of our as well competitors due to relatively weak offerings and the fact this this area can be and has been seen by some management teams of large organizations as a bit of a political or, or out of favor thematic area, then we've we've been able to enhance our competitive edge over the last couple of years. Next slide, please. And then finally in this area, we've very much focused on making sure that our team and talents are motivated and and highly empowered to continue to deliver value. So we've got very high staff retention as is indicated there.

21:41 We have a succession planning process, which inevitably when you've been around for for nearly thirty years, there's always some people who are retiring. So that's been a focus over the last, four or five years to make sure that's successfully identified and and handled. And then we are definitely working on career development and mentoring, and we get, high levels of staff satisfaction. Having said that, as the business has reduced in scale in the last couple of years, then we have reduced a number of roles. So we are expecting to remove 30 roles during the second half of the financial year. Those individuals are already informed. Most of them have already left the building.

22:26 Some have not, but they know that that's that's sadly happening. We've got a a number of those roles actually that are just vacancies, so it's not like new people leaving or or additional people leaving. The crucial thing about this downsizing is that we're not reducing our capabilities or growth potential, and we've been very careful not to cut off high potential arms for growth in the future. Inevitably, then there's plenty of scope for technology to enhance efficiency. So we were or have been looking at this area now for a long time and have got a good track record of adopting and integrating software packages across the firm. AI, I think, is is a bit of a catchall term for lots of different things.

23:12 We've been moving from a bottom up experimentation approach to AI to, for the last three or four months, a top down strategically structured and guided approach, which frankly is is just bedding down. It's a bit too early to declare exactly what the, the target's gonna look like or what the savings could be. But I think like with most financials or financial services businesses, then we we're pushing hard hard, but being very mindful of the potential for additional risk and, confusion amongst amongst the teams. So being very thoughtful about that. Next slide. So a few financials now. I'm not going to go into the detail and maybe if you want to go into the numbers in more detail, please go back to the slides afterwards.

24:01 So this is really the slide, a restatement of the data that was there that very first slide that I that I showed you. So the dark blue bar is the first half of twenty twenty six, so the end of thirty first of March number compared to the previous two six month periods. So you can see that the dark blue bars, smaller than the other two that we we have been, contracting relative to the previous two six month periods and that's because the market's been against us relatively speaking. And, as a result, we've we've had net outflows. So, yeah, I've already mentioned that the revenue and cost numbers, the dividend number of 2p for the interim compares to larger interim numbers in the previous period.

24:50 So I think that yes. The 8p on the bottom right, that's the full year dividend. The interim dividend is always smaller, so that was 4p equivalent time the year before, twelve months before. So, 2p compares to 4p rather than to 8p, if that makes sense, with half the interim dividend. Next slide. So revenue and fee margin, once again, there's a a stack here with the dark blue being the current period. So if you look at the left hand half of the page, about 24.7, which is the average assets under management for the period producing a revenue of £58,800,000 for the half year, and that compares to, higher numbers in, h one twenty twenty six.

25:42 But, with the with the sort of bridge between them, I won't go into the the details there. Fee margins, roughly stable. So 47.9 basis points or naught point four seven nine percentage points. That's on the right hand side, very similar to what where it was a year ago. And that compares to a range of something like 30 basis points up to 75 basis points for our equity funds. Next slide. Cost management, again, lots of data here to dive into if you're interested. I think the costs have come down quite considerably. If you're looking at the dark blue bars in the top left hand corner and compare them to the light blue bars twelve months earlier, then you can see that we've been reducing our costs, quite aggressively in response to a reducing client base and reducing, revenues realization.

26:39 Staff at the end of March, and this is the top right, two six nine, and that's before the 30 additional roles that I've referred to. So we're expecting to end the financial year with something like 239,240 staff. And then at the operating margin, that's the bottom right, you can see, again, dark blue, 19.2%, which is down from the twenty six point eight percent twelve months before. But I think overall, despite the contraction we've experienced as a result of our area of investing being out of favour until January this year, then we're still a very profitable business generating free cash flow. Next slide. Share management.

27:25 So there are the end of March, I'm looking at the left hand side here, 127,000,000,170 127,000,000 shares outstanding. That's the bottom right of the table. And the start of the, the buyback program sorry. The start of September twenty twenty five, that's halfway up, 130.7. So, we have been buying our own shares, back in the market. We do have what's called an employee benefit trust. It's the bottom sorry, the top right of this slide, and that's the vehicle in which the shares for the new staff members are, are housed. The cost of those shares comes out of the bonus pool. So this is not a drag on shareholder returns that that's not transparent. It's part of the part of the bonus pot.

28:18 And, the ownership split, you can see the bottom right there. So I mentioned BNP Paribas, 14%. That's the light blue. And then the management team is founder of employee ownership. That's myself and two others. And then there's a wide staff group that owns another 6%. Next slide, please. Looking at cash cash movements in the balance sheet, so on the this is the left hand side, finishing the period end of March at £46,000,000 That's down from 64.7 at the start of the period. And from that comes our dividends and we bought back some shares and there's been cash decrease from operations as well.

29:10 So it's still very healthy cash balance at the end of the period. And then this is a breakdown of the dividend that I mentioned earlier. Next slide, please. So shareholder equity on the left and, the time periods, I think, speak for themselves, but concentrate on the third bar from the left. We have a required capital in orange of or light orange, £22,600,000. That's the regulatory capital if you like. And, the dark orange, 53.7, is our capital surplus, some of which is invested in seed capital. So if you like, that's the money. The war chest we've got to go out and either seed new funds and or make acquisitions within a level of prudent management.

30:03 So we do have a very thoughtful and proactive approach to managing this equity pot. We decided in December or late last calendar year to do a £10,000,000 buyback, which was successfully completed. We do have £16,800,000 of seed capital, which, this is in new funds that we're looking to build a track record for. And once the investors come in from outside, then we intend, we've done in the past, redeem that capital. Hence, it's planned to fall in the second half, from that £16,800,000. So capital allocation priorities, bottom right. Financial resilience obviously needs to come first. Dividends and compensation to staff, share buybacks and investment for growth probably sort of equally considered.

30:53 But what we want to make sure in this business is that we retain our growth potential because we have a fantastic growth opportunity ahead of us. And, although we have been suffering headwinds because of the very narrow AI dominated market recently, and we've we've been diversifying the business but not not as rapidly as, we would have liked to have done, then, we we feel that we are hopefully now coming out of the the worst of that storm and have got an excellent growth potential ahead of us. Next slide. And then the one after that. So this is the final slide before we go to Q and A. So just, summarizing now. I think the crucial point is that in this, bifurcated or split asset management market, there's room, very attractive room for a sustainability focused specialist manager like IMPAX.

31:49 We are the global leader in this space with the longest track record going back to 1998. We do believe that the thematic area that we are focused on is outperforming very strongly now and that that's giving us a much stronger foundation to build our outreach to current and prospective clients. Markets have been somewhat volatile recently. Net outflows inevitably are a feature of this industry until there's a longish track record or longer track record of outperformance. So in the second half of calendar twenty six, then if the outperformance remains in place, I think we should start to see those outflows improve considerably. I did want to note for those of you that are not aware that there has been an exit tender from one of our larger clients, which is, impacts environmental markets or IEM PLC.

32:43 This is the impacts investment trust, which we set up in 2002. And, because of the activities of Saba Capital who've been attacking many of these investment trusts, then we have not been immune and and the board decided to put in place an exit opportunity, which was taken up by, I think, about over 80% of the shareholders including the board and those of us in the management team. What's particularly differentiated about IMPAX though is we do have an equivalent uses vehicle, which is doing exactly the same thing as the investment trust and we are in the process of, courting and attracting the IEM shareholders into this UCES vehicle with a, financially advantageous opportunity to to switch. So we're hoping to bring across a material percentage of that £740,000,000 into the user's vehicle over the next couple of months.

33:36 So over the medium term, and I'm thinking about 2027 and beyond, then the market is really well placed for more in the way of client partnerships, deeper multidimensional relationships with larger, more sophisticated asset owners, which ought to lead to more business for us. And, in the context of that multiyear, a decade plus growth opportunity, then right now, we're focused on talent retention, cost management while not in any way reducing our capabilities. And then crucially, underpinning all this is our strong financial health. So with that, I'm going to pause and, take questions. Perfect. Thank you, Ian, for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions via the q and a tab on the right hand side of your screen.

34:24 For your reference, a recording of today's presentation will be available in the Investor Meet company platform shortly after the meeting's ended. But for now, Ian, as you can see, there are a number of questions which have been submitted. Can I please ask you to read out the questions and give your responses where appropriate to do so? And I'll pick up from you at the end. Yep. Sure. So couple of questions from Matthew c to start with. I think they might have answers in the slide deck, Matthew, but what percentage of revenues comes from higher fee active equity strategy versus lower fee fixed income or passive products? So I'm not sure what the page numbers are, but but the answer there is is on the slide. So 62% from thematic equities generally with high fees, fixed income 10%, and passive or systematic 10%.

35:13 Unusually, both fixed income and the passive products are relatively high fees for their their markets because they they're in a retail format in The US. So you shouldn't think of those as being particularly low fee. And also from Matthew, how dependent is future growth on third party distributor relationships? Well, on the same slide I'm sorry. I've got a slightly different format for the slides, so I can't remember what number it's on. There's a breakdown of the assets under management by revenue. And so BNP Paribas 26%, sub advisory and advisory funds, are really third party distribution, 10%. So that's 36% together. And then our own label funds are 56%.

35:59 Some of those we distribute ourselves, but in some cases they are on other people's platforms. So what we typically say somewhat loosely is that 50% of our business is institutional and 50% is wholesale with other parties in charge and half of that is with BNP simplistically. Sam d asks, for I think you've got a couple of questions as well. So are there sectors historically avoided by impacts that now look attractive because of energy security themes? Well, of course, we have we have a large percentage for assets under management in thematically oriented sectors, which includes energy efficiency as one of its areas of investment. So within those thematic funds, then we have generally seen energy efficiency as quite capital intensive and being cautious about it because of high interest rates.

37:02 But I think with energy prices now being so so high, then as you imply, energy efficiency is is very attractive. There's a similar story to be told around renewable energy. So for example, the development of solar power projects where the power price now and the the relatively cheap Chinese panels being available makes the projects quite attractive. At the same time though, interest rates are at recent historical highs. So I would say that we are now particularly focused on energy security not because we've historically avoided them, but because relatively speaking, they're a bit bit more attractive than they were, say, a year ago. And then Sam's also asking another question, which is could you use your your cash position more aggressively?

37:51 Yeah. Good question. So what I was really indicating earlier was that we've been really quite proactive and thoughtful about using our cash position. On the one hand, of course, it needs to be used efficiently. Otherwise, why should you not want it back? And therefore, we've been looking for acquisitions, we've been doing share buybacks, and we've been seeding new products. On the other hand, we need to make sure this is a resilient business or there is in the remote possibility, but it's not out of question that these sort of businesses can be undermined if their cash position means that the capital drops below the regulatory minimum. So, it's certainly our intention to use this as proactively and as, efficiently as possible. I'm trying not to use the word aggressively, but, I hope you understand what I mean.

38:41 And then, got a question from Tom, and, that's the last question. So if you've got any questions, please, jot them in now because there's a little bit more time to go if, if you'd like to keep going. So from Tom, what specific indicators give you confidence that IMPAX is approaching a genuine inflection point in flows and earnings rather than simply experiencing a temporary performance rebound? Yeah. Good question. I think the crucial thing here is the sequence of investment performance first because that really brings the confidence that underpins flows. And from the flows and the market levels comes the revenue and the earnings for the management company. So that therefore, we try and guide everybody to the investment performance.

39:29 Now are we at a period or in a period where AI has really stopped leading the market and will flatline or plateau relative to everything else, which is going to benefit amongst other things from the AI input? Or are we going to see what we did in the last half of calendar twenty five, which is where AI finds another yet another tailwind and confidence about its earnings and return on invested capital increases and hence that area outperforms. So that's an absolutely critical question for everybody. I think the general view that we would subscribe to is that the AI area, particularly around the MAGEMENT type primary stocks, has reached a point where it's hard to see its multiples going up a lot more. But meanwhile, there's a lot of benefit for and opportunity for those ancillary companies in the heavy asset, low obsolescence areas, which is where we particularly focus.

40:34 So we have been reporting in the slide deck, four months of of outperformance relative to markets and some very good absolute returns as well. Is that gonna carry on? Well, I think our thesis will be that that if you, you know, take a six to eighteen month view that, very much so. Will it be a smooth ride? Well, probably not because markets are a bit choppy at the moment. We did see in calendar twenty four that there were three months of outperformance to start with and then we had Liberation Day, as it's called, which was a real market shock with Mr Trump's tariffs being imposed. I think it was the second of April last year and then we had a very choppy market for the rest of the year. So definitely not declaring victory, but I do think that with the fundamentals of our thesis really nicely placed for fundamental earnings growth in the underlying companies that we're looking to invest in, coupled with a broader market sentiment around multiples. I think from a listed equity perspective, we're we're nicely placed and from that outperformance of that ensues then should come better flows and from the better flows comes better better p and l. I think the critical additional point though is is the need for diversification, which I've been mentioning three or four times in the last, forty five minutes and which has been a theme of the leadership here for five years or so and underpinned the two acquisitions we've made, fixed income, investment in not only the fixed income growth but also systematic equities and our openness to additional, appropriately sized and culturally aligned acquisitions.

42:07 So, yeah, you're asking the right question, Tom. I can't give you the definitive answer. I suppose that's sort of what markets are about. But I think, you know, from a I'm the third largest shareholder in this business and the thing that reassures me is that this is compelling idea with a medium to long term perspective and we are the globally leading brand with more experience than than anybody else. So in that context, it may not be, may not be a smooth ride in in the next, six to twelve months, but, I think you'll be taking a medium term patient view, then, then it should be a great investment. I think I've reached the end of the questions. And so unless, you'd like to add any more, then I think we're probably done. Perfect. Thank you, Ian, for answering all of those questions. Before we ask investors to share their feedback, which I know is important to you, if I could just ask you for a few closing comments to wrap up with, that would be great.

42:59 Sure. Well, look. Thank you for joining, with your listening live or or after the the broadcast. Really appreciate all your interest and support. And for those of you that are have invested, thank you for that. And, anybody who would like to invest, definitely encourage you. This is a really compelling business idea. The equity markets and the broader financial markets are really very attractive for a specialist manager. The rise of passive investing in the last few years has really been dominated by this magnificent seven effect, which is almost certainly only temporary. So the scope for actively managed equities and fixed income is, is really coming back into, into focus right now, and we're really well placed to take account of that or take benefit from that. Meanwhile, we do have in our investment thesis some compelling medium to long term themes that should lead to company outperformance in terms of earnings and return on invested capital. And with the globally leading brand in the space and a really nicely diversified client base, I think we're very well placed to continue to deliver great value for clients in the investment funds and through the associated earnings to retain, a really highly qualified and capable group of staff and then also to provide great returns for for our shareholders.

44:15 So really appreciate your attention on behalf of the board and management team. Look forward to staying in touch, and we're always available for direct q and a if you want to contact us yourself directly. Thanks. Brilliant. Thank you, Ian, once again. Ladies and gentlemen, I'd ask that you don't close the session just yet as you'll now be automatically redirected to a page to give your feedback, which helps the company better understand your views and expectations. And behalf of the management team, we'd like to thank you for attending today's presentation. I wish you all a good afternoon.