Ladies and gentlemen, thank you for standing by, and welcome. At this time, all the participants are in a listen only-mode. After the speaker's presentation, there will be a question and answer session. To ask a question at this time you'll need to press star one on your telephone. I'd now like to hand the conference over to your first speaker today, Managing Director, Ian Macoun. Thank you. Please go ahead. Thank you, Tara, and welcome to everyone who's joined us on the call this morning. Thank you for your time, and thank you for your interest in PNI. This call is to discuss our results for the first half of the 2021 financial year. We posted with the ASX last night, our formal results announcement, our audit reviewed financial statements, our Appendix 4D, and importantly, our investor presentation, quite a detailed investor presentation. We'll be speaking to the presentation this morning, or at least to parts of it. The colleagues with me on the call are Alan Watson, our chairman; Andrew Chambers, executive director with particular responsibility for institutional and international distribution; Ramsin Jajoo, who leads our retail distribution function; and Dan Longan, our Chief Financial Officer. Besides finance and accounting functions, Dan's responsible for IT, middle office and back office, cyber, a range of other infrastructure functions. You have four key executives and our chairman on the line. As is customary for our results calls, I'll simply call out the main themes and highlights of our results, and I'll briefly elaborate a few aspects that we feel are particularly important for analysts and shareholders. The presentation's far too detailed for us to cover fully in the call of this duration. We've make it this extensive to enable people to review as much detail as they wish in their own time. Of course, we'll go into more detail in one-on-one meetings with larger shareholders. We'll leave plenty of time for questions, which you're welcome to direct to any of the Pinnacle representatives on the call. You can see on the agenda slides, and it is kind of obvious in any event, there are sections where the relevant executive will be Andrew or Ramsin or Dan rather than me. I would be very surprised, to be honest, if we do not get quite a lot of questions focused on our retail and institutional and international sales. They have been so strong, and I am sure people will be very interested in what caused that and how sustainable it is. To the presentation. Slide one is a disclaimer that is important, and we ask you to read at your leisure, please. Slide two is an agenda. Slide three is titled First Half 2021 Financial Year Themes. This sets out our opinion of the major themes for the half. Now, we recognize and we strongly believe that it's for our guests on this call, analysts and shareholders, to form their own opinions of our performance and the outcomes that we're delivering. We always value feedback from you, by the way. Nevertheless, people do ask us for our view, our opinion on how things are traveling. We're happy to do this to the best of our ability and in good faith. You'll see here that our view of the themes this half is very upbeat and confident. We are indeed very proud of what's been achieved this half, we will strive to always be objective and fully realistic when we're giving this opinion on our themes. This half's themes are quite different from our opinion of the themes just six months ago when we released our FY 2020 full-year results. At that time, we said we felt we delivered a solid financial outcome in the prevailing circumstances, and that it was below our expectations at the start of the year. Our profit was higher than in the previous year, but not by as much as we would have expected in the absence of the COVID crisis and the market downturn. We spoke of lower inflows, both insto and retail, and our hope that the pipeline of flows that had not materialized, particularly in March and April of 2020, was deferred, not lost. Happily, that proved to be the case, and we've experienced very strong inflows, both retail and insto, in the first half of the 2021 financial year. Our first half themes this year are as set out in slide three. Strong financial outcomes, strong growth in funds under management, and strong net inflows. I'll go into more detail on those inflows soon. Growth in the size and breadth of our affiliate base is delivering clear benefits to shareholders. We've built greater diversification across different asset classes and investment strategies. We have substantially enhanced our performance fee potential across a range of strategies and market conditions. The growing size and diversification by client type and domicile of our client base is enabling further fund growth, as well as resilience to any challenges within any particular client group. We've delivered continued strong investment performance, and we are entering the second half of the 2021 financial year with the business growing rapidly, ready to take advantage of opportunities that may materialize and prepared to react to any further external adversity. Noting that we have responded very well to date to the COVID-19 crisis. Those are the themes as we see them for the half that we're reporting on. Slide four provides the financial highlights for the half year. Net profit after tax of AUD 30.3 million. That's up 120% on the prior corresponding period. Basic EPS, AUD 0.175, up 116% on the PCP. Diluted EPS, AUD 0.167, up 117% on the PCP. Our profits, our EPS, have a little over doubled on the PCP. Our share of the net profit after tax from our affiliates was AUD 31.8 million, up 80% on the PCP. This includes our share of performance fees earned by Pinnacle affiliates after tax of AUD 11 million in the half. It also includes our share of Coolabah's net profit after tax from December 2019, when we acquired a 25% interest in Coolabah. Cash and principal investments stood at AUD 51.4 million, we've declared a fully franked interim dividend of AUD 0.117 per share, payable on the 19th of March, that is up 70% from the PCP. There are a couple of important footnotes that we should discuss. We always net out the return on principal investments from our profit number. We don't think of that as part of our underlying profit. Footnote one does that, excluding the principal returns, our NPAT is AUD 29.5 million. It's still up 120%, rounded on the PCP. The second footnote is important. It also adjusts for our share of affiliate performance fees post-tax. That's the AUD 11 million that I mentioned earlier. If you eliminate all of that performance fee profit, our after-tax profit is AUD 18.5 million, up 39% on the PCP. Clearly, these performance fees, which were at a high level this half, are responsible for a lot of the profit increase on the PCP. I would point out that the 39% increase is still a very healthy percentage increase. We don't believe if you're seeking to determine what might be a normalized or a sustainable level of profit for this half, we don't believe that you should eliminate all of these performance fees, because the performance fee potential of our affiliates is now large and very diversified, with 18 different strategies now having the potential to make a meaningful contribution to our profits. This is a big issue, performance fees. We have a whole section devoted to that shortly. Slide five provides a little more detail on the financial results in table form. Slide six sets out the funds under management highlights. The aggregate affiliate funds under management rose to AUD 70.5 billion. A number we're proud of, AUD 70.5 at the 31st of December. This was up AUD 11.8 billion, or 20%, from the 30th of June, so over the six months, and up AUD 8.9 billion, or 14%, on the 31st of December 2019, so a year earlier. Aggregate retail funds under management were AUD 16.7 billion, up 28% on June, on the six months, and up 17% on the year. Equities markets rallied strongly during the period from their lows in January. Of the AUD 11.8 billion increase in the six-month period, increases due to market movements and investment performance were AUD 6.3 billion, AUD 1.7 billion of which was retail. Importantly, increases due to net inflows were AUD 5.5 billion. A record AUD 1.9 billion of which was retail. Now, more detail on these very big inflow numbers in the next slide. We emphasize that we have an increasingly diverse client base with more than 190 institutional clients at the end of December, compared with only about 60 four and a half years ago, before what we call the Pinnacle roll-up into the listed company. On slide seven, something we are very pleased about, our funds inflows for the half. Slide seven, we are obviously delighted to have achieved our highest ever level of net inflows, both in aggregate and importantly, in retail inflows. Our net inflows for the six months totaled a record AUD 5.5 billion. This compares with AUD 1 billion in the six months to the 30th of June, and AUD 2 billion in the six months to 31st of December, so the PCP. Retail net inflows for the first half were a record, as I said, a record AUD 1.9 billion, this included no inflows from listed investment companies or listed investment trusts, which have helped with our retail inflow numbers in past years. The AUD 1.9 billion compares with just AUD 90 million, so just a very tiny net inflow in the second half of FY 2020, so the half immediately preceding, it compares with AUD 900 million of net inflows for retail in the PCP, AUD 200 million of which was LICs and LITs. This is an exceptionally strong result following the turbulence in the second half of last financial year. Clearly, I think people are aware, Hyperion has been a very strong performer in retail, but there've also been significant inflow contributions from Coolabah, Firetrail, Metrics, ResCap, and Solaris. Institutional net inflows for the half were AUD 3.6 billion, compared with AUD 900 million in the second half of last financial year and AUD 1.1 billion in the PCP. As we previously indicated, a number of institutional allocators deferred decision-making last half given the widespread uncertainty. Happily, allocations have resumed in the half we're reporting on, and our institutional prospects remain strong. These prospects are pleasingly from an increasingly diverse set of clients by geography and by client type. Now, recognizing, as we always say, that institutional flows are lumpy, we are nevertheless encouraged by this inflow result for the half and for the prospects for coming months. You get the opportunity to ask Andrew Chambers about the inflow prospects in a minute. Slide eight sets out some further business highlights. In the interest of time, I won't go through these now. Slide nine has some further detail on the financial outcome. Total affiliate revenues have passed AUD 200 million for the half, including AUD 45 million in performance fees. In the PCP, total affiliate revenues were AUD 132 million, which is obviously large growth. Slide 10, Pinnacle Parent, I won't go through this. Revenues have grown 26% on the PCP, driven by the strong inflows in the half, which impact some distribution fees that we receive. Look, I think the rest of the financial slides are self-explanatory. I'll move to slide 13, our response to the COVID-19 crisis. You'll see a quote there. We've said in previous presentations that we believe that the reputations and future success or otherwise of investment management companies are often determined by their behavior and performance during periods of crisis. Crises tend to define some managers, and their capacity to resume growth, emerging from a crisis, depends on the strength of their capabilities with which they emerge from such crises. How you can go forward depends on how you emerge from the crises. We are truly delighted with how our affiliates and Pinnacle people responded and coped with the crisis. Truly delighted. Now, this slide sets out the approach that we took. I won't go through it. We have emerged from this crisis stronger than ever. I'd like to spend just a little time on the crucially important topic of performance fees. We have five slides devoted to this topic. May I highlight some of the points that we're seeking to make. On slide 15, performance fees, repeatability, and size. We want to emphasize that the potential aggregate performance fees are both sizable and repeatable each year. In contrast to many fund managers who have only a small number of strategies subject to performance fees, therefore it can be sort of a bit hit and miss year by year. We currently have 18 strategies and growing. We've for some years had a deliberate strategy to seek performance fee structures as an alternative to higher base fees. We just remind everyone these performance fees are direct substitutes for base fees, and they're a means of maximizing average annual revenue, especially in capacity-constrained strategies, where we're rationing our capacity or in strategies in extremely high demand. They're also attractive to many clients because they further align client outcomes with our performance. We have a healthy mixture of base-only fees and lower base plus performance fees, and this yields optimal overall business outcomes. We have in the group ample consistent base fee revenues, right? We've got heaps of base fee revenues, but we believe that in maximizing average annual revenue by a diversified range of substantial performance fees as well, this gives you the best outcomes. We are absolutely delighted with the mix that we have achieved of base and performance fees, and we've done this as a deliberate strategy. Whilst we recognize that it may be difficult to estimate, and I kind of apologize to the analysts and fund managers, we know it's difficult to estimate our performance fees. Nevertheless, we believe that a substantial quantum of performance fees should be included in revenue forecasts if we want to reflect realistic, even conservative, expected outcomes. I should say, we recognize this is counter to what sort of the perceptions and sort of, you might say, conventional wisdom of some in the analyst community, and there's a belief that performance fees should somehow be valued less than base fees. We believe that's not the right approach to performance fees in the case of Pinnacle because they're so diversified and they're becoming so large. To slide 16. These two graphs on this slide 16 help, we think, to illustrate how we have seen very large growth in both the volume of funds under management and the number of investment strategies that yield performance fees. Top graph is FUM, so this is performance fees. Bottom graph is number of strategies that have the potential to deliver a meaningful contribution. The number and diversity of strategies with significant performance fee potential continues to increase, improving the annual reliability of overall performance fee revenue. We point out that the likelihood of performance fee success is not correlated to the level of the equity market. They are instead based on performance relative to individual hurdles. The likelihood of performance fees is distinct between each of our individual strategies. Slide 17 shows sort of the huge increases over the past four and a half years in the size and the diversity of our strategies that yield performance fees. Slide 17, I'll just let you take that in. It's graphically illustrated that increase in size and diversity. Slide 18, the amounts of performance fees delivered by our different affiliates over this period. I'm sure you can figure out who's who in the different colors. To slide 19. We would urge you to please consider the factors set out on this slide when you're estimating future performance fees for Pinnacle. First point, the second half versus first half split, we point out that the potential and reliability of performance fees are logically greater in the second half than the first half each year. This is because seven out of 18 strategies that currently have the potential to deliver significant performance fees crystallize only in the second half of each year. 11 out of 18 strategies have the potential to deliver significant performance fees in the first half, but all 18 have such potential in the second half. Although, of course, the range of possible outcomes remains large every half, it's by no means guaranteed that in any particular year, the second half will exceed the first half. That bias is there. Palisade, ResCap, Metrics and Solaris have annual fees that crystallize on the 30th of June each year. Only once a year in the second half. The second half also includes some that are in what we call the higher reliability category, like Palisade and Metrics. Higher reliability in the current environment, that is, and you can form your own view about that likelihood of achieving those performance fees. Secondly, the size of performance fees, and that depends on three main factors. Firstly, the size or volume of FUM with performance fee potential. We've got 18 strategies at the moment that can deliver meaningful fees. Slide 40 elaborates this. Secondly, the size of alpha, which is the outperformance of the affiliate versus their benchmark or their hurdle. Thirdly, the extent to which the strategy is currently at or below the high-water mark. The diversity of strategies greatly enhances reliability year by year. The variety of strategies with performance fee potential is now large and growing, and the performance fees of virtually every strategy are uncorrelated with every other strategy because they derive from independent alpha sources. Look, finally, and very importantly, the last point, funds under management subject to performance fees are expected to grow. You look at the points under there, Hyperion Global, ResCap Retail, for example, are experiencing strong growth. We'll have growth in a number of affiliates, Aikya, Longwave, and Reminiscent, new affiliates. New strategies in Firetrail, Spheria Global, Solaris Aussie Equity Income, a few examples. We have very large capacities in Antipodes in both the credit affiliates, Metrics and Coolabah, very large additional capacity that hasn't yet seen performance fees. A couple of large FUM capacity, Antipodes and Firetrail High Conviction, are yet to regain their high-water mark. Look, thanks everyone for bearing with me on the performance fee topic. I hope this section on the importance of performance fees in understanding Pinnacle's earnings potential was helpful and made sense to everybody. Just quickly, I'm running out of time. Some data that people look for in each of our reports. Slide 21 shows the historical growth of our FUM up until this 31st of December level of AUD 70.5 billion. Note that retail flows have been increasing even within this last half. It was AUD 600 million for the first three months, so AUD 200 million a month, and then AUD 1.3 billion in the last three months. That's averaging double the rate for that three-month period. Chambers, Andrew Chambers can elaborate. Our institutional pipeline remains strong and diversified with large inflows from both onshore and offshore. Slide 22, people look for, it shows the full detail by affiliate by six-month period of the funds under management of all of our affiliates. Slide 23 is the classic five-year and over long-term performance that we always produce. Pleasingly, 86% of our affiliate strategies that have a five-year track record or more have exceeded their benchmarks over the five-year period. The next two slides show shorter-term performance, one-year performance. Overall, our performance is good. There will always be a small number of affiliates which, for the time being, are underperforming for various reasons, which we can go into in the one-on-one meetings. The final section that I want to cover very briefly is titled Growth and Resilience. I'll leave it to you all to review these slides at your leisure, but they seek to make a couple of very key points. In our recent previous presentations, we talked a lot about how we've been building resilience and robustness in the business. You'll recall that we talked about the diversification of our affiliates and strategies, the increased diversification of those, the increased diversification of our client base by type, by geography, and so on, including offshore. You've heard us talking about the increased diversification of performance fee potential, which we've gone into a lot of detail today. We really hope that it's clear we've been very deliberately building robustness and resilience. We've also had a deliberate strategy to, at the same time, build multiple sources of continual growth based on an extremely strong platform. Now, the word platform is overused, but we believe we've built a platform with a reputation, a distribution capability, an infrastructure capability that lends itself to future major further growth. Just on slide 28, we've summarized this. We believe that we have now provided clear evidence of the success of our execution of this strategy. Growth and resilience have been simultaneously delivered, and we have an exceptional platform in place to enable us to move ahead with sustained growth from a proven business model and a proven business philosophy. We just say to you, the outcomes you're seeing now are not just an accident. We've had a very clear strategy that's got us to this point, and we believe that it can take us a long way further from this $70 billion fund mark that we've reached. The following slides elaborate this. I'll refer you to slide 32 in particular, which tries to explain what we mean by our platform for further growth. Look, there's more information in the slide pack. We'll cover probably some of these in questions, especially about institutional and retail distribution, or in the one-on-one meetings, or please read this at your leisure. Can we now please move to questions and thank you so much for bearing with my monologue. Certainly. Thank you, Ian. Ladies and gentlemen, just a reminder, if you would like to ask questions, please press star one on your telephone and wait for your name to be announced. Our first question comes from Tim Lawson at Macquarie. Please go ahead. Hi, gentlemen. Thanks for taking my questions. Just first question on the flows. Can you comment on the gross flows, just to understand, particularly on the institutional side? Yeah. That'll be a question for Andrew Chambers. I would just make the broad point, Tim, which I know you're very aware of and others are as well, that our market is a constantly moving feast, and there are changes occurring constantly, which means you will always have outflows, often due to reasons beyond your control. You need to be growing. If you're not growing, you're going backwards. Chambers, would you like to take that question? Sure. The gross flows are substantially probably larger than obviously the net flows. The really big feature which impacts those gross flows or rather bringing back to a net number is effectively client rebalancing rather than necessarily terminations going on within the business. The first component is institutional investors, both here in Australia, but also strategically abroad as well, is that institutional investors are becoming much more systematic about the way they add and trim to asset classes based on market returns. They set a strategic targeted weight for every single asset class, and those particular asset classes rally or underperform. They'll either add to those asset classes or they take money away from it based on the phase of the markets. The other component relates to the excess returns delivered by the manager. It's adding or trimming managers back to targeted weights based on their excess returns. We saw that case in the case of Hyperion, where there was trimming of their exceptional excess returns over and above their benchmarks back to strategic weights within portfolios. On the market return side, we saw that in global REITs, where global REITs didn't rally to the same degree as other market sectors within global equities. We've seen a lot of new money being put to work in that space. The gross returns are substantially high, but they often reflect a lot of view on the manager per se, beta view on the asset class and also systematic target weights as well. That's a really strong feature, which is we have a more pronounced both domestically here, but also with large institutional plan sponsors. Okay. That's helpful. Can you maybe link that commentary to how that's allowing you to manage capacity where you're maybe constrained and more generally just the sort of fee outlook given the channels of or geography of growth and the mix of retail versus trade? Yeah. The observation that I'd make is, we've built and continue to build a lot of talent density within our affiliates, distribution team, and management teams. This places us in a very competitive position to partner with the winners in the Australian institutional consolidation race. As asset owners attempt to both premiumize and also rationalize their active exposures in an environment where the herd of local asset management options are actually thinning. If you're a high-performing, for example, Australian equity manager, you have a lot more pricing power in the negotiation because there are fewer options available to you in the market, and the market is trying to embrace those best-performing managers. It also empowered a firm like ourselves to the degree we don't want to take on more capacity with a particular fund to recycle that capacity to its highest and its best use. The optionality provided both by our retail, institutional, and international channels to repurpose capacity and sell it into different channels to improve the yield of the business is substantially improved. You saw a lot of that in Hyperion, where a lot of the rebalancing which occurred out of the institutional market was recycled into retail. It's probably the best example you have to describe exactly that. Tim, we have a very conscious policy when we're running out of capacity in a particular strategy, and we have a number of those. We love our institutional clients, we always work with them, but we recognize there's so much change in the institutional market, mergers and in-housing of investment management and so on. We will, from time to time, get some capacity back from capacity-constrained strategies, and we'd love to take that capacity and sell it into the retail market, where obviously we get higher fees and it's a diversification of our client base. Okay. That's very helpful. Just maybe a question on the performance fee capability. I'm not sure whether you're willing to sort of discuss this, but if you were to think about a sort of through the cycle base fee equivalent that you think you're effectively giving up probably not the right word, but what you're sort of trading off, to get that performance fee potential, what do you think it would equate to at a base fee level? Tim, we've deliberately decided not to give our sort of forecasts of our performance fees and so on. We thought we'd give you all the information and then that it's up to the judgment of investors and analysts such as yourselves to decide. You're right. Whenever we agree a performance fee with a client, the base fee will be substantially lower than it would've been if it was base fee only. We're only going to do that if our expectation is that on average, we would earn higher fees from the performance and the base fee together than we would've in a base fee only situation. I wouldn't put a number on it, but at least sort of 30% would be our expected higher fees. That won't be in every period, but on average, that's what we would expect. You can look at the AUD 23 billion of FUM that we have subject to performance fees, go through that and say, what's the normal base fee that would normally be charged if it was base fee only on that strategy? You can say, oh, well, however much lower the base fee will be, and it's often substantially lower, but we usually have a base fee as well. Add a margin to that base fee foregone, if you like, to get our expected average performance fees. It's got to be material when you're talking AUD 23 billion subject to performance fees. Our base fees have floated up. Our base fees, excluding any performance fees, have floated up in recent times. Notwithstanding the performance fee pressure that people talk about, because we've grown our retail FUM and, to be honest, our overseas FUM, like for like, is at higher fees than domestic insto. Our average base fee rate is floating up, but our performance fee potential is much larger on top of that. Okay, that's very helpful. Just a couple of quick questions to finish from me. You called out the fact that there was obviously no LICs or LITs in terms of current conditions. What are you looking forward to that opportunity to open up again on the retail side? Look, I think it's still fairly early days since the payment of commissions, if you like, on LIC IPOs was banned. It remains to be seen on what sort of replaces that. The one thing I would say, we have a number of very large and successful LICs out there, and I would expect that we should be able to do top-ups of those. This is like PL8, Plato Income, Metrics, LICs, and so on. I'd say the jury's still out a little bit, to be honest. We're all furiously sort of merging our listed and unlisted or some of our listed and unlisted funds. Magellan have been very public about that. We're doing that to some extent as well. My own view, and I'm not sure whether Ramsin would have a different view on this, but my own view is that it remains to be seen how that will all go going forward. We are very clear there's demand for listed. We're launching a Hyperion Global ETF because there's very strong demand for that. Listed won't go away. It will be growing as well as our unlisted. It remains to be seen, Tim, I think. Okay, last question. We've also, I'll just sort of mention our Palisade had launched into retail. Retail investors have wanted to get access to infrastructure, and they've offered a new retail fund that'll be a couple of hundred million dollars, but that's in an unlisted form at this stage. I think you'll see a lot of innovation in listings. Yeah. Then just last question from me. There's been a few sort of small changes in the ownership percentage of PNI in the period. Probably not surprising there's not that much movement at the moment, but just any comments on the outlook and the way those economics work. Yeah. We put a lot of emphasis on succession and long-term planning for succession and the bringing through of younger people and being ready for when a founder might be ready to retire. We've done that several times. From time to time, the opportunity comes up for some equity to be available and oftentimes we will buy that. Now we're very happy to sell it to emerging executives when the time is right, but sometimes we feel it would be happy for us to keep some of that equity. Over time, as the value of executive equity goes up and we recycle, you need less percentage equity to have the same incentives impact for individuals. It's quite possible that over time our equity interest will float up. We are very happy with the price we pay when we do that. We'd always love to own some more of our affiliates, but we don't ever want to pressure the executives for us to take more. We love executives having lots of equity in affiliates because they're so incentivized to do a great job, and we all prosper together. You'll see those percentages move around as that process continues, Tim. The other thing that could happen, several of our affiliates are looking to expand with some acquisition opportunities. You could see us being a capital provider to an affiliate to buy something. In that case, we'd be likely to buy extra equity in the affiliate and our equity percentage could go up. We'll look at those opportunities as they make sense. Okay. That's it for me. Thanks for taking my questions. Thanks, Tim. Our next question comes from Scott Murdoch from Morgans. Please go ahead. Morning, Ian. Just a couple if I can. Just firstly interested in the band of six or so managers that are still early stage of loss-making. Are there any there which you can point to that are getting some traction, I guess from a distribution side and close to sort of getting some flows? Absolutely. Thanks, Scott, I think people are aware that this is something we do a lot. We love building new affiliates because we think we get a fantastic return on the early cost to us. We do have a range of those. To some extent, a couple of them have probably been held back by the COVID crisis. Still we're very pleased with the way they're going. I would call out Aikya, only very new, sort of less than a year old. We've got our early, I think it's in the tables there, over AUD 200 million of FUM already to them. That means they're away. That's very early. That's fabulous. Chambers team has done a great job. The Aikya team are very well respected. That's a new affiliate build that's away already. Longwave has its early FUM already in and early ratings, and it's clearly on a trajectory to go very well. We've got other prospects for the Riparians and so on. Yep, as always, watch this space for our emerging, not yet profitable affiliates to get to that point of profitability. Okay, thank you. Just a couple of questions around the flows. I guess the insto pipeline you've stated there remains strong. You've said that in the past and it's come through. Just understanding conversion timing is definitely unknown, but just interested in how that pipeline compares to previous periods, and if you can give us a little bit of a snapshot on the couple of funds that are attracting the most attention. Andrew Chambers is best to answer that. I certainly highlight that conversion times certainly since probably around April this year have started to accelerate with stimulus in the market. As mentioned before, a component of our pipeline was deferred and then now crystallized broadly across the board. There is still a substantial component of that pipeline which is still yet to be realized. If you look at the sales pipeline, you're typically looking at a period around up to three years. There are things which we started two years ago, which are still yet to crystallize in any shape or form. The pipeline remains as strong as I've ever seen as a business on the institutional side. We also have more institutional salespeople in different jurisdictions around the globe. We'd expect that number to also be larger. We also have more affiliates as well, adding to that. My view is that we should continue to see the same growth across the institutional book, both domestic but also international channels. The real feature of growth for our business has been the rise of our international business. If you look at our net flows over the last half, 50% of the flow came from Australia and 50% came from outside of Australia. If you look at our international FUM today, it's up 275% over the last three years. Over AUD 6 billion across 28 countries outside of Australia. Top five being U.S., U.K., United Arab Emirates, New Zealand, and South Africa as well. With such a large contestable market, I think that we have reasonable confidence that our capacity to continue raising capital for global products with global investors, notwithstanding the challenges in the domestic institutional market. Thanks, Andrew. I might just follow- up question on that offshore presence that you mentioned there, because it's really interesting. Is the investment in offshore distribution, and I guess maybe for Ian, I guess focus on affiliates that are located offshore, is that largely done, or are we going to see a lot more focus in offshore markets going forward? Yeah. We're very excited about the potential from offshore investors. It's not across all of our strategies, but we now have a pretty substantial number of strategies that are of interest to offshore investors and we really know how to tap those investment pools. I see further growth offshore. Shane Bell and his team do a lot of work out of Australia and Haj now for Japan, does a lot of work out of Australia. We're pretty productive. We don't need an army of people overseas, and we tend to wait until we can see the success prospects before we add resource. There's no doubt. We added Allison in New York, we added Haj in relation to Japan. We will progressively add more people overseas. I think that's a fair statement to make which Chambers just said as it makes commercial sense. Quite a few of the affiliates that we're selling offshore are Australian-based. Just because Hyperion is Australian-based doesn't mean we can't sell it overseas. Antipodes we can sell overseas. Clearly, ResCap we've sold big time overseas. A number of newer strategies coming forward will be for offshore clients. Reminiscent, for example. I think Riparian will get quite a lot of their money from offshore. Offshore is not a flash in the pan. It's growing and we've hardly tapped that to date. Okay. Thanks, Ian. I'll get back in the line. I'll allow others to ask questions. Thank you. Thanks Scott. Our next question comes from Nicholas McGarrigle from Ord Minnett. Please go ahead. Good day, well done on the result. It was a really strong outcome beyond the performance fees. Looking at the affiliate contribution excluding performance fees, revenue was up 18%, profit was up 18%. Can you give us a sense of the ins and outs on the operating leverage? I would have expected to see a bit more. Is that just because of the loss-making affiliates bringing down that overall profit growth? It moves around, Nick. As a general statement, there's no question we have a lot of operating leverage potential across a range of our more mature affiliates. I would say, and we encourage this strongly, a substantial number of our affiliates are adding new strategies or planning to add new strategies, quite a few of which are not yet announced, and they are taking on extra people to do that. If we had time, I'd go through them all. Quite a few of our affiliates have been adding people. We're very happy for that to happen. We see that as an investment. It does retard their profitability in the short term. Very comfortable with that because the return they will earn on that investment will be huge. That's going on to quite a significant degree. It is true that the not yet profitable affiliates, their negative numbers goes into our share of overall affiliate profits, and so that is an issue. I make no apologies for adding new horizon to affiliates because if there are attractive opportunities, we love to do those. You'll see more. Operating leverage, we don't say we must achieve a certain amount by a certain time. We just try to help our affiliates to make rational decisions on resourcing on an ongoing basis. You get a spurt in it sometimes, and then it doesn't go up as much, Nick. There's just a lot of swings and roundabouts in that. It's pretty clear that the base level of some of our affiliates has moved up to a whole new level, and you don't need to add people, just as you get more funding to existing strategies. Generally, you don't need to add a lot of people. That creates a higher base going forward. There are a few, like Metrics added a lot of people ahead of growth and some of the things they had planned are delayed. They didn't get their AUD 500 million LIC raising, and some of their inflows are still yet to come. They've added people ahead of growth. There's quite a lot of addition of resourcing within affiliates for further growth. Cool. The total flow number of AUD 5.5 was impressive. The ins and outs, obviously, amongst that. I'm sure that there were some outflows across institutional and potentially retail that maybe have turned in terms of momentum. Can you give us a sense on what some of those larger reallocations away from asset classes or styles were? Because obviously, they won't repeat into the next period. Probably, Andrew and Ramsin should talk about those. We have called out that ResCap had some outflows over the last two or three years from Aussie insto, which has all been redeployed into retail and offshore. In this half, as Chambers mentioned, there were certainly some Hyperion Aussie equity institutional outflows, and we're getting retail inflows into Hyperion, both Aussie and global, at a great rate. It's a very attractive process for us. The numbers are fairly large. As I mentioned, there's churn. There will always be churn, especially in the Aussie insto market. Yeah, I'd say that, just adding to that. The two biggest ins and outs, if you will, first on the valuation side was in the area of global REITs, as I highlighted previously. There was a view on the asset class that was undervalued relative to other segments of global equities. That's on the inside. On the outside, there was a lot of rebalancing away from the likes of Hyperion, in particular, based on their phenomenal excess returns relative to their benchmark, rather than the view on Australian equity or global equities. Those are the two big extreme factors in terms of rebalancing going on within the book. From a retail perspective, Antipodes, perhaps 12 - 18 months ago, was somewhat performance-challenged. As value slowly begun a turnaround and Antipodes has really increased its target market activities, we're seeing the level of outflows in retail slow down markedly, and so that capability is turning around. Perhaps the small cap managers like Spheria, things have slowed down a little bit, but given their performance has picked up markedly in Q4, the flows are starting to turn around. Overall, the inflows is pretty much, high flow might slow a little bit in terms of the quantum of net inflows. As soon as the performance turns around, we see flows turning around as well in the channel. It's all looking pretty upbeat from a retail perspective. Okay, great. Just in terms of Horizon 3, it's been a tumultuous market, probably shows some asset managers who run their own businesses probably determining that it's a bit hard running a business as well as running money. Have you discovered opportunities on Horizon 3 that are beginning to look attractive, potentially that might sort of come through this year? We don't talk about things that we're looking at and we're pretty careful, Nick, as you know. We have continued to call out that Horizon 3 is an important element of our growth agenda. We've looked at quite a few things that we haven't ended up proceeding with for one reason or another. You know that our criteria are pretty tough. We're only going to do Horizon 3 when it's really attractive. We've called out that we think we've got a track record of doing Horizon 3 well. ResCap we did 10 years ago, and I think their FUM was about AUD 2 billion at the time, and now it's AUD 12 billion, and we've helped them to grow a lot. We did Metrics a couple of years ago and they've grown. We're very happy. Coolabah has grown, I think, from AUD 3 billion- AUD 5 billion in the year or so that we've owned them. We think we have a track record of doing Horizon 3 well. We've always said we will not put ourselves under pressure that we must do a certain number of them by certain date. But, and we said we'll only do them if they're synergistic. We do believe, this is what you're saying, Nick, that this environment, there are likely to be, say some fund managers out there that aren't doing as well in distribution as they'd like, and we could add value to distribution or fund managers might have succession challenges or whatever kind of challenges where we think we can help. We can buy into them and grow them and grow their profitability. Just the last one for me. Yeah, sure. Are there any asset classes that offer attraction? You've already got a really diverse portfolio, but is there anything particularly that you're finding? I know that you won't go out and target a specific asset class, but are there certain ones that are offering attraction on the acquisition side? Yeah. Again, apologies for being vague, there are a range of asset classes that we'd like to participate in, as well as sort of what we call adjacencies to existing asset classes that we're in. There's a significant range of opportunities. We don't tell you what they are because people start figuring out who we're talking to and so on. Even though it looks like we've got 15 affiliates with a lot of asset classes covered, there are subclasses, there are adjacencies, and there are other asset classes that we're not yet in. It's a rich opportunity set for us out there. Great. Thanks for taking the question. You're welcome. We have one final question in queue from Sudipta Ghosh at Wilsons. Please go ahead. Hi, Ian. Just a quick question on margins at the affiliate level. There looks like there was a bit of a pickup this half, roughly 42% compared to 36%, in the PCP. Appreciate there would've been some natural cost savings because of COVID as well as some leverage from higher FUMs and the performance fees. I just wanted to understand what component of the margin expansion was driven by cost-related factors. Yeah. Thanks, Sudipta. Certainly we've been careful with costs during the last year. We've had some cost savings in travel, office accommodation, et cetera. They've been meaningful. We've been very happy to have them, they're not particularly large in the overall scheme of things. We very deliberately maintained our capabilities. We didn't lay anyone off or whatever. I wouldn't say the cost outcomes were particularly abnormal. I think our margins, they'll move around, just depending on what particular strategies are growing and so on. I've mentioned the overall trend is that more retail and more offshore, by and large, brings improved revenue margins offsetting some ongoing, always, fee pressures. I think in Pinnacle Parent, we've had revenue boosts from our larger net inflows and so on. That was helpful for margin. I think the Pinnacle Parent margin, the revenue grew a fair bit and our costs didn't. In affiliates, it just moves around a bit. I think people should think of our margins sort of floating up on the revenue side and growing consistently over time from operating leverage in our affiliates. That's the way I think about our margins going forward. If you had a particularly large increase in margin this half, I think it was just a little bit random, to be honest. Mm-hmm. Okay. Except in Pinnacle Parent where Yeah. Yeah. Just a final question on flows. You talked to deferred flows, particularly in insto. Have those deferred flows largely been executed or realized in the first half, or is there more to come, particularly in that deferred pipeline that you talked about in the second half as well? Andrew? Yeah. The answer is that some of it's crystallized, but not all of it. The reality is, as I mentioned earlier on to Scott, you typically have up to a three-year pipeline where an opportunity starts to where it necessarily converts. Some obviously convert faster than that. Some of those processes are still very much live. We've also then replenished that pipeline with new opportunities since then, because a lot of new search activity's emanated from the experience of the pandemic and the drawdowns in the market and the continuing fall in global base rates around the globe. I would say that we've partly crystallized that pipeline, but not fully, and we've replenished it subsequently, such that it remains relatively full on a forward-looking basis. Great. Thank you. Pleasure. Thank you. We have no further questions, so I'll hand back to Ian for final comments. Thank you. Look, my final comment would simply be thank you so much to everyone for coming on the call. Thank you for bearing with us as we've sought to articulate things like performance fees and growth and resilience at the same time, and the platform that we have for future growth. Clearly, we always say we don't know what lies ahead. There are always a bunch of worrying things out there. All we can do is tell you how things are at the moment and how our capabilities are set. We feel that we're very well-positioned. We feel great about our company, we're confident we can keep growing. If there's any further adversity ahead, we're confident we can cope with that as we have with the crisis. We're feeling good, and we're very grateful to the analysts and shareholders for joining us. Thank you so much. Ladies and gentlemen, that does conclude the call today. Thank you so much for attending. You may now disconnect.