Good day everyone, welcome to Petershill Partners Full Year 2022 results call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. I'd like to advise all party that today's call is being recorded, by remaining on the line, you are representing to the company and Goldman Sachs that you are located outside of the United States and are not a U.S. person, as defined under Regulation S of the U.S. Securities Act of 1933. You are a qualified purchaser as defined under the U.S. Investment Company Act of 1940, and that you are not located in or resident of any jurisdiction where to attend this conference call would constitute a violation of the relevant law of such jurisdiction. I would like to hand the conference over to Gurjit Kambo, Head of Investor Relations at Petershill Partners. Please go ahead. Good morning, everyone. I'm Gurjit Kambo, Head of Investor Relations of Petershill Partners. A very warm welcome to you all, thank you for joining us today to discuss Petershill Partners' full year 2022 results. Before we begin, I'd like to remind you that during this call, we will make a number of forward-looking statements which could differ from our actual results materially. Petershill Partners assumes no obligation to update these statements. A replay of today's call will be available on the investor relations section of our website, along with a copy of our preliminary results and presentation. Petershill Partners commenced conditional trading on the London Stock Exchange on September 28, 2021, on which day the initial acquisition of the portfolio of partner firms by the company was completed. Prior to this date, the company did not trade and therefore does not have reportable results. For completeness and transparency, the full year 2021 comparative results include operating metrics for periods prior to the initial acquisition date, presented as if the company's assets following the initial acquisition of the partner firms had been owned by the company during the historical periods presented. Presenting today to discuss the company's full year 2020 results are Ali Raissi-Dehkordy and Robert Hamilton Kelly, co-heads of the Petershill Group at Goldman Sachs. After the speaker's presentation, there will be a question and answer session. With that, I'll turn the call over to Ali. Hello, everyone. I'm Ali Raissi-Dehkordy, co-head of the Petershill Group at Goldman Sachs, the operator of Petershill Partners. Thank you for joining as we present our first full year of earnings since the IPO in September 2021. Turning to page 3. We've delivered a resilient set of results in a challenging and uncertain market environment and believe these results demonstrate key characteristics of our company in terms of quality of our partner firms, diversity and resilience, strong relative performance, capital returns, and successful delivery of our M&A goals. To speak to quality, we are particularly pleased by the strong $60 billion asset raising during 2022 and the 23% year-on-year growth in fee-paying AUM to the end of the year at $194 billion. You'll note the backdrop of the challenging fundraising environment that this was set against, importantly, that this represented circa 4% of industry capital raised last year against a stock of 2% of industry AUM. A positive observation to our company's growth during market growth periods and more challenging periods where firms compete for market share. Partner fee-related earnings grew to $213 million, up 1%. The modest growth reflected management fee growth despite lower transaction fees, offset by higher expenses reflecting investments in the team and talent at our partner firms, as well as the impact of the broader inflationary environment and fees turning on later in the year in 2022, all of which Robert will elaborate in further in the financial section. We delivered strong Partner realized performance fees of $132 million, up 2% year-on-year. This is particularly impressive against a strong 2021, which saw record realization activity and performance fees for the industry. Exceeding this in a year marked by lower industry-wide activity and generally tougher macro environment illustrates the distinct strength of our diversified business model. In our first year with a full P&L, Petershill Partners' profitability is clear with an adjusted EBIT margin of 89%, and we delivered a full year adjusted EPS of $0.237. On the back of these results, the board has proposed a final dividend of $125 million or $0.11 per share, resulting in $165 million of total dividend for 2022. Combined with $50 million of buyback that's completed, the total return to shareholders stands at $215 million in 2022 or $245 million since the IPO. The board intends to launch a $50 million share buyback program for 2023 while maintaining sufficient capital for strategic opportunities and preserving a prudent balance sheet. This buyback represents a compelling opportunity to return value to investors while also effectively buying into a stable of high quality partner firms that Petershill Partners represents. During this presentation, we'll start with an update on our strategy before looking in detail at the performance during 2022 and outlook for the year ahead, open up to Q&A. On page six, I want to spend a moment to speak to the nature of our business. One, our company provides investors diversified access across 25 engines of growth. Our 25 partner firms operate predominantly in the private markets across all asset classes. Two, we have partnerships with independent high-quality firms that are profitable and have a proven track record of returns and growth. Three, we have a resilient business model with high proportion of recurring revenues, attractive fee-related earnings margins, and strong cash generation. Four, our partner firms are well-positioned across multiple market cycles with long-term lock-up capital, with average weighted duration of 8.9 years, but also diversification across multiple sectors, strategies, funds that provide an ability for performance across the market cycle, as evidenced by the PRE generated in 2022. On page 7, I wanted to highlight the Petershill Partners business model. Petershill Partners provides access to partner firms that have delivered AUM growth ahead of the alternatives industry, with PHP delivering 28% AUM CAGR between 2018 and 2022, almost twice the circa 14% delivered by the alternatives industry as a whole. Petershill Partners has a high proportion of recurring revenues, 69% of total revenues in 2022, reflecting the long duration of capital at close to 9 years. Our strong cash generation and cash position provides financial flexibility to offer attractive capital return to shareholders and continue to deliver on our targeted inorganic growth strategy, which has seen acquisitions and follow-on investments since the IPO of around $640 million invested in targeted growth areas such as healthcare private equity, secondary for venture capital, distressed and value-oriented tech investing, private credit, and private real assets. On page 8, I wanna share a few highlights across our partner firms. In a challenging fundraise environment, it was encouraging to see Francisco Partners close on nearly $17 billion of new capital, which we expect to begin generating fees in 2023. Clearlake raised more than $14 billion for its seventh flagship PE fund. On page 8, I wanna share a few highlights across our partner firms. In a challenging fundraising environment, it was encouraging to see Francisco Partners close on nearly $17 billion of new capital, which we expect to begin to generate fees in 2023. Clearlake raised more than $14 billion for its seven flagship PE fund. SLR, one of our new partner firms acquired in 2022, focused on private credit, raised $2.2 billion of equity commitments for its direct lending strategies. Set in the context of a slowdown in overall private market fundraising, this fundraising represents notable differentiation, with firms raising above targets and on or ahead of schedule. Importantly, diversification across 10 firms who raised capital last year, a strong demonstration in a challenging fundraise environment. More importantly, generally speaking, these firms are amongst the strongest mid-market participants in each of their respective sectors. A core Petershill playbook where we seek high quality, ambitious firms where there's clear path for growth, demonstrated either by much larger peers, as might be the case for Arsenal or a compelling market opportunity, as we see for private credit or private equity healthcare, or where we see dislocation that may create great opportunities going forward, as we see for Industry Ventures in secondaries. The footprint of our largest 5 firms covers around $92 billion of fee-paying AUM, with funds across private credit and equity, macro, private real assets, and infrastructure investing, with our 5 smallest firms totaling around $8 billion of fee-paying AUM in comparison. On page nine, looking at diversification at the underlying partner firm level, our 25 partner firms each run multiple vintages of funds over different time periods, with a total of over 220 funds, implying an average of almost nine funds per firm. This gives us diversification across brands, firms, funds, strategies, and vintages. As you see from the capital raising chart, Petershill Partners has benefited from partner firms who have raised capital in every single vintage and year for the last decade. We think this stands out, particularly as you see how this translates to diversification across vintages for our business. Performance and quality of our underlying partner firms were critical drivers in our asset raising success in 2022. In a period of greater bifurcation in a market where strong and well-positioned firms had the opportunity to outperform and where investor selectivity effectively meant market share was being won with capital raised. To turn to page 10. We build on our diversification through an active CapEx-like M&A process, which allows us to target growth and use capital in areas where we believe we can deliver long-term value and diversification. Looking at the acquisitions in more detail, we've been delivering on our acquisition strategy. In aggregate since the IPO, we have now invested a total of $638 million across 8 transactions. Given the market backdrop, we have been more selective and reduced the pace of acquisitions in 2022, with 3 acquisitions totaling $180 million in commitments. Importantly, tapping our ability to invest in follow-on capital in our successful partnerships. The new investments in 2022 were in sectors that we specifically identified as some of the more attractive sectors for future growth, including healthcare private equity, real assets, and private credit. One point to note is that Petershill Partners generally makes these new acquisitions alongside the Petershill private equity funds, which will result in a lower blended ownership for new transactions, but with the same governance rights and non-control protections, and importantly, reflecting the same high cost of capital as our private investments. To turn to page 11. Our acquisition strategy benefits from a differentiated ability to source new partnerships. Our value-added work to help our partner firms achieve their strategic goals is a differentiated offering and a critical factor in sourcing new opportunities, particularly when we seek ambitious management who are seeking ways to compound the value of their own interests, given they continue to own the majority of their firms. We leverage our GS footprint in several ways. One, our ability to source and acquire interest in new high quality portfolio firms with approximately 70% of our partnerships being sourced exclusively and bilaterally. Two, we leverage proprietary data for insights, analysis, and evaluation of new potential partnerships and target sectors. Three, adding value to our existing partner firms through our GP Services business. GP Services is our operating partner platform within the Petershill business, where we work with management teams of our partner firms on growing and developing their businesses. Importantly, the GP Services team also helps to position us as an attractive partner for new acquisitions as our partners become our advocates. During 2022, we delivered on 314 projects in aggregate across a broad categories of capital and product development, portfolio company services, and operational improvements. Turning to page 12, I wanted to elaborate on our robust governance and alignment with shareholders. Starting at the top, we have a fully independent board and a formal operator agreement that manages any potential conflicts of interest. Our operator charge is aligned to partner firm profitability and a profit share linked to the performance of new acquisitions undertaken. Finally, we see strong alignment of the operator and its management with shareholders through the private fund carried interests, which are linked to Petershill Partners share price performance, where it is the largest single asset owned. Two, GS and the team's indirect shares held in Petershill Partners through the private funds. Finally, three, the direct shares acquired by management since the IPO. On page 13, we wanted to share some medium-term growth metrics. Our partner firms delivered 28% AUM and 24% fee-paying AUM growth on average per annum between 2018 and 2022, which helped drive net management fee growth of 32% and FRE growth of 29% over the same time period. Including realized performance fees and investment income, partner firm distributable income delivered average growth of 36% between 2018 and 22. Testament to the strong asset raising in 2022, the $60 billion of partner firm fundraising accounted for almost 4% of industry AUM raised, double the partner firm's share of industry stock AUM, around three times the amount of capital raised by our partner firms in 2021. Page 14, we compare the delivery on our key metrics in 2022 versus market expectations at the time of our IPO. The key takeaway is that our growth and profitability has exceeded expectations set out at the time of the IPO during more benign market fundraising, credit, and inflationary environments. Partner firms have comfortably exceeded AUM growth expectations, whilst FRE is lower, this reflects some of the headcount and cost increases associated with firms expanding their footprint, as well as wider inflationary pressures now versus at the time of the IPO. We have delivered stronger overall adjusted EPS growth, which, coupled with our balance sheet strength and outlook for the business, has driven a 51% increase in capital return versus expectations at the IPO. Before I turn over to Robert to run through the financials in more detail, I wanted to highlight how we have progressed versus our targets set for 2022. To begin with, I would highlight the market backdrop has turned out to be more challenging than we would have anticipated at the time of the IPO, and I believe in that in the context, we have made particularly strong progress and hopefully illustrated the core elements of diversification, quality, and resilience to our company model that we spoke about at the time of the IPO. 2022 resulted in $60 billion of gross fee-paying AUM raised against our initial full year guidance of $40 billion-$45 billion. Petershill Partners is highly profitable and achieved an adjusted EBIT margin of 89% in 2022, the top end of our guidance. We completed 3 new investments totaling $180 million in 2022 within the middle of our range of $100 million-$300 million per annum for M&A. Strong capital return with $165 million of dividends for 2022 in addition to a $50 million buyback that's completed. With that, I'd like to hand over to Robert to review our full year 2022 results in more detail. Thanks, Ali. This is Robert Hampton Kelly, co-head of the Petershill Group at Goldman Sachs. On page 17, management results are the most important metrics for us and what we focus on in running our business, and they reflect the true operating performance of the company. They strip out non-cash IFRS line items. We start with partner FRE at $213 million, up 1% year-on-year, reflecting higher management fees despite lower transaction fees net of offsets than in 2021, and an increase in partner expenses, which we'll cover in more detail. Partner PRE of $132 million was up 2% year-on-year. A very strong number given the drop in capital market activity between 2021 and 2022. Total income or Partner Distributable Earnings of $370 million was down 3% year-on-year, reflecting lower realized investment income. After operator and corporate operating costs, we had $336 million of adjusted EBIT for 2022, an adjusted EBIT margin of 89%. Adjusted PAT for 2022 was $273 million with adjusted EPS of $0.237, with total dividends for 2022 of $165 million. Notably, this is the first year where we've had a full year P&L. This helps one of our strategic goals of improving the broader understanding of the financials of the business. As you can see from the page, we think of the core business as relatively simple in its P&L and cash flow generation. As a note, we also had $19 million of non-recurring exceptionals, predominantly relating to the prepayment of old debt and legal fees, which we show at the bottom. This is reconstituting the debt structure from pre to post-IPO in a more appropriate form. Would not expect this magnitude of charges in future. On page 18, strong AUM growth is reflected in both total AUM up 21% to $283 billion and fee-paying AUM up 23% to $194 billion. This is set in the context of an approximate 10% slowdown in global fundraising in the year. We think of this as a strong reflection in the quality of our partner firms. Total AUM is an important metric for performance fee generation and fee-paying AUM for FRE growth. $17 billion of capital raised in 2022 came from Francisco Partners, which we expect to become fee-paying in 2023, coupled with $20 billion-$25 billion of expected asset raising in 2023, which should support future FRE growth. On page 19, partner management fees increased 11% year-over-year in 2021, with a management fee rate of 141 basis points in line with our expectations for the year and above our five-year average of 136 basis points. The reduction in net management fee rate year-on-year reflected first lower transaction fees, net of fee offsets, which were $10 million than in 2021 in aggregate. Secondly, business and asset mix. For example, strong growth in private credit at some of our partner firms. Blended FRE ownership was lower at 13.5% versus 14.2% in 2021, as expected, due to lower ownership stakes and new acquisitions undertaken with the private Petershill vehicles, as well as strong growth in the number of PE firms where we have blended FRE ownership of under 10%. On page 20, FRE of $213 million saw a modest increase year-over-year, reflecting management fee growth despite lower transaction fees net of offsets, which we discussed, and our higher partner firm costs, which I'll walk you through. Our partner firm costs increased from $95 million to $129 million. We can attribute around $7 million of the increase due to the impact of acquisitions, and we incurred a $4 million partner firm non-recurring tax adjustment for the prior period. Costs excluding acquisitions and the $4 million were up 24% or $23 million. Our partner firms were not immune to the broader inflationary pressures seen across the market. Our firms also had a 20% increase in headcount during the year. You can see part of this is investing in resources alongside AUM growth. In addition to the increase in headcount, we also had firms expand and open new offices to accommodate their growth in AUM and expected future deployment. We provide a bridge between the change in our FRE margin during 2022. We highlight approximately 4 percentage points of decline attributable to the higher compensation costs, 1 percentage point relating to non-compensation costs, and 2 percentage point impact from higher FRE-related taxes versus the prior year. Turning to page 21, against a challenging market backdrop and a tough comparable period for 2021, we're extremely pleased that our high-quality diversified portfolio continued to generate good investment performance. Partner Realized Performance Fee Revenues were particularly encouraging at $132 million, up 2% year-over-year versus a strong comparable 2021. Our largest contributing asset class was private equity, while absolute return performed notably well in Q4. Investment performance remains robust with accrued PRE of $611 million at the end of the year. This doesn't run through our P&L until realized, but is a good leading indicator. In the bottom right chart, you'll see a steady increase in performance fee-eligible AUM to $256 billion, which also supports future potential PRE generation. On page 22, you can see our balance sheet is dominated by the fair value of partner firm investments, which we fair value under IFRS. This gives a book value of $5 billion or $4.16 or 344 pence per share. In the appendix, we have more detailed breakdown of the values of the notes to our financial statements. I'd note most of that value is in private capital firms. We look at these on a mix of multiple and discounted cash flow basis. For fee-related earnings, we use a weighted average discount rate of 13.4%, up from 11.3% at the end of 2021. For performance-related earnings, we use a weighted average of 23.9%, up from 18.7% at the end of 2021. The decline in the holding value of the private market assets was driven by this increase in discount rates from 15% to 17%, while operational performance and outlook remained unchanged in the aggregate. On page 23, turning to our cash position, we had significant cash of $581 million or $341 million pro forma for all the remaining deferred acquisition costs. During 2022, we completed the successful private placement of $500 million of senior unsecured debt raised across 7-20-year ten years, extending the weighted average duration of our debt to approximately 11 years. While we don't look to time these things too perfectly, we're particularly pleased to have locked in a 5.6% fixed cost to this debt given the rate environment, and believe the rating, pricing, and duration reflects the long-term confidence of our creditors who have invested with us before. On page 24, Petershill Partners is highly cash generative, and our capital allocation can support our progressive dividend policy, finance growth, and provide optionality for future capital return. It's overseen by our independent board. Significant capital return of $245 million since the IPO and $215 million in 2022. We continue to see good opportunities for the $100 million-$300 million of annual CapEx like M&A, and maintain our leverage target of under 1.5x last 12 months EBIT for long-term planning and capacity to go up to 3x last 12 months EBIT for acquisitions. We focus on capital efficiency and so maintain our progressive dividend policy and intend to launch a new $50 million share buyback program for 2023. The company is underpinned by this excellent free cash flow generation, that gives us flexibility and efficiency in our financing. With that, I would like to hand back over to Ali. Thank you, Robert. Before closing, I will make a few comments on the market environment and on our strategic goals. We have clear strategic goals for 2022. We aim to continue to support partner firm development and growth via a robust and proven framework for our value-added GP services. We aim to continue to identify and evaluate attractive acquisitions and access the fastest-growing areas of the alts industry where we can be the most impactful with our capital. We aim to be highly efficient with a focus on returns for shareholders, which we demonstrated in 2022 through a return of $215 million of capital. More broadly, I'd note that having reported our first full year of results post the IPO, we continue to have significant focus on broadening and deepening market understanding of the company. On page 27, we'll spend a moment to talk about some of the key themes that we see going forward. While macro uncertainties persist, our business is well positioned both geographically with a focus on North America, and our revenues primarily driven in U.S. dollars, and in terms of structure and exposure with our 25 engines of growth through our partner firms. Private market fundraising and investing has continued amid higher uncertainty with 2022, the second best fundraising year on record. Although this was clearly a nuanced fundraising environment representing considerable challenges to some market participants with delays and reductions in capital raising goals, we expect this to continue in 2023. We are, however, pleased that our partner firms have exceeded our asset raising guidance and grown faster than the industry. We believe that this is a strong endorsement from increasingly selective LPs. If you take a medium-term view, outlook for industry growth remains encouraging, with Preqin estimating private market industry AUM to reach over $18 trillion by 2027 from around $11 trillion today. It's important to note that this growth stems from private markets playing an increasing role in the financing of the real economy, where many business owners and management teams prefer to operate privately. This drives an expanding opportunity set for our firms. Periods of market dislocation can create attractive opportunities for asset managers with dry powder. History shows deals done during a downturn have generated superior returns over time. More importantly, on page 28, we believe that Petershill Partners has been built to be well positioned in changing fundraising and operating environments. We first showed this slide in the first half of 2022, and while the challenges remain, some of the focus points have clearly moved in the second half of 2022 and early 2023. We have spoken at length around fundraising. Diversification across strong partner firms means no reliance on a single raise or firm. Our largest underlying fund continues to represent around 5% of AUM. Anecdotally, it also means that one of our partner firms completely missing their largest fundraise in a year would be economically equivalent to a single firm's largest fundraise being delayed by a few weeks. We think that this diversification and resilience is a really important point. The long-term FRE centric model provides resilience against challenges to realizations or performance and gives visibility to most of our revenues. Exposure across macro real assets credit speaks to a resilient model, well-positioned for inflation and rising rates, and allows performance-related earnings generation across the market cycle. I'd also note that our acquisitions since IPO have been targeted in further enhancing our position and exposure to areas where we believe are well-positioned for the current market environment. The potential GDP decline in Western economies has highlighted the importance of recession risks that we face today. Petershill Partners benefits from 91% of its AUM headquartered in North America and risk management through a diversified footprint of exposures, with the majority of our revenues and costs being US dollar denominated. On page 29, as we have noted, while there's been a nuanced fundraising environment, we expect it to continue to present challenges. We believe Petershill Partners approach diversification, the partner firm quality, and resilience has been a differentiator in 2022. For 2023, we reiterated our previous guidance of $20 billion-$25 billion of organic gross fee-eligible AUM across more than 10 partner firms. While it's tougher to assess potential realizations in fee-based AUM, we maintain our previous guidance of $5 billion-$10 billion of realizations. Moving to page 30. To conclude our outlook and guidance for 2023, we reiterate our company headline guidance. In addition to asset raising guidance, we maintain guidance for acquisitions of $100 million-$300 million per annum, corporate adjusted EBIT margin guidance of 85%-90%, and our progressive dividend policy. Also reflecting on a full year of results, we're simplifying our FRE guidance by providing an absolute dollar million range of $220 million-$250 million for 2023, which will achieve the same objective versus providing the individual components to derive the FRE range. We expect our net management fee rate, partner FRE ownership, and partner blended FRE margins to broadly remain stable against 2022. It's worth spending a moment that on the whole, we're not experiencing any decline in like-for-like partner firm margins, but rather a change in the mix and relative contribution of partner firms, each with different expense margins to the overall mix. Last year, 10 of our partner firms raised almost 20% of new fee-paying capital. As you can expect, this changes the mix of partner firm businesses between 2021, 2022, and 2023. We reiterate our medium-term guidance on PRE to represent between 20%-30% of total partner firm revenues. Moving to page 31. To conclude, 2022 highlights the benefits of our diversified model and that Petershill Partners was able to demonstrate market growth and market share gains, showing itself as a highly profitable business with high proportion of recurring fees given long duration of capital, but also supported by a diversified stream of realized performance fees. The strong cash position and cash generation of our business continues to support future growth and capital return to shareholders. With that, we thank you for joining the call, and we'd like to open it up for questions. Thank you. 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. Again, press star one to ask a question. We'll take our first question. Hubert Lam from Bank of America, your line is open. Please go ahead. Hi, guys. Good morning. Thanks for taking my questions. I've got three questions. Firstly, on the FRE margin, I know for 2023 you're assuming it to be similar to 2022, about 62%. How should we think about FRE margin after 2023? Would you expect that to increase or back to its... I think your previous guidance was 65%-70%, or has it changed now to a lower number because of what you mentioned about the mix of firms today? That's the first question. The second question again, sorry, is on the FRE margin. I think previously I'd thought that there were some contractual guarantees with some of the GPs where the margin would be protected. Is this still the case? I'm just wondering how that works because the FRE margin probably was worse than what I had expected. Lastly, can you talk a bit about the M&A environment for doing additional CapEx like M&A? Do you expect to do a similar type of number of deals that you did last year or is it a different environment? What's the bid-and-ask spread like today for some of the companies you're looking at? Thank you. Hi, Hubert. Thanks again for the question. I appreciate you making some time today. On the first question on FRE margin. As you know, we now guide on the overall FRE level. I'd say we expect the approximate partner FRE margin to be stable relative to 2022, and then we'll obviously update guidance over time on the future dollar number. I'd note, in terms of the business mix, we've got a few things happening. One obviously is that our guidance is stable on an organic basis, or historically was As you acquire new firms, those firms can have different margins. As firms raise capital, that capital can also have different margins. An example would be that the acquisitions done over the last couple of years had a slightly lower FRE margin than the starting business. As firms raise in different areas, maybe credit with a lower fee, they typically have lower margins as well. If we look forward and think about the contractual protections, I think the key thing about contractual protections is that still leaves us with industry-leading FRE margins across the different partner firms. The way the FRE margin protections really work is it's about alignment with the underlying principles. We carve out either excessive costs like private plane travel or art purchases. It also means that we are alongside management, in participating in the profit of the business rather than receiving profit after management get paid as you typically get in other businesses. It's really about a, an alignment with principals rather than a fixed margin at any particular level. Those remain in place. We put those in place in every acquisition, historically and going forward, and those are important part of the overall long-term stability of profitability in the business. Hubert, maybe to cover your third question on, on the M&A side. Look, I think, we still maintain guidance of $100 million-$300 million of M&A for 2023. You'll note last year, I think we were, we were clearly cautious around the environment. We continue to be cautious both through how we underwrite the firms we select, the sectors we partner with. I'd say to your question around expectations and the bid-ask spread, yeah, absolutely. You know, I'd say on, on the one hand, we can be more impactful in environments that are more nuanced. You know, I think there's more value placed on our partnership. On the other hand, you know, clearly, you know, I'd say some of that bid-ask spread has also come in. We continue to see, you know, attractive opportunities with high-quality businesses, but being cautious around how we look to add on new partners. Great. Thank you very much. We'll take our next question. Michael Werner from UBS, your line is open. Please go ahead. Thank you. It's Mike from UBS. Just a couple questions from me, please. In terms of the buyback, $50 million, I calculate that's about, you know, 2.5% of the share base outstanding. When we think about the float, it's closer to around 8%-10% of the float. How do you think about that? Is directed buybacks a potential for you guys? Just trying to figure out, you know, how you weigh all the different factors when setting that $50 million guidance. Second question, in terms of the operating expenses within the listing company, we saw a significant increase in the other operating expenses, went from, I think, about $5 million in the first half to $15 million for the full year. I was just wondering if you could provide a little bit of color with regards to the increase there. Thank you. Hey, Mike, good morning. I'll cover the first question. Robert will get you on the second question. With regards to the buyback, I think, you know, first of all, I think it's a demonstration of the board's focus on returning value to investors. I don't necessarily see it as a an annual measure, but more of a reflection of the value opportunity that we see in the shares and the board sees in the shares and the opportunity to return capital to investors. I think the long-term goal of increasing the float continues. Clearly, at the current share prices, this also represents a compelling opportunity for investors who look to continue to hold the shares, but also a means of returning, value to, some shareholders. Mike, just on the operating costs, I think that's an accurate point. We had in the second half of the year a couple of things. Firstly was the debt refinance, so some one-off costs around that and also some final costs associated with the IPO. The increase was principally in legal and professional fees. I think we give our guidance on the company EBIT level of 85%-90%. We'd expect to be operating towards the top end of that range. Thanks. Maybe just a quick follow-up on that. I mean, I saw the footnotes, and I think the total one-off costs were in the range of two and a half to three million USD. In terms of just trying to think about kind of the proper run rate, for the Listco operating expenses, should we think about the first half, second half, or you know, the full-year run rate, as we look forward to 2023? I'd say, you know, the first half of the year, you know, plus a little bit for inflation, through this period probably takes you to a closer kind of run rate for the business. Thank you very much. We'll take our next question. Arnaud Giblat from BNP Paribas. Your line is open. Please go ahead. Yeah, good morning. I've a couple of questions, please. Could you talk about the outlook for deployment as partner firms? I think you've got a slide there on page 27 showing some frequent data. What's the outlook? What are they telling you in terms of their ability to deploy and what they're thinking about in terms of lengthening of the fund cycle as a consequence? Secondly, during your comments, I think you talked about a 17% discount rate for valuing partner firms. What does that imply in terms of valuation multiple? How do you think about those holding multiples versus the multiple at which you're willing to do new acquisitions? Thanks again for that. When you think about deployment for the partner firms, I highlight a couple of things. One, obviously the overall environment. Firms remain cautious. Overall, we still see some transactions and activity. I think a key differentiator for Petershill Partners is obviously our footprint in the mid-market, where firms are generally able to still get acquisition financing through private lending and other measures other than just bank borrowing. We still continue to see acquisitions as well as disposals take over from our partner firms. I think you saw that partly in the disposal side through the strong PRE realization for 2022. The caveat says clearly we've been going through a couple of weeks of overall market volatility. That can have an influence through the year. Overall, we still see our firms transacting. On the discount rate, I direct you into the depths of the prelim results. We actually give a breakdown both on the discount rates and also the weighted multiples applied to the firms. We give a summary of that on page 34 of the presentation as well. You typically see the private markets firms with a low teens multiple on their management fee side, and then carry generally gets valued on a more of a discounted cash flow basis. Just how you view those, I mean, when judging new acquisitions, versus what you're holding your current portfolio of assets are. I mean, how does that come into your thoughts, into your thinking processes? Sorry, Arnaud, can you just say that again? Yeah. you're holding your portfolio companies at low teens FRE multiple. how do you calibrate the price at which you're willing to pay for new acquisitions in line of those valuations and where your shares are trading at a 50% discount to where NAV is? You know, I'd say that that cost of capital represents also a long-term view when we're buying sort of acquisitions and firms, and it reflects, you know, how we see their business today and how it would develop over time as well. Thank you. We'll take our next question. Luke Mason from BNP Paribas. Your line is open. Please go ahead. Yeah. Morning, guys. Sorry, we're doubling up, so I'll keep this short. Just firstly on performances, very strong in Q4. Can you just give any detail on what the drivers were there? Was it one specific firm or a handful of firms in absolute return? Just on the pipeline, 20%-30% range. With the volatile environment, I guess what needs to happen to get within that 20%-30% range? Does that assume kind of a rebound in the markets from here on for the rest of the year? Just secondly, on the M&A environment, which areas are you specifically focusing on? You mentioned like healthcare, PE, and real assets for 2022. Are there any areas you're focusing on for 2023, given the change in the market outlook? Thank you. Thanks, Luke. On performances through the years, a great strong number overall and reflecting good activity and good investment activity from the underlying partner firms. When we think through the year, the strongest single bucket of contribution came from private equity. Buyout firms, harvesting some of those accrued performances that we show, and we show the current balance stands at $611 million. Strong potential for future realizations there as well. The Q4 was driven both by real asset firms, but predominantly or majority of Q4 was driven by absolute return firms. They typically crystallize the performances on December 31st, and that really came from a couple of firms in the macro and fixed income space, generating strong performance through the year that's then realized in Q4. I think just to sort of speak to performance fee and the, and the pipeline and, and the guidance for 2023, I think, you know, I'd say that that's very much reflective of how diversified the platform is, how many different sectors and different strategies that we have, and clearly some of them are uncorrelated to the rest. You know, while we are also cautious about the performance environment, I think that an element of diversification and that differentiation that gives our business is probably reflective of how we're maintaining that guidance. you know, maybe just to finally touch on M&A, we identified a series of different sectors that we thought were gonna be good growth areas and where our capital will go farther and where, you know, clearly they also deliver additional diversification to the overall footprint of Petershill Partners. At the time of the IPO, those were healthcare private equity. We expressed that, you know, continued attraction to mid-market private equity model. Robert explained a little bit of why, because of that ability to continue to transact and finance in different market environments. We identified private credit, as well as real assets and infrastructure. you'll see that, over the course of the last year and a half, we've been delivering on those specific areas. I'd say we haven't really changed. Sorry. We haven't changed our focus on those areas going forward. You know, we continue to have a high underwriting threshold and are targeting firms that we think are gonna perform best on a relative basis and particularly perform in a market share environment. With that, I'll hand back to you. Great. Thank you. We'll take our next question. David McCann from Numis, your line is open. Please go ahead. Yeah, morning. A few from me. Just thinking about the valuation disclosures that you referred to as well, part in the presentation, it looks like, more of the basis on which you're valuing these businesses has shifted again to DCF versus multiples basis. It looks like, you know, now about 64% of the portfolio is valued on a DCF basis. It was 57 at the half year, and 42% last year. Can you just give us some color on, you know, why you're valuing more on a DCF basis rather than multiples? Then sort of related to this question, yeah, the DCF rates, your discount rate you're using, haven't really changed that much since the first half. I appreciate in the first half you did increase the discount rates quite a lot, but obviously we have seen interest rates continue to move up since then. Why are the DCF rates not really moved up very much? That's, I guess the first question with a couple of parts. Secondly, on the dividend, can you just give us a sense of, you know, what you're actually, what metric you're actually thinking about when you set the dividend? What payout ratio and payout ratio of what? Just so we can get a sense of, you know, what the right measures to look at are there. Finally, just, more of a technical one, you know, in terms of this new, debt that you have, that you referred again, that's kind of 5.65% rate. Within the within the results, it refers to an effective rate of 6.2%. What's the difference between 6.2 and the 5.65? Thank you. Thanks, David. On the multiples and DCF, I'd step back a little bit, I think, say that I think overall, both on a multiple basis, we're generally using multiple that or below the level that we see these assets being valued at in the market. On the discount rate, again, I think we're using rates that typically track higher than you see are typically applied to other alternatives firms. The shift between DCF and multiple was largely really just a business shift in the underlying assets as well as partly applying DCF on some of the revenue share interests as opposed to a multiple. I view that as a technical shift. There's no real change in the underlying approach that we're looking at, nor was there a significant shift in the valuation of those assets. Including the thinking overall, again, on the discount rates, overall rates have moved higher versus the end of last year, and I think you saw a decent amount of that reflected in the shift up in the discount rates applied in the first half of the year. I think overall, we're therefore at a level of discount rate that is significantly higher than we see applied to other assets, both transacting privately, but also other listed alternatives firms. As you see in the prelims on page 28, the, on the private market firms, blended discount rate on management fees of 13.3% and 25% on the performance fees. Overall, we and obviously our auditors have felt comfortable at those levels. David, to touch on the dividends, you know, I'd say this was our first full year for a dividend, and given the post-tax profitability, the cash position of the company and the outlook, we felt that $165 million is an appropriate level. We guided at the time of the IPO and will continue to guide to a progressive absolute dividend. We wouldn't necessarily expect the same percentage growth. Don't guide to a dividend payout ratio, but more in terms of this being a progressive absolute dividend for the business. I'd say that on the last point on the new debt, I believe, and Adam can confirm this, but that the 6.2% is the IFRS fully capitalized cost of the raise. The 5.65% is the coupon rate that we're paying. We'll take our next question. Angeliki Bairaktari from J.P. Morgan. Your line is open, please go ahead. Good morning. Thanks for taking my questions. First of all, you have reiterated the fundraising guidance of $20 billion-$25 billion for this year. That's despite the fact that a number of your peers have actually revised down their guidance recently given the current market volatility. I was just wondering if there is any risk that fundraising may be pushed back to 2024 if the current market conditions remain challenging. If you can perhaps give us an idea of, you know, what is the pipeline in terms of fundraising and how many firms out of the 25 you expect to see fundraising this year. A second question. There have been some concerns recently on CRE exposures, in particular in the U.S. Do you see any risk of equity or credit write downs in the real estate asset class, potentially impacting your real estate managers? One last follow-up please on the FRE margin. I heard your response earlier on the sort of contractual protections that you have with your partner firms. I just wanted to make sure that I understood correctly that there isn't actually a floor or a minimum FRE margin level that you have sort of contractually agreed with each firm, below which the FRE cannot fall effectively. It's just a question of assessing sort of which costs you are accepting to share or not. Is that correct? Thank you. Angeliki, hi, good morning. Maybe I'll start on fundraising. You know, I'd sort of say that, in terms of fundraising guidance, it's, it is one that we've sort of put out now on 20-25. Say our number does reflect a recognition of the market environment. You know, the, I'd say key difference in terms of how Petershill Partners' underlying partner firms are raising capital is, you know, we have more than 10 partner firms raising that target amount of capital. There's, I'd say, less of the individual fundraise risk. You know, we've just put out this guidance, but it is also cognizant of the current market environment. With that, I'll sort of hand over to Robe to talk about FRE. Thanks. Yeah, on the real estate side, look, overall, obviously we're cautious on the overall environment, and there's certainly a lot of uncertainty across different asset classes. I'd say one benefit that we have on the real asset or real estate side is if you think about the footprint of our core businesses is typically alternative real estate areas, so the likes of medical office, and student housing. And we have relatively little U.S. office or commercial real estate exposure, which is really where you're seeing quite a lot of pain being felt. We remain, you know, cautiously optimistic on those firms, and they continued to perform well last year, notwithstanding, you know, overall pain that's felt across the real estate markets more generally. On the FRE margin, it's right to say that there's no, in the majority of assets, there's no absolute floor put in in terms of the margin. We do obviously have some, a number of partner firms where we have revenue shares, where those are effectively 100% FRE margin businesses. We're not exposed to any costs or change in costs in those businesses. I think the key aspect actually is that in a lot of these businesses, the principal cost is the management team or the senior partners. Being aligned with them, and participating alongside them rather than after them is a very major protection to have. Again, explains why we have industry-leading FRE margins in those terms, in terms of those participations. We'll take our next question. Andrew Shepherd-Barron from Peel Hunt, your line is open. Please go ahead. Okay, great. Thank you very much. Yes, a couple from me, if I may. Firstly, on your fundraising guidance, does that mean that you expect to raise funds again faster than the general market, or how have you sort of positioned yourself against that? Against Preqin stats or whatever you, whatever you care to look at. Secondly, just what are you gonna do? I mean, your shares are trading at a huge discount to the published NAV, whether or not that's relevant later or not. It does mean that obviously on a PE basis, you're trading at way below the sort of prices you would pay for M&A. Perhaps you answered this earlier, but I missed it. Does it make sense to continue to make M&A at prices higher than your stock is trading at? Thanks. Maybe I'll touch on the first question. you know, I think there was definitely, at least we saw some market share gain last year, $60 billion raised, about 4% of industry flows versus 2% of industry stock. you know, I'd say that, you know, clearly, these are strongly performing businesses that are able to go and tap the market. I would say, however, the 10 firms that raised capital last year, they're not all necessarily the same, 10 plus firms that we have raising, capital this year. That's one benefit of our model is you have 25 different engines of growth, and they can be on one year off the next year deploying capital. You know, it's not necessarily a statement that we're gonna be sort of the same firms are raising every year, which is not what we're expecting in the current market environment. Andrew, on the acquisition side, we remain cognizant overall of allocation of capital. I think you've obviously seen a significant increase in dividends as well as an additional $50 million buyback. We do still think that the right acquisitions, executed at the right pricing with the right outlook can still be very accretive for the company. When we think of the businesses that are typically growing in the double digits, and expanding the footprint of their business, we've typically generated very strong returns, growth, IRRs, however you wanna look at it, on those acquisitions. Over the long term, those can certainly be value accretive for the company, as well as taking the company into new areas of growth, and long-term profitability. Okay, great. Thanks. Again, press star one to ask a question. We'll take our next question. Beltran Palazuelo from DLTV. Your line is open. Please go ahead. Hello, good morning. I'm here with Ali Raissi. Thank you for taking my questions. I have two, if I may. First of all, more strategic one regarding M&A, and your strategy. How has your strategy changed since the IPO, since last year and currently? Is it a thing of the current assets you're looking for the firms or it's just the hurdle rate that is not being there, so you are not transacting? Regarding, let's say, buybacks and, and your biggest shareholder, the 75%, held by the, the firms of Goldman Sachs. Is there a possibility, of, let's say, executing the buybacks and buying stakes directly from them in order, let's say, to eliminate the overhang that supposedly is, is not doing good for the, for the current stock? Thank you very much. Maybe just to touch on the M&A topic first. You know, I'd say that at the time of the IPO, we identified certain sectors that we thought were gonna be additive to the company, both in terms of exposure, diversification, growth potential. These were areas that we saw really kind of coming out of both the COVID environment, but also in terms of investor and LP demands and the potential for growth. Those areas, you know, interestingly enough, I think we kind of maintain that focus. We still think there's an exciting opportunity for healthcare private equity. You know, we've bought interest in a couple of firms that are, you know, have that as one of their strongest suites. We still see a great opportunity in private credit, probably more so than when we first announced it at the time of the IPO. You know, the acquisition of our stake in SLR, you know, clearly demonstrates that. The diversification that real assets gives us, and particularly the nuance around some of that real asset exposure that Robert talked about, does present both a differentiator for us, but also an interesting exposure during an inflationary environment. I'd say all of that, again, still maintained. We haven't necessarily adjusted that the strategic goals. Tactically, I'd say we're being more cautious in terms of deployment pace. The other benefit that we have is with 25 partner firms, we actually have a, an existing calling card with, you know, 25 existing firms who might need additional capital. You saw examples of 2 follow-on investments that we did, one in Industry Ventures, which is a venture secondary player, again, an attractive and interesting space, and one in Kayne Anderson Real Estate. Again, sort of real assets in a very kind of niche growth area, high quality platform that we know really well. The ability to do follow-ons in existing partner firms actually gives us, definitely a bit of a step up in terms of, engaging and deploying capital. You know, the other, I'd say slight difference since the IPO is, you know, we guided towards $100 million-$300 million. Last year, we were within that range. We don't feel obligated to deploy capital if it's the wrong opportunity or if it's the wrong market environment. you know, we're maintaining guidance at $100 million-$300 million, but with the explanation that we'll continue to be quite purposeful and have tight underwriting as we look to add new partner firms. Maybe I'll add to Robert on the buybacks. Just touching on the buybacks. I'd say, I think we think the strong cash flow of the business puts us in a position of strength to make capital allocation decisions through the year. The $50 million buyback proposed take the same form of last year and being open market purchases. We, you know, remain flexible and the board will continue to evaluate other means of returning capital to shareholders next time as well. Thank you. May I have the follow on, if I may? Sure. Go ahead. Just regarding the M&A strategy, I think there's a very interesting slide that you put in 27. It's regarding when you allocate capital dependent on what part of the cycle the returns of your funds. My question is, you have like more than $1 billion of firepower in the guidelines you gave. Wouldn't it be more intelligent to allocate more capital in your partner firms currently, where there's lots of uncertainty and where the risk free rates are very high. My question is, why are you not having the opportunity to really allocate and execute on your mandate to really invest through the cycle? Regarding the buybacks, I don't think you answered my question. My thing is that you have a big shareholder that currently has 75% of the shares that at some point they will have to divest. My question is there a possibility legally and then, and to execute it to at some point execute that buyback through direct purchasing of stakes of that 75% in order to, well, to buy the shares cheaply and to not affect the free float? Thanks for the clarification. Look, I think it's important to distinguish between allocating money into the funds managed by the partner firms that we generally don't do. We've got about $300 million of exposure there as owners of the businesses. The taking advantage of the opportunity set currently, I think is about the current positioning of the company where we own stakes in 25 firms. That gives us diversified exposure to the opportunity to generate strong performance and therefore performance fees as well as FRE growth from the current landscape. It's not really a case of us allocating more capital into those firms. As Ali noted, we remain opportunistic looking at new potential acquisitions, but being cognizant of the current environment, we have a very high bar to execute upon those. Ali, do you want to touch on? Yeah. On the shares held by the GSAM funds. Maybe just to sort of draw a couple of observations. You know, can they participate in a buyback? I believe absolutely they can. It would be the same kind of decision that any shareholder would have to make about whether they think the current price represents a compelling price to sell at. You know, I'd say the mechanism's clearly there. I think the goal over time is clearly to increase the free float. You know, just as I'd say the board finds the current share price compelling, you know, I don't think you'd be surprised that other investors probably do so too as well. In the long to medium term, I think there is a, you know, clearly an intent to increase their free flow. Thank you very much for your answers. I really appreciate the hard work. We'll take our next question. Alexander Bowers from Berenberg, your line is open. Please go ahead. Good morning, everyone. Just one from me. Would you be able to provide some color around how your portfolio firms that are fundraising at the moment are faring in the current environment, and whether they are providing any different terms to LPs, such as maybe change the arrangements or high levels of co-invest? Thanks. Thanks, Alexander. Look, I think when we think about the, you know, the track of the $60 billion raised last year, I think the two main comforting things about that is, one, those fundraisers were in the main occurring on target. As you know, fundraising in private equity or private markets is very scheduled, so you have busier periods, you have quieter periods of firms raised capital on their target timeline. Secondly, as you saw through the increase in the year, you also saw them raise above their target raises. I think we're still very early in the year. You may have seen in the last couple of weeks, one of our partner firms, STG, announced they had raised their new flagship fund at $4.2 billion on a target of $3 billion. Again, raising on target. Ahead of the target number. We're still early in the year, but there are certainly encouraging signs, albeit in an overall uncertain and more challenging market. Right. I guess just in terms of sort of fee arrangements, is the environment causing, I guess firms to offer different sort of fee arrangements to LPs in order to kinda get them on board or kind of offer high levels of co-invest, or is that not coming kinda through yet? Yeah. It's a great question. I think what you'll see, what you've started to see in the industry data is that firms who do start to struggle, do try and incentivize clients through the fee arrangements or fee holidays or things of that nature. We really didn't see any of it in the $60 billion of capital raised last year. Certainly, there's the potential that at the margin, it can happen, albeit then again, the quality of our partner firms in the upper quartile, I think moderates the risk of that versus the industry as a whole. Brilliant. Thank you. We'll take our next question. David McCann from Numis, your line is open. Please go ahead. Yeah, thank you for that. Just one follow-up actually, just on this sort of valuation of the investment portfolio point. I mean, given the comments earlier about the FRE margin, it feels like it's sort of now permanently lower in the sort of low 60s% rather than the 65%-70%. If that is the case, I mean, I guess why is that not more reflected in the valuations we're seeing ascribed to the companies if there is a permanent reduction in the operating margin of those businesses? Thank you. Thanks, David. As noted, when you look at the company level, some of that shift in overall partner FRE margin at the company level is about business mix. That's not a necessarily a degrading of margin in an underlying partner firms. In some cases, it's raising more credit assets, which just have lower management fee rates and margins. In some cases, it's acquisitions that we made having lower margins than the beginning of period business. The overall projections of margins do factor into the valuations, both in terms of on multiple as well as a DCF basis, so that those forward projections are fully baked into the evaluations of the assets. The other thing you should obviously just balance it across the overall valuations is you've obviously seen a very material increase in assets from our partner firms last year. That obviously generates both current and future potential fee and performance fee growth. That can clearly offset some aspect of margin. I, yeah, I'd note a couple of our firms that the firms raised significant assets last year, significant increase in their fee-paying capital. Overall, we still value them at a discount relative to the prior year period because we've increased the holding discount rates applied to those assets. Despite higher AUM, higher profitability, we're holding those assets at a lower valuation. This concludes today's question and answer session. Gurjit Kambo, at this time, I will turn the conference back to you for any additional or closing remarks. Yeah. Look, I'd just like to thank everybody for taking the time to join our call. If you have any further follow-up questions, you know, you can contact me either via email or give me a call. I'm happy to take those questions offline. Once again, thank you everybody for joining the call. This conclude today's call. Thank you for participating.