name is Dylan Becker. I'm the research analyst here at William Blair that covers Enfusion. Today we have CEO Oleg Movchan, COO Neal Pawar, and Investor Relations, Bill Wright here. For all the necessary disclosures, you can find those at williamblair.com. I think Oleg and team have a slight presentation they're gonna run through, and then we'll jump into Q&A. But take it ahead, Oleg. Thank you. I'm Enfusion CEO. We're a vertically integrated software platform for the investment management team, front to back, SaaS native. We power all investment workflows with our software and services. The history spans roughly 20 years. I've been associated with this business basically since day one. We started with portfolio management system, and over time, we developed order management, accounting, middle, and back office. Today, we're the only SaaS native technology platform that is really being built natively and from one code base, not by acquisition. The differentiation since day one was this insight that single instance multi-tenant database allows for almost infinite scale, rapid software deployment, and essentially create a network effect for all users on the platform. When releases come about, everybody benefits from specific release that is requested by a specific client on the platform. Along the way, we took several rounds of private equity capital. All of them were secondary rounds. The business has been profitable since day one. We never had to raise capital to fund the business. It's the case today. We took the company public in 2021, and we have been operating ever since. We used to be a Rule of 80 before we went public. Nowadays, profitability is going back, the trend is reversed, and we're looking to become a Rule of 40 company over the next couple of years. So why today is incredibly momentous way for us to evolve and grow? So several macro forces represent tailwinds for us. So first of all, SaaS architecture is eating on-prem technology across all verticals. It's not just vertical in investment management, it's everywhere, right? And it has to do with how technology is deployed, how it's used, and of course, cost. We're going to talk quite a bit about cost. Neal is going to cover that and why this is a differentiator for us that our competitors cannot replicate. Second, markets become more electronic and fast, and therefore, you actually need to have this fully integrated platform that allows you to very quickly onboard clients, open new accounts, modulate between real-time, end-of-day, and intermittent portfolio pricing, risk management, and clients really demand that functionality. And it's no longer, for many of us, is a competitive advantage, it's a competitive requirement. This is how we compete against more obsolete, lethargic, sort of legacy platform that operate really on T + 1 basis. The third area is a really systemic thing that's been going on, I wanna say for 15, 20 years. That's a real shift away from active investment management into passive. It really is correlated with compression of both management fees and performance fees, that in addition, as a result, puts a lot of pressure on the budgets of the clients, so they're very focused on reducing total cost of ownership. If you go back for a second into SaaS architecture, what also happens is there is, you know, this fashionable term, digitization and AI. When people talk about this, they assume that the data that AI and any, you know, machine learning model that is supposed to be trained is ready, it's clean, it's in one place, and it's easy to use. Well, it never is the case, especially for businesses that has been around for, you know, name it, 10, 15, 20 years. The standard architecture is compartmentalized. You have proprietary systems, you have a number of third-party systems, and they sort of coexist together. Even worse, the same data set lives in completely different portions of the, of the organization. Enfusion is complete, complete antithesis of that. When we convert clients like this on our platform, all the data live, lives in one place. It's clean, it's... everybody agrees what they're looking for. It also allows for collaboration across multiple, multiple departments of the firm. So if, you know, the middle office talks to portfolio manager or trading desk talks to the back office, they are confident that they are looking at the same exact pricing environment, market environment, trade, position information, balance sheets, and that sort of enables this fluidity of how things revolve around the business. And so, why this opportunity is so big for us? So we have a massive, total addressable market that we're staring at. Our core, our origins are liquid alternative strategies, hedge funds. But today, the same strategies are delivered by our clients, not just in a hedge fund format, but, you know, you name any investment vehicle. It can be mutual fund, closed-end fund, separately managed accounts that have become popular since, Global Financial Crisis for various reasons, and, even ETFs. The systematic trading strategies are actually, because of their liquidity, lend very well into ETF format, and then distribution into both institutional market and the retail. So as we move across this, across the TAM, we kind of follow our core strategy today, which is really capture market share within traditional investment management sector, which is pretty big. This is typically long-only investment managers that are trying to beat benchmark, multi-asset. Sometimes benchmarks are multi-asset, but, you know, typically they're broken down into asset classes, equities, fixed income, commodities, currencies, and so on and so forth. In nuances, in complexity in that market, you know, hedge funds have a reputation that they're much more complex, esoteric, and so on and so forth. But in those businesses, complexity comes... In traditional asset management, complexity comes from different sources. It's the scale across which trades to be allocated, it's complexity of compliance rules, both post and trade compliance, and it's some requirements on portfolio construction. This has been our focus for the last year and a half. The more we go into that segment, the more we build out portfolio construction and decision-making tools, which is, which is sort of reflective of our buyer. Historically, we typically sold to chief operating officers, chief technology officers, CFOs, but increasingly, as we go into this segment, we're seeing portfolio managers as sort of economic decision-makers in this instance. Andrew. The last part, which is the fastest-growing segment of the overall global equity markets, is private markets, is private equity and private credit. Private credit is all the rage, and we're gonna cover it in detail. We're doing some work, but until today, we just put a lot of thought in it. We have done some preparation, but we have capabilities there that exist within the realm of hedge fund industry. And it's also a reflection of the fact that hedge funds, now, they, they've become so prevalent and omnipresent and complex that actually get involved, not just in, you know, standard, hedge fund strategies, like relative value strategies, but also, in broadly syndicated loan and structured credit, that asset-backed securities and direct lending. And so there is a crossover between our core universe and private credit markets, and we, of course, very focused on that. We're not ignoring that. So, Neal is going to take over from here and zero in on our value proposition and the rest. Thank you, Oleg. Of course. Hi, everyone. Thanks for coming in this morning. I'm Neal Pawar. I'm Enfusion's Chief Operating Officer, and by way of background, I spent almost 27 years of my career at three firms. I was the CTO and partner at D. E. Shaw for 12 years. I was CTO and partner at AQR for 6 years, and I was at UBS for 10 years, where the last 4, I was the CIO of their wealth management business, based out of Zurich. So I've had a first-hand view of using a lot of the software that we've been displacing over the past few years, and I wanna really highlight that and the differences between that in this slide here. The point that we're trying to make here is rather simple. When you buy a piece of software that you install in your environment, and this is the way that most of the software products in this space are used today, so this is the model on the left-hand side. In addition to just paying the license fee for the software itself, you know, you've got to buy hardware, you've got to rack and stack it in the data center, you need to have a disaster recovery copy and keep those two in sync. And then you have to have a team of people supporting that, surrounding that, and ensuring that it's running, you know, 24 by 6, whatever the trading hours of the business are. When you contrast that to a pure software-as-a-service model, when a client signs up with Enfusion, yes, they have to pay us a license fee, but the other two sort of concentric circles on the outer ring, on the right-hand side, are covered by us with that license fee. We run all the software, we run all the hardware, we deal with, you know, failover and disaster recovery. We're monitoring it 24 by 7. It's our people that support it if it falls down. So when you think about that from a total cost of ownership perspective, even if, for example, our license fee were to be on par with our competitors, when you actually look at it from the overall total cost perspective of the client, they're still getting a really significant savings because of all this overhead that they no longer have to take care of themselves. What's interesting about this picture is it actually undersells the point. When you think about any large client environment, and especially in our world, where we have portfolio management tools, order management tools, accounting tools, our typical client, especially on the larger scale, has three or four different systems that do that. We have all of those things packaged in one system. So if I were to draw this picture now to represent the true state of the client's environment, I would have three or four of these larger circles on the left being replaced by a single one on the right, because effectively, a client can start to switch not only their order management system or their portfolio management system, but their accounting systems, their reporting systems, and other parts of their value chain over to Enfusion without having to, you know, onboard new vendors and negotiate new contracts. Now, obviously, that's an upsell for us, they'll pay more for that. But the point is, from a complexity standpoint, it's far simpler than the environment today, where they're constantly having to reconcile across all these different systems that they're responsible for keeping in sync. And so that really brings us to the point of, like, unpacking what is the real value proposition for Enfusion? And on this slide, you can sort of see it, you know, explained from the perspective of the client, but also from the perspective of Enfusion as a business. So in the first point around being multi-tenant SaaS, what that means is that, you know, when you wanna onboard a new client, all the hardware, all the data is already available in the system. There isn't. You know, we're not spinning up a new instance and having to do this big migration, we're just adding one more client to an environment that already has close to 900 clients live running on it. Obviously, for us, what that means is we can get clients onboarded a lot quicker than our competitors, which means we start to see that revenue, you know, hitting our books a lot sooner. And we see the SaaS margins, right? Because we have the economies of scale of 900 clients running on a single multi-tenant platform, the incremental cost per client is a lot lower than if we would have to go out and buy specific hardware to run those clients' environments. And the second point here, you know, again, this point about having a single investment book of records means from a client's perspective, there's one source of the data for their firm, whether you're an accountant, a trader, or a portfolio manager, or a risk manager, you're all looking at the same data. In all the environments I've worked in, at the companies I mentioned, and this is true across the industry, that would span four or five different systems that you now need to internally keep mutually consistent because you don't want your accountants looking at a different cut of data than your traders are, and that, that would be a problem. The agility and customizability of the platform is really interesting. You know, a lot of times when I was, you know, using a lot of our competitor products, as a, as a client, their release cycles are, you know, once or twice a year. When you get a new release, you don't adopt it immediately because you wanna wait for other people to sort of test it, iron out the kinks, and then you adopt it. We release our software weekly, and we release it to all of our clients weekly because there's only a single instance of the product. So once we've done our regression testing, and we push it out, everybody gets it, which means any bug that we fix, any new feature that we add, is immediately available within a week to our entire client base. No waiting, no heavy testing. A lot of our competitors will sell testing services to clients, which is, "Hey, we'll help you test the next version of the product," because each client has to go through that cycle themselves. In a SaaS environment, we're doing that once, and everyone's getting the benefit from it. And then finally, you know, the client's engagement is far superior because clients like that agility, they like to see new software pushed out. What we found as a result of that is, you know, our net retention is strong, we have a lot of upsells, we're able to, you know, offer clients different parts of the platform that they may not be using today, and that's been a real benefit for us. Probably just the last point I'll make, and then we'll switch to some Q&A. But this just gives you a sense of how we're moving upstream, right? So as you saw in Oleg's origin slide, you know, we started off our bread and butter was selling to hedge funds, especially hedge fund launchers. We did super well in that space, and we continue to dominate that space today. But over the last five years, we've made a very concerted effort to move upstream into institutional asset manager space. You sort of see that illustrated here, just in terms of our, you know, the increase in our, you know, annual recurring revenue. We had around five clients, about five years ago, that paid us more than $500,000 in ARR. Today, that's over 50 and increasing, and our average ACV has also gone up quite a bit as a result of that. What that means is that now we're starting to see, you know, the product market fit at that higher ACV level, at that higher institutional asset management level. That's allowing us to really not only grow into the total addressable market that Oleg showed you earlier, but also make sure that the platform now has the core feature set to be attractive to these larger institutional asset managers, who, as Oleg mentioned a minute ago, are starting to go through this digital transformation. You know, when you're a hedge fund startup, you're not as picky about where stuff runs. You want everything in a box. When you're a larger institutional manager, you have this myriad of complex systems that you're trying to keep interconnected, and as you start thinking about cloud and digital in the future, you know, a lot of these clients are now looking for transformations in the way they operate by adopting software that's been designed in the modern era and not software that was designed 30 years or 40 years ago. So we're really taking advantage of that trend and really trying to be in the right place for these clients so that we can serve them and their needs as they move into this, you know, cloud-enabled software-as-a-service, you know, space. So I'm gonna pause there and let Dylan take over with some Q&A. That's great. Thank you both. Maybe going off of that last point there, Neal, for you, Oleg, obviously, the business has evolved, originally starting with a focus towards hedge funds- Mm-hmm. - moving into the traditional asset management space. Can you talk about how that's contributed to the evolution? Because those customers have kinda different needs and nuances- Yep. that they're looking for from a functional perspective. Yeah. I mean, as I mentioned earlier, the kind of complexity and the level of complexity is different and it's higher, right? Typically, in a hedge fund space, complexity is driven by complexity of the strategies and instruments that a hedge fund using, although, you know, majority of hedge fund universe is still equity long short. But we see, you know, more and more this multi-manager platforms or large funds that, that are focused on credit, relative value, asset-backed securities, broadly sy ndicated loans, fixed income, global macro, and which means everything under the sun, and also, you know, some more quantitative systematic strategies, and we have plenty, plenty of clients like this. Having said that, the typical structure of the hedge fund is simpler in that, you know, typically people run one or two master feeder structures, and then, you know, more often than not, they have pari passu separately managed accounts. And the process of allocation into those accounts is relatively straightforward. It's all simple pari passu and, you know, pre-trade compliance, of course, exists. Post-trade compliance, of course, exists, but those workflows are relatively simple. In traditional asset management, that complexity comes from other things. First of all, people typically deal with much higher number of securities. If you're looking to build to beat Russell 2000, you at least automatically have 2,000 stocks in your universe you have to track. You have to manage data benchmarks. Benchmark data, excuse me. You have to take into account complexity related to compliance rules, because then you have to allocate not just across 10, 20 separately managed accounts. You have to allocate across 50 accounts. Sorry, 50,000 accounts. And oftentimes, many of those accounts have completely different investment guidelines, constraints, compliance rules that you have to take into account when you allocate those trades. So, the workflows become completely insane, and, you know, I, I have, you know, plethora of examples to give you. So that part is really our focus of the product, which interestingly enough, is integral part of our portfolio construction tool, Portfolio Workbench, that will eventually bring risk management and risk-aware portfolio construction tools to the system, and we sort of this way will complete the cycle of product development. And again, the differentiation, as Neil just articulated very well, a lot of that work actually happens today outside of the platform. People, you know, go, they combine their expected returns, risk, they run some kind of an optimization, and then the output is a, you know, a list of trades that they wanna do. Then they switch their attention, send the trade somehow, either electronically via APIs or from Excel spreadsheet, or God knows what, to FTP website, and the system picks it up, right? And within our construct, that does not exist. It cannot exist because all of this stuff happens within the same system. Once the compliance, pre-trade compliance is checked, trades go into our order management system. Trades executed, they go back into the PMS, and the decision-making, just the cycle of that continues. So the attention doesn't switch, and the workflows are fluid. So that's this is where we spend most of the time. Okay. And with that as well, too, Neal, I would assume that there's different kind of financial profiles of both of these customer segments as well. You kinda touched on it with the 500,000 customer cohort, but how do you think about the selling within both of those and the opportunity for expansion initiatives and things of the like? What's- Yeah. What's the typical purchasing pattern maybe for, for those people? Yeah. So, so purchasing pattern-wise, what I would say is that, you know, because these, these larger managers tend to have multiple systems that they're using for different parts of their front-to-back trading workflows, at any point in time, they might be approaching the end of a contract with their order management system. And so they'll put out an RFP to look to see what other order management systems are out there. So it's less common that a large institutional manager is looking to wholesale replace all their tools in one go. It'll typically be one or another. That's how we get our foot in the door. So we'll respond to that RFP and hopefully win the order management system. Once we've implemented that, and we've seen this dozens of times with other clients, then this sort of so-called land and expand strategy really starts to kick in. Because now that we already have, say, their trades all flowing through our pipes, essentially, we have all their trades, all their positions, you know, all their instrument data. And so now, if their portfolio management system is up for renewal with a different vendor in a year later, then we're now at that RFP as well, except there's one big difference. We've already onboarded them into our overall database of, you know, trades and positions. So the incremental work for the client and for us to add any other component of the system into Enfusion is far less than if they were to go to a different third-party vendor and do an entire onboarding from scratch with them. And so that's allowed us to grow our existing business with sets of managers. So that's one of the big differences in the purchasing sort of cycle. Now, in terms of actually how we service them, one other really interesting thing, when we're servicing smaller hedge funds, they really want us to do as much as we can for them. So that not only means the running of the software, as I explained earlier, but also even a lot of the maintenance of the software. We run a managed service, so we charge them if they want us to actually manage their accounting, you know, workflows and running their trial balances and P&L. But on top of that, we also provide a lot of services for them as part of the support of the platform, which is managing their data. If they want to change compliance rules, fee rules, you know, restricted lists, we often do that on their behalf. With the institutional segment, they wanna do that themselves. They have other systems that they may have that manage that. They want to feed those, you know, those rules through APIs into our system. And the interesting thing about that is it actually lowers our cost to serve that segment because they're used to doing a lot more self-service in that area. This is a big area of investment in the platform right now, is we're working on expanding our APIs and expanding our self-service tools so the institutional segment can be more in control of all the knobs in the environment and not rely on us doing that for them, which also actually, as I said, makes it more cost-efficient for us to serve those. I just want to add real quick on this, like, unlike our competitors, we're completely agnostic to how this works, and that's part of our core product strategy, to really build these tools in the system. So either our team is using the tools to deliver those services, or the same exact tools are using to our clients and if they want to control the workflows and operational side. So if they want us to use it, of course, we will charge for it. But if they don't, we again, refocus our attention, and we refocus on the software, which is, of course, high-profit margin business, and we just move on and do it again and again and again. And you both have touched on a few times here, obviously, the compounding complexity of kind of managing legacy systems. Mm-hmm. I guess, how do you think about complexity serving as a driver as you move into the traditional asset management space, where it's a bit more of kind of a displacement market? Yep. Well, the complexity comes, you know, as I mentioned, from many different things. You know, the most painful and most complex exercise when you convert, you know, the client that's been running on this, you know, hodgepodge of different systems, is actually data migration. So, because they are so big and complex, you know, if a hedge fund, you know, is asking us to migrate two years' worth of data for, like, two clients, two funds and three SMAs, it's one scale. If we need to, you know, up-migrate, like, you know, 550 accounts for, you know, different, I don't know, 17 funds, that's completely different complexity. And so, you know, the way this complexity compounds is, you know, is the same, which is, again, you know, a lot of this data at the client level sit in a completely different, in completely different systems, and sometimes, which is the worst, within different security masters. So the security IDs, especially on complex instruments, just, you know, those two don't talk to each other. So it becomes a huge, huge nightmare, and of course, leads to longer implementation. However, it's this, you know, proverbial story about, you know, two friends trying to run from a tiger, and one is, you know, putting the shoe, you know, lacing up his shoes and trying to outrun his friend as opposed to a tiger. You know, we see that all the time as we, we still have a lot of work to do, but if we achieve feature parity with against our current core competitors like Charles River, like SimCorp, like Aladdin, we already won because their onboarding typically takes two years just, just to get to something that makes sense for the PM. If we can do it in one year, the decision becomes a no-brainer. And our, you know, implementation has more transparency to it, which is, you know, to your point, as far as complexity, which is one of the things we have to solve as we go upstream to really convince the market that this convergence with Enfusion is a much lower risk, lower cost, and higher transparency than this similar conversion to other systems. I just kind of put the bow on it, you know, digital transformation and, you know, the holistic view and integrated view of data set, same story. You take one complex system with disparate data, and you digitally transform it into another one with same disparate data. What have you really accomplished? Sure. And obviously, that creates a lot of opportunity as we think about where the team ends up looking like. Yep. You called out the opportunity to trend back to a Rule of 40 business over time. Mm-hmm. I think you guys have laid out a longer-term financial target profile at- Mm The Analyst Day a few months ago. How should we think about kind of the business evolution back to that Rule of 40 framework? What are the kind of drivers of that, and, and what does it look like over the next kind of three to five years? Yeah. So, so it's the same thing. I mean, we are at the heart, we're a technology company, we're a product company, and this is where we deploy capital relentlessly today. You know, maybe as fast as I would like it to be, we're being very, very selective and kind of engineers we're bringing in. You know, but at the same time, our margins are pretty strong. I think we will continue to expand them, but maybe at the rate that is prudent for us to actually have, you know, a couple of... to a couple of basis points to reinvest back, you know, be a little more aggressive on that. You know, as far as revenue growth is concerned, so that's the challenge we're trying to solve, solve, right? The real strategic question for us is, you know, the asset management industry overall, you know, is growing maybe 4% or 5% over the next, you know, 7 years, right? Hedge funds are not growing, period, right? The highest growing segment of the term that I highlighted is private equity and private credit, right? There, we still have thin capabilities, but we have done some work to actually put some interesting offerings in that area. And so that's the challenge: how do we grow the business at 20%? So with our Rule of 40, you know, without compromising anything. Well, a couple of things. The traditional asset management market comes with, again, given that we're successful in, you know, upselling, not upselling, given that we're successful going to that market with the right pricing structure, that will give us a much higher ACV contracts, right? With much longer-term stickiness. It will increase NDRs, and it will increase ACVs, and hopefully, it will increase revenue growth as well. So that's, that's how, how we see the path toward, you know, Rule of 40. And in fact, you know, why stop there? You know, we think that there is much more potential to actually for us, you know, shoemaker without shoes. We talk about TCO for the clients. Now, we become more introspective in thinking about how to, you know, actually create more scalable and robust services and support. Services and support, right? Again, it's only possible to deliver, you know, again, going back to our mission, you know, to deliver tech-enabled client services as opposed to, you know, something that has 55% gross margin. We believe we can get client services to much higher margin levels if we really deploy technology. That's terrific. And I think that's a great place to wrap it up, and continue the conversation. For those that are interested, we'll be moving to Burnham A for the breakout session upstairs. Oleg, Neal, thank you guys very much. Of course. Pleasure. Thank you. Thank you, everyone.