Good day, Welcome to the Pacific Current Group 2021 full-year results conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Paul Greenwood, CEO and CIO of Pacific Current Group. Please go ahead, sir. Thank you. Thank you all for joining us on the Pacific Current FY 2021 results call. We appreciate your interest in PAC and look forward to taking you through FY 2021, as well as sharing some thoughts about the future. In general, we feel really good about the year. As we walk through it, I think you'll see why. Of course, our reported results look a little more modest because of the currency impact when translating results into Australian dollars. Given that more than 90% of our revenues are in US dollars, looking at the results in US dollars seems to provide a more accurate understanding of what is fundamentally going on in our business. For those unfamiliar with PAC, our business model is pretty simple. We invest in high-quality asset management firms on a global basis. If we do our job well, those firms will produce strong performance, which helps increase their revenues and attract additional clients and funds under management. The amount of funds under management, and to a lesser degree, the performance the managers generate, produce revenues and profits at each investment manager. PAC's revenues are composed of its share of the profits or revenues of our portfolio companies. On page three of our presentation, we provide some high-level observation regarding performance, growth, and earnings. In terms of performance, results were quite good for our private capital strategies, with many of them rebounding very well from last year. Our long-only strategies didn't fare as well. They gave back some of the stellar results from last year, though their intermediate and longer-term results remain excellent. In terms of growth, fund growth was exceptional during the year, growing 52%. As everyone is probably aware, a lot of that growth reflects dramatic growth at GQG Partners, whose firm actually grew 90% in US dollars to $84.7 billion. Even excluding GQG, we still saw aggregate fund growth of 11% across the portfolio, most notably at ROC and EAM. In terms of headline financial results, the most noteworthy items I think are that underlying net profit before tax grew 13% in US dollar terms and 17% growth in underlying NPAT in US dollar terms. Those numbers are more modest when you look at it in Australian dollars. They're 2% and 5%, respectively. A final dividend of AUD 0.26 was declared, bringing the full-year dividend to AUD 0.36 a share, compared to AUD 0.35 last year. The profitability of our business, just based on our management fee-related revenues, grew really nicely during the year because of the growth in management fee revenues that we received and as well as the reduction in cost during the year. We'll elaborate on all of these a little bit more as we go through this. Page four of the presentation summarizes the underlying results in more detail. We, I think for the first time, put the results in Australian dollars and US dollars side by side, and I think that paints a more comprehensive picture of the actual fundamental results of the company. As you look at the slide, you really get a sense of the impact that currency had on results. As a good example of this, if you look at revenues in AUD, they declined 4%, but in reality, they actually grew 7% in local currency. Another good example is that PAC's management fee-related revenues grew 10% when translated into AUD, but in reality grew 23% in USD. Performance fees and commissions declined notably during the year due to lower performance fees from Carlisle, SEI, and VPC, though ROC Partners had a meaningful increase in performance fees. Commission revenues declined in FY 2021 as commissions from GQG ran off. Going forward, we expect lumpier commissions, but it's worth noting that the commission revenues for the private capital strategies that we are attempting to raise capital for, those tend to be higher than they are for long-only managers. While we expect commission revenues to be more volatile going forward, they still may be very meaningful. Page five highlights something we call management fee profitability. It just tries to give a picture of how profitable our business is if you just look at the management fee revenues and disregard performance fees and disregard commission revenues, and put all of our costs against it except the commission expenses. I think it was sort of the organic profitability of the business. You'll see that that grew very nicely during the year. To us, we like to see that a higher proportion of our profits is comprised of more repeatable revenue streams. That's, I think, the takeaway of that page. Page six of the presentation highlights the growing portion of our revenues come from investments where we share in revenues rather than profits. This is a very intentional feature of our strategy, but we go out of our way to blend our investments by making some where we're participating in the revenue of companies, and some in which we're participating in the profits of those companies. The revenue share arrangements provide more consistency and downside protection, while profit shares provide more optionality. This flexibility in structuring investments, one of the other sort of virtues of it gives us more shots on goal when competing for new investments, because many of our competitors don't exhibit that same degree of flexibility. We find that we can win deals based on our willingness to invest with a broader array of structures. For those wondering, as you see this growing portion of our revenues coming from revenue shares, page nine shows which investments are revenue share arrangements and which ones are profit share arrangements. I think, hopefully we've laid that out in a way that's clearer than we have in the past. Page eight is merely a reminder of our investment approach and philosophy as we go to seek new investments and new investment managers to partner with. Page nine, that lists the portfolio and which ones of those are Tier 1 and Tier 2, and gives some general information around them. I think most notably, what's the nature of our economic involvement. Moving to page 10. That page highlights some sort of more significant portfolio developments during the year. They're relatively self-explanatory, but I'll elaborate on a couple of them. Obviously, GQG remains incredible story. Their growth has been phenomenal. Growing 90% off a base of more than $40 billion is an incredible achievement. They continue to be one of, if not the fastest growing investment manager in the history of the investment management industry. Obviously we're incredibly grateful for that partnership. The other one I wanted to highlight was Victory Park. As we've mentioned the last mid-year call, they've been an active participant in the U.S. SPAC market, as they have participated in launching four SPACs. I won't get into a long discussion on what SPACs are, because they can get complex. People should understand that these SPACs that they've launched, or they've sponsored, don't represent funds under management for Victory Park. They do represent a way that they can enhance the value of their clients' portfolios through improving returns. That impacts PAC via potentially enhanced performance fees and incentive fees. Which we would expect to see as a result of the success they've had on that front. Moving on to page 11. As I mentioned, performance has generally been strong. Our long-only managers, as I mentioned, they had such good years the prior year, they gave back some of that. I generally expect that after a very strong year of performance. On the private capital side, we were very pleased with the performance of most of our managers. When the pandemic first hit, some of our portfolio companies sort of systematically wrote down the values of their portfolios just to be, because in the fog of uncertainty, they wanted to be conservative. Nearly all those write-downs have been reversed, and not only have asset prices recovered nicely, but those of our portfolio companies that are selling assets are generally realizing very attractive prices and valuations for what they're selling. The recovery in real asset prices, which had been in sort of a decade-long bear market, but have perked up more recently. That's been a particular help to both Aether and Proterra. Page 12 just details the FUM growth over the last three years of our portfolio. Obviously, GQG sort of breaks the scale on this. I think the point we're trying to make here is that if you look across the portfolio, you see broad growth. There's a couple of these that we didn't own for that entire three-year period, but in general, we have. Last year, ROC Partners and EAM were the biggest growers in the portfolio aside from GQG. I think it's one of the things that's really important to note about or remember about our portfolio is. Because we have a lot of these alternative strategies that raise capital via a series of serial funds as opposed to through open-end fund structures like a long-only manager. They tend to grow a little more deliberately but have more resilient revenues. Private equity firms don't grow 100% a year. They grow in a more measured way. We've intentionally tried to blend, once again, that sort of consistency that they can offer with the higher optionality, but higher risk of long-only type strategies. These private capital strategies, I think over the next year or two, we're going to see some broad and significant growth across many of them. Moving on to page 14, just provides some statistics on our pipeline and potential investments. I think what the real takeaway there is, the market is very robust right now. We're seeing lots of deals. We're seeing more competition in our space in general. In some situations, we've seen deals get done at valuation levels we think are excessive. The good news is we've been doing this long enough, and our network generates enough proprietary opportunities that we don't feel any real constraint by some of these higher valuations that we've seen some deals get done at. We are very comfortable that we can continue to find new investments at valuations that are reasonable. Last page 15, before we get to some questions, and there's obviously a lengthy appendix. We wanted to offer some more prospective thoughts on the business. I guess I'd start with that our portfolio companies are starting to have better visibility into their future fundraising. I think this stems from increased allocator activity. When the pandemic started, all these allocators just sat on their hands, but now they're becoming more active. People are also becoming more accustomed to allocating money during a pandemic, and processes have evolved to make that happen. Then we're also seeing an increase in the level of sales activity. I can't say that we're traveling as much as we have. We've only done a few small trips, our sales team, to sell products, but you are seeing more sales-related activity. In this presentation, we also call out that we are expecting at least AUD 3 billion-AUD 8 billion of new allocations in the next 18-24 months for our non-GQG managers. We exclude GQG because they've grown so fast it's hard to predict. We would expect them to grow nicely as well, of course. That $3 billion-$8 billion is not rampant, or it's not just idle speculation that, hey, these firms are raising money. For the most part, that estimate's a reflection of our knowledge of specific client interest in specific products. We really feel pretty good about the outlook for this, and we expect it to be sort of broad across the portfolio. In fact, what is hopefully a proof point on this, just in August, so last month. Actually, I guess it's this month in the U.S. still. Victory Park secured its first Australian account, which is a multi nine-figure account, and hopefully the first of many to come. I think we'll be seeing some more, like I said, more data points like that throughout the year. Actually, I think accelerating as we get into next calendar year. Then we also expect to deploy more capital. Nothing is imminent, but we are working on putting in place a significant new debt facility that we hope to have in place in the short term that will, along with the cash we have on hand, provide us with ample firepower and dry powder to pursue some of the more interesting deals that we're looking at. After a challenging 18 months, we know the world is not out of the woods yet. We're very optimistic about the future and where we sit. While, of course, there's no guarantees, and there are many things outside of our control, I mean, the last 18 months probably taught us all that. We expect additional growth in FY 2022 and in FY 2023, we think that will come from organic growth. We think that will come from contributions from new investments. Probably greater performance fees as well, although those by their nature are harder to predict. We can't guarantee that. I think any increases in cost should be modest increases at all, if any. Then the last thing is, as people are aware, we have had a fairly significant skewing in our dividend in recent years toward the second half of the year. I think we'll still see some of that skewing, but we are going to try to make that a little less skewed toward the second half than the first half as we go forward, just to make it a less bumpy ride. With that, we are happy to answer any questions, and I'll ask the operator to queue them up. Yes, sir. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, that is star one if you would like to ask a question, and we'll pause for just a moment. Once again, that is star one if you would like to ask a question. We'll now take a question from Nic Burgess with Ord Minnett. Good morning, Paul. A couple of questions. Yes. Just around the outlook and that fund flow statement that you gave. Can you give us a little bit- Sure. M ore color around those flows, perhaps which boutiques you're most confident in over the next couple of years? Sure. What I'd say is, I'm broadly comfortable that well, I'm comfortable that this will not be one manager driving it. I expect, like I said, broad success. I would be surprised if we don't see Pennybacker, Carlisle, EAM, Victory Park, Proterra, and I'm probably missing Astarte. I'd be surprised if we don't see all of them have some decent success on the fundraising side here in the near future. Okay. I should mention I'm sorry, Nic. One thing I'd say is, part of that is because these private capital strategies have fundraising cycles, where they go to market every so often to raise the next one of their funds. I'll give an example that we expect in next calendar year, Pennybacker Capital to be in market raising this next fund. Given their exceptional performance, we expect them to be successful in raising that. Like I said, it's not just idle speculation. It's a function of knowledge of when they're going to be raising money, what the status of their current fundraising environments are, and in many cases, what specific prospects they're talking to them. That makes sense. I guess, the range though, is still pretty broad, $3 billion-$8 billion. Yeah. Perhaps, what are the sort of risk factors or things that would bring it towards the bottom end versus the top end? That is a good question. I guess the reality is institutional accounts are big and lumpy. As evidenced by that account I alluded to with Victory Park. Whenever you're talking about clients that might average AUD 100 million, if things don't go your way, it just takes two or three things working against you, and you have a disappointing outcome. That said, I think, that AUD 3 billion mark, I hope proves to be very conservative. Yeah. Okay. That's helpful. Just a couple of other questions. I think you quickly alluded to this on the call, I guess, given your positivity around the pipeline and increasing levels of activity, we should expect that the underlying corporate cost to increase a little bit over the next 12 months? I would say, very modestly. The big variable, frankly, is travel and entertainment. Internally, we budgeted half of a full year's of travel, assuming that we'd get on the road half time this year. It looks like that's not going to happen. I would say there's only modest raises across the company. There's no other planned cost that would be noteworthy, aside from if the world frees up, we'll send out our sales team more aggressively. Okay. Thanks for that. Just lastly, in terms of potential deal flow opportunities. Slide 14, there's some detail there around the opportunities that you've seen. Just wondering if you could refine that a little bit in terms of where your interest mostly lies across that spectrum of opportunities. Sure. Well, we try to be open-minded to everything. That said, I'd say where we're engaged in more interesting conversations these days are some more private real estate firms., I'd say, call it interesting private equity firms. All strategies, as you can tell by that pie chart, we're looking at all strategies, but right now it happens to be a little bit more in the private real estate world. We've been looking at a lot of private credit firms. Some of them are getting bid up to valuations where we don't feel comfortable playing. We are really intrigued by what we're looking at in the real estate segment right now. Okay. That's helpful. Thanks very much. Yeah. Again, that's star one if you would like to ask a question. We'll now take our next question from Brian Short with Short Family Superfund. Hi, Paul. Hi, Brian. I'd just like to compliment you on the results presentation. I think that's serving well to make the accounts less complex and a bit easier to understand. My specific question is on repatriation of earnings from boutiques. It looks like the revenue-sharing boutiques, it seems reasonably straightforward. With the repatriation for the profit or performance boutiques, seems a bit less straightforward. Do you have arrangements for annual distributions, or is it at the discretion of the individual boutique boards? Is that the case? Good question. Obviously, revenues are very easy to determine and it's easy to sort of get those on a quarterly basis. What I'd say is, on those profit share deals, we still get those earnings as regularly, with the exception that most performance fees are either crystallized at the end of the year or on a totally idiosyncratic basis. Performance fees are the ones where you can't look at one period and really extrapolate to the next. The bottom line participation of the profit share, we are getting those. We don't leave it to the discretion of management. When we make these arrangements, we put in a definition of what we call distributable cash, which means any cash above these levels needs to be distributed to shareholders. How do you protect PAC's interests and keep your finger on those individual boutiques? Do you seek board participation, or you don't want board participation? Yeah, I would- I could understand with your low number of staff that you wouldn't have the ability to spread yourself across so many boards. I'm just wondering how you ensure that PAC's interests are protected. Yeah. To be honest, we're often on boards, but the real way we get our interest protected is contractually. For example, if we have a profit-sharing arrangement with a company, they are not free to change their budget without our approval. We have a variety of controls. The reality is we use very expensive New York law firms who are very good at this, and we've been doing this a long time, so we tend to document these deals very well. At the end of the day, our protection comes from the contractual rights we get at the time we made the investment. Okay. Thank you very much. Good luck next year or this year. Thank you. As a final reminder, that is star one if you would like to ask a question. We'll now take a question from Stuart Dodd with Renaissance Asset Management. Oh, hi, Paul. Hey, Stuart. I just wanted to ask, calling out flow expectations. I hadn't noticed that before. Is it fair to say that's because of increased confidence or increased visibility? You haven't done it in the past, so it's an interesting thing to do, and it's fairly significant. I'm presuming from that you've got line of sight to incentivize you to do that. That's right. Obviously, with the caveat that of course none of these are guaranteed. If, for example, let's say one of our managers says, "We're going to be raising a fund six months from now," and our existing investors have informally committed to half a billion dollars. That gives us a lot of comfort and a lot of visibility, right? When I talk about those sort of numbers, that's along the lines of what I'm referring to. Frankly, we do have more visibility than we had one year ago. Okay. Fine. I guess there's two other things I wanted to touch on with you. One is, I guess, just on Proterra. From sums moved up, but it has been a phenomenal market for commodities, generally speaking. Yeah. Are you comfortable with the performance of Proterra, or is there something that's been holding that back, perhaps? Yeah. Keep in mind, you're not going to see their assets go up as a function of what's going on in commodity markets, just because that's not the way it's calculated. Proterra, looking at that, I think they're performing very well. The pandemic, because their food fund they're raising is an Asian food fund, obviously that pandemic did interfere with their fundraising, probably as much as anyone's. They sort of had to shelve everything for the last year. The good news is that you can Google, there's some data points on some new investments they've made from their food fund. I think where you're really going to see some positive data points from them relate to the private credit fund that they are now raising. I think we'll see this is an example of some of the fundraising visibility I was alluding to. I see. I think t hey haven't grown much, but I think the next year or two should look pretty good. Okay, fine. Just lastly, if I may, in the past, you've talked about restructuring PAC, with a view to potentially raising money in a different way. It's not mentioned in the presentation today. Is that still something you're looking at? It is. Actually, there's an oblique reference to it on the last page. Yeah, we continue to look at ways where we can access more capital. We think we can deploy with our current resources, probably we could invest AUD 100 million a year. Yet PAC doesn't have that kind of balance sheet. We continue to make strides toward getting our hands on some external capital to manage. Okay. I've seen the reference there. Is that something we might get news on in FY 2022 or too hard to call, or? I would hope so. Okay. Yeah. I would very much hope so. Thanks very much. Yep. It appears there are no further telephone questions. I'd like to turn the conference back over to our presenters for any additional or closing remarks. Well, thank you for your time and your questions. If you'd like a one-on-one discussion, feel free to reach out, and we'll happy to chat with anyone. With that, wish you all a good day. Thanks a lot. Once again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.