Good morning. My name is Patrick Davitt. I'm the US Asset Manager Analyst here at Autonomous. It's my pleasure to welcome Invesco's President and CEO, Andrew Schlossberg. Give me whatever title you want. Sorry. As a reminder, if you want to submit any questions, you can do that on the Pigeonhole app. Should have a link on your papers there, and I'll try to work those in. So maybe to start, Andrew, as you reflect on your first year as CEO, what do you think Invesco has gotten right, and where do you see the most room for improvement? Yeah, and thanks, Patrick, for having me. So I'd probably start at the, maybe the most important thing for Invesco success, which is investment quality. And over the past year, our investment teams have, you know, started to put up much better numbers. So we have about 65%-75% of our active assets are outperforming peers, and that's up about 10 or 20 percentage points over the last year and a half. And our first quartile peer rankings are around about 40% of the assets, up from around 20 or 25 a year and a half ago. So investment quality, I think, is core and paramount to our success, and we've seen some good improvement there. Organic flow growth, we did $10 billion in organic flow growth last year, which was pretty decent in that market environment. That's accelerated into 2024. We're already past that, past that mark, only after a handful of months. We've increased the market share in our ETF business at about 2-3 times the rate of our flow shares, about 2-3 times the rate of our asset market share. We've started to introduce private market capabilities into the wealth channel, and we've repositioned our Asian business, which is starting to see the fruits of that labor through reengagement in China and also growth in Japan. We've looked at the expense base, and we've, you know, we've taken out about $60 million, but maybe more importantly, repositioned the company to operate more as a global platform. And so consolidating teams, consolidating areas of the business, that'll make our expense base more agile. And we've been focused on improving the balance sheet. So we've, over the last year or two, paid down $1.2 billion of debt, and we're getting close to our zero net debt, our aspiration to put us back in a position to regularly buy back stock. So those are all the things on the plus side. I'd say on the challenges side, the biggest area of impact will be our ability to continue to progress in active equities and translate better investment performance and quality there into greater flow growth or decay, regardless of where the markets and demand is. Our goal is to really achieve at market or better flows, regardless of the situation. We've got areas for improvement. Mm-hmm. So in that vein, maybe update us on your strategic priorities now and how you think you're executing against them. Sure. So, there's a handful of strategic priorities, and I think the first one is really around focusing the markets and the channels that we're seeking to execute in. And we're looking for markets and channels to refocus and put more resource and energy toward that are both large markets, but also have some kind of catalyst change that's going on where Invesco is positioned in a strong way today. And under those criteria, the U.S. is gonna continue to be a very important market for us, obviously, for its size, but also significant generational wealth transfer. And China and the Asia Pacific region in general, because of reforms, capital markets, developments, and the growth of the retirement space, in particular in China, make those two markets the most important markets for Invesco. And so we're gonna continue to concentrate our resources towards markets like those, and ones that have those kind of characteristics. The second strategic priority is around what I was mentioning on active equities, and so really being in a position to enhance the quality of our active equities and enhance the flows and the outcomes. We're doing that through new leadership, through more risk management, and a much tighter relationship between investments, product, and distribution to be able to rebend that curve. The third area of priority is around taking our investment capabilities and vehicles that are in high demand and scale well, and improving the profitability and operating leverage. Fixed income, multi-assets on the asset class side, and ETFs and SMAs on the vehicle side. The fourth strategic priority is around private markets, and we have a very strong institutional private market business focused on real estate and alternative credit, bringing that into the wealth management space. The fifth area is around next-generation technology and deploying it through our platform, both at the enterprise level, the distribution level, and the investment level. And then lastly, as I was just talking about a minute ago, Patrick, the financial flexibility and the balance sheet strength, that'll enable us to generate the kind of operating leverage and pay out and return to shareholders. Great. So maybe taking a further step back, what do you, what do you think really differentiates Invesco? I'm sure it's a couple of things you just talked about- Yeah ... from the other competitors and what continues to be a fairly challenged, broader asset management space. Yeah, no, as I took a step back and reflected on that over the past year, myself and our team, there's probably a couple that I'll point out, and some are a little redundant. I think one, our global footprint, and in particular, our Asia Pacific and our China footprint. I mean, it's China's a $90 billion JV asset under management market for us. Japan, $60 billion. India, we just put together a JV. These markets are places where affluence is moving, reform is changing, and we have a distinctive position that's really hard to replicate. So I'd say that's one. Two is the fact that we have a diverse, active investment platform that spans public, private markets, and multi-asset. The third area I'd say is that ETF business. I mean, it's, it's a $600 billion ETF index strategy business that is the fourth largest, but, but arguably the most innovative, and one that has higher yield, fee yields than others. And then lastly, is just our distribution strength, in particular here in the U.S. wealth management market, which is the biggest market. You know, how can we deploy that distribution strength through all of these, capabilities and products? So I, I think those are the most distinctive ones. Mm-hmm. So you mentioned the active equities, and you recently finished an internal realignment of the portfolio management operation. So perhaps update us on how that's tangibly impacting fund performance at this point. Yeah, I mean, some of the numbers I was mentioning before, I think we went from strength to strength on the fixed income side. I think over 90% of our assets beat their benchmarks over all time periods on the fixed income side. So as the people move up the curve, we're very well positioned on fixed income, and I think, as I said, went from strength to strength, and we just brought together teams that had been operating through disparate ways in Europe and the U.S. I think on the equity side, there's pockets of improvement. We're starting to see better results on the global side of equities. We're starting to see better results, continued good results on the small and midcap side, things like our U.S. value complex and our U.K. equities complex. So the investment results are getting there. I think what's as important, though, is getting ourselves focused on where are the places where demand's gonna be and how do we accelerate either the capture of new growth or slow the redemption patterns for places where there's more secular change going on. Makes sense. So in that vein, Invesco's been one of the more consistent inflows in the group. So how do you see, the biggest drivers of organic growth playing out from here, both in the near term and the longer term? So, as we think about organic revenue growth, the biggest place that's gonna change our trajectory in the next little bit is that active equity portfolio, so I won't repeat that. Where we're seeing the most demand and where we see a pickup in organic growth, even this year versus last year's strength, the number one is out in Asia. So China, in particular, the flows that we're seeing in the last couple of months are more than the flows we saw in the last two years. And our asset level in China is now just a few percent below its all-time high. So despite all the challenges in China, we're seeing it as a net flow grower for us and something we think we can sustain. In the ETF business, ETFs, faster growth this year than last year, but I think maybe more exciting from my perspective is the broadening out. So what was just sort of U.S. equities, U.S. large cap, is now getting into mid and small, getting into places like floating rate and bank loans, further out the curve on fixed income. Fixed income, where it's been really dominated in short term, is now starting to move out into municipals, investment grade, European corporates. We're starting to see demand. And then, as I was talking before, private markets, spent a lot of time getting our strategies placed onto wealth platforms, and building out our specialist teams and building out our network, and I think that flywheel can start to pick up in the coming years. Great, we'll touch on a few of those later. But maybe on the inorganic side, Invesco has been one of the more active acquirers of the public asset managers. So how do you think M&A fits into your strategic plans now, and what opportunities would you consider? So, clearly, we've got a lot to do internally, and we've been busy the last year, really repositioning the company and starting to see some of the turn that I was mentioning, and we have a lot more to do organically. Also, the focus on our balance sheet and really being in a position where we can be back in the market, regularly buying back stock in the second half of the year is really, really critical and our top priority right now with cash. As time progresses and as opportunities present themselves on the M&A side, I think the places where we would pay attention are in private markets, but it would be in places that are extensions of things that we do today in the real asset space, in the alternative credit space. I think those would be the primary areas, but right now, we have a ton of opportunity organically. Makes sense. On that point, your ETF business has been a strong growth driver. You probably have one of the best ETF franchises out there. Thank you. Maybe dig in a bit more on the trends in that space and how Invesco can continue to compete and gain market share against the behemoths. So, the history of our ETF business, or part of the history of our ETF business, is that it was largely designed for retail or wealth management. It was largely designed around innovative or alternative beta, or whatever you wanna call it, and some harder-to-reach strategy, or harder-to-reach parts of the market. It had an innovation and partnership mindset. I think all of those things have helped us grow to where we've gotten to and stay focused in the areas where we compete, and frankly, where we could drive profit, too. The fee rates are decent in those areas. We'll continue to innovate that way into the traditional passive market and into the traditional wealth markets and institutional markets, and we're doing this thoughtfully around the world. I think the biggest sort of incremental growth from there is gonna come from this movement of active into the ETF format. And, there's been head fakes on active into the ETF format for 10 years. We have around $25 billion of our ETF assets that have an active team affiliated with the strategy. There's an active fund or an active team helping to manage the fund, which makes us one of the leaders in the active ETF space. Think about how small that is. I think this reality of being able to bring fundamental and quantitative index-like or active through a more efficient vehicle like an ETF, is a major growth opportunity. And there's very few firms that have both the experience, size of scale of the ETF platform with, as much quality active that we have, fundamentally and quantitatively. And, and so I think that is gonna be a, a decent chapter of growth. Makes sense. You mentioned bond flows, which I think is probably one of the biggest topics that comes up in my conversation- Yeah with clients, and we've seen a nice improvement in bond flows this year, and active's kind of come back as well, but mostly going to, like, very few large bond houses. Mm-hmm. So how do you feel about how Invesco's positioned for that potential wave of flows into fixed income product as we get more clarity on rates? And then, I guess, more specifically, what are your strengths to take? Sure. Fixed income for us is, you know, across active, passive liquidity, you know, out to, out to loans, is a, is around $500 billion of, of assets. So we have a large platform, and it's been flowing, positively flowing, for 20 of the last 21 quarters. Mm-hmm. Including last quarter, where we had, you know, a few billion come in. I think the biggest opportunity for us in the short run is what you were mentioning, people re-energizing into the longer end or even the medium end of the curve, where we're very well positioned. Mm-hmm. And we're starting to see some of that momentum come in, both institutional and retail, as much so out in Asia and Europe as we are in the US. So I think this is a phenomenon across the piece. There were a little bit of head fakes with, I think, interest rate clarity. Mm. So, people are still getting paid for their cash, and so there is still- Mm -quite a bit of money sitting in liquidity strategies and probably will stay there for some period of time. Where our strengths are, among many, is our municipals business, here in the U.S. You know, investment grade, high yield, we're one of the largest muni managers. Very good short-term fixed income business, stable value business into DC, and investment grade, and corporates really around the world. So we have a full spectrum- Mm of strategies. There's formidable competition, but I think there's, through the results we're seeing with our performance, we think we can take, we can take some share. Staying on the bond point, the press and some executives continue to push this narrative that there's gonna be this massive rotation- Right -from money funds to bond funds at some point. But there does not appear to be much data we've found that really supports that argument, particularly if you go back to the nineties, when rates were kind of consistently 4%-6%. You've got $17 trillion still in deposits, earning almost nothing. So, so where do you stand on that debate? Yeah, I think, maybe a little more skeptical like you are. Yeah. I think the money's gonna stay there longer- Mm for the sole reason that people are getting paid, and they're- Right not ready to take as much risk yet. I think that's a shorter term phenomenon. Yeah. I don't know if that's six months, 12 months, 24 months, but we certainly haven't seen that flood and flow- Right -happen. And I think until you get more clarity from the Fed, and I think until we maybe get through some of these political cycles- Mm -that may, you know, we may still see it be a little, little bit on the sidelines. I will say, though, cash balances, in general, from what we read from talking to institutions and financial institutions- Mm Around the world, have come down. Mm. I mean, they're, you know, what was probably in the mid-20% range for financial institutions is now high teens, low 20%. The money is moving off the sidelines. I just don't know if it's the full rush, and it's not necessarily all going into fixed income. Right. So you mentioned APAC as a big differentiator. Maybe start with the talk about your view on that opportunity broadly, how you view your specific business there, and more specifically, how the operating environment has turned more favorable in China. Yeah. Let me start with China and just build on what I said earlier. This is, you know, a business we're very bullish on and has been a great business for us that we formed over 20 years ago. And I think had we not gotten into that market 20 years ago and established some of the moats that we have, as now being one of the top U.S. asset manager, retail JV's managers there, it's a very difficult market, a harder market to come into now. We have $90 billion in assets. We have about 50% operating margins, and the fee yields are in the blended, are in the high 30 basis point rate. No capital required, and we're about 50% ownership with a very strong JV partner. Despite all of the challenges the last few years, as I said, our asset base is now getting back to where it was, and we were pretty much flat flow, now starting to see an acceleration all through that time period. I think the challenge had been, people were really getting away from equities and going more into cash-like investments. And what we're starting to see over the last couple of months, with the reforms in the market and property valuations, you're starting to see people come into balance strategies, back into equity strategies, and that's where the demand we see picking up. And as I said, given that we're a well-established, high investment quality, well-known, well-placed in digital platforms and traditional platforms, and I think less Western firms focusing on China, it's a real differentiator for us and a real, we think, a growth catalyst. Japan is, you know, a similar growth story, but for different reasons. We've been in Japan for decades, and it was one of those markets where you're always waiting for the moment, and it feels like we might be in that moment now. I think the retirement reforms that are getting put in place in Japan, I think the focus of the government on their capital markets, and the confidence I think that's emerging of their consumer, is we're seeing in our Japanese business. So it was a $30 billion asset business four years ago, is now $60 billion from Japanese clients. And our biggest growth strategy there in the last year was in global equities. So I mean, it's a really wonderful market that we think we stayed the whole time through. And I think it's gonna—I think as others come back into that market, I think we have a leap forward. And then I'll contrast it with India, where we had been going alone for many years, and doing okay. And we decided to divest our interest in India, about 60% of it earlier this year, but form a JV relationship with a large conglomerate, financial conglomerate, and we think that could accelerate our growth while taking some cash off the table and some risk off the table. Those three markets in Asia are our principal growth markets, that we feel really good about each. I think you said, China flows, in particular, are looking a lot better in the last few months. So what's the outlook for organic growth in that region, for the rest of the year and then maybe longer term? Yeah, I think strong. I mean, last it's been our strongest growing region in the last five years. Last year was slower, but still positive from that, from that market. And I think this year's, this year is off to a, a really strong start. As I was saying, even more than, than last year in its aggregate. So I, I think that region is gonna contribute more of our, of our flow growth, this year than last. And maybe more importantly, I think it's gonna start to increase the, the revenue trajectory, as well, given some of the fee yields in those, in those businesses. Great. Let's move to private markets and alts. Firstly, let's start with reminding us of the main capabilities you have in alts and private markets, and how Invesco is attacking the opportunity provided by retail democratization. Yes, we've been in the private market space institutionally for decades and decades, and really not in the wealth space at all until the last few years, like many. Our profile is about $140 billion of private strategies, of which, you know, 90 of it, $90 billion is real assets, real estate, of which most is equity, but some is debt. It's a global profile. We invest in Asia, Europe, and the U.S. Very large, built out, very institutionally recognized, with all the sovereigns and pensions and endowments that you think around the world. Our private or alternative credit business is built off the backbone of a bank loan, CLO business, and then more recently, into direct lending and distressed. And that's a more nascent business. We like both of those spaces. As I was mentioning, because they've been so institutional, the real growth opportunity for Invesco is to use our distribution strength, use our platform that we've built for retail advisors, you know, build the product development strength that we have, and bring some of those strategies into wealth. We started that effort a few years back. We've invested behind all of those elements that I mentioned, and we've started, we have a real estate equity and a real estate debt strategy, both that are placed on, you know, a few of the biggest wealth management platforms in the United States, and dozens of other platforms, and we should start to see the flywheel start to build for those, in particular, real estate debt. So it sounds like the most immediate opportunities are real estate. So how are you thinking about expanding this opportunity beyond real estate? Yeah. So, extensions that, obviously, on the alternative credit side, you know, we're gonna continue to look for opportunities to bring those strategies into wealth. But for us, because we've been relatively small, there's big institutional opportunities as well. They'll be on the distressed side, probably as much as, if not more than the direct lending side. In time, and we will bring them into the wealth market as well. But right now, the real estate strategies are the ones that we're really focused on, and we think we're in a sweet spot for real estate debt. There's not a lot of supply out there of investors in vehicles that are appropriate for retail. And we have a long track record of success, and we're seeing a lot of reverse inquiry for that. That dovetails nicely into the next question and a question from the audience. Sure. We just heard last week from KKR and Capital Group that they're announcing a partnership to launch hybrid liquid, illiquid products for the mass affluent market. Is that a path that Invesco would explore, as you look to do more kind of private credit, private equity- Yeah -type strategies? Yeah, it was a really interesting announcement and partnership from two really good competitors and firms. And I think it's indicative of a few things that are going on in the marketplace that are probably applicable for Invesco, too. One is that the openness to do partnerships and for people to do cooperations together, where, you know, one has a strength and the other has unmet opportunity, I think are gonna continue. And for a company like Invesco, we've done JVs, we've done partnerships. You know, and we'll continue to explore those. So I think it was indicative of things that are going on in the industry and are interesting to us. I think it was also indicative that, it's important that you have, especially in the wealth space, that you have a reputation and built out distribution, and you have institutionally credible private market strategies. I think between those two firms, they have, they have both of those things. I bring that to Invesco, where we have all those elements inside our company, in the real asset and the private credit space, and in the distribution space. I think where we could see some partnership opportunities is maybe as we bring multi-alternatives to market for mass affluent or for small institutions, in places where we're not choosing to participate in the, in the private market space, like private equity, maybe some elements of infrastructure. Partnering to, to bring a more broad suite of capabilities, I think is interesting. I thought the Capital Group KKR notion of public-private in a portfolio was interesting and novel, and we'll see, you know, that's not something we've explored yet, but I think it's an interesting concept. Mm-hmm. Another one on this point from the audience: a lot of the alternative managers have been talking about, you know, their view at least, that there's only gonna be, you know, 3-5 winners in the space- Mm. And they, you know, and that you need to have a broad product offering to be one of those winners. What's your view on that, and how competitive do you think Invesco's offerings are, you know, to those? Yeah, I think, I don't think there's gonna be hundreds and hundreds of winners, but I think there's gonna be more than five. Okay. And if I stay in the wealth space, if that's, and we can broaden it out, there's three component parts that are really important to be successful in private markets into wealth. Obviously, you have to have really institutional-grade, high quality investment capability. You have to have an ability then to be able to operationalize that for that distribution channel. So you have to be able to construct product, you have to be able to onboard, you have to be able to report things that maybe are more taken for granted, but when you're doing them en masse, are important. And then you have to have the distribution relationships, and, not just at the platform level, but all throughout the advised network. And, my, t he reason why I think it's more than a few is because, and not thousands, is because firms have got to have all three of those attributes- Mm-hmm ... to be successful, and there's not that many firms that have all three of those attributes to be successful. We believe, I believe Invesco is one of those, for the reasons I mentioned before. So I think firms that have, look like us, will be able to find their way to be parts of the few dozen. I think firms that don't have those attributes are either gonna have to buy into those or partner up. Mm. And I think those are all three of those attributes have to exist, and I think some of the things that haven't worked so far are when somebody has one, but not the others. Got it. Let's go back to active equity. I think 38% of your revenues. Yep. There's a lot of skepticism around the viability of active equity businesses broadly. Yeah. And the flow mix, you know, still shows little signs of budging. So what's your strategy to improve the results in fundamental equities? We talked about the portfolio- Yeah -management changes. Yeah. But what is your sense of the future of fundamental equities and the importance of that capability to Invesco? Yeah, I think fundamental equities, you're right, is a 38%—around 38% of our revenue today. It's very critically important to the success of Invesco today, and I think will be in the future. High quality active, we don't think is going away at all. I think the bar of excellence has gotten higher. Right. Hence my comments before about a big part of our strategy is, you've got to have quality. Those are table stakes. So we've got to focus on in order to maintain or gain share, regardless of, of what the markets do- Mm-hmm ... or where client demand is. I think you also have to have products designed and structured the right way. So they have to have the right fees, you know, they have to have the right placement, they have to have the right attention. And time is probably gonna be supporting from mutual funds to some of these other vehicles. We talked about ETFs, but also SMAs. So you've got to be able to, I think, do those things to move it across. And then you've got to continue to defend in categories that are where we're seeing less demand, and get on the offensive in places where there is demand: small, midcap, global, international, EM. And so I think it's a lot of blocking and tackling- Mm-hmm ... quite honestly. But we do not think very much don't believe that there's a death of active equities. I mean, it's gonna be a big part of people's portfolio. Just the bar of excellence is gonna be higher, and, you know, we intend to be one of them. Great. In that vein, how are you managing broadly the secular and cyclical shifts that have driven revenue headwinds for you and others? Look, I think trying to separate between what's cyclical and what's secular is tough, right? Yeah. I think we've talked about some of the cyclical ones earlier. But I'll expand on it for a moment. The broadening out of demand for capabilities and the broadening out of parts of the market where people are investing, so market returns, is gonna have one of the biggest impacts on Invesco, because things have been just so narrow. I think that's had an impact on our net revenue yield. It's had an impact, obviously, on where flows have gone, et cetera. I think naturally, that's a cyclical statement. I think things will start to move beyond. More structurally, I think this move from... It's not an active to passive move, it's just a move from vehicle. Mm. From, you know, less mutual funds, more into separate accounts and ETFs and other vehicle types, means that you have to have a flexible expense base, and you have to have an agile operating platform that can allow you to redeploy and pivot your expenses, your operating expenses, into those areas where you're seeing growth structurally and away from areas where we're seeing decline. And a big part of the work we've done the last year is to globalize parts of the operation so we can get scale, standardize and stop being so bespoke everywhere and specialized everywhere, deploying more technology platforms like Alpha, where we can get less customization and more definition. So I think that's the way that we're gonna be able to deal with both structural and then weave through the cyclical. So no Invesco meeting is complete without a fee rate conversation. I think that that particular issue is probably the primary issue most investors have with the stock. So, maybe talk through the revenue yield issues, how the changing portfolio impacts that, and to what extent you're seeing any product pricing pressures. Yeah, I'll start with the end of the question. Yeah. So we don't see, we have not seen a lot of product pricing pressure, and I think it's partially 'cause maybe that's come over the past, and I think our product pricing is, is well in line, if not even lower in some cases, in the industry. So I would not attribute changes in net revenue yield to pricing pressure that's coming in our discrete strategies. I would ascribe it to preferences. And what I was saying before, a narrower set of preferences in the last couple of years on passives over actives, on ETFs over funds, has changed that net revenue yield trajectory. But I think the most important two things, where I think these are more cyclical, was China, and the impact that had on our business, and our revenue yields. Emerging markets, international and global, which are big equity strategies for us, and they had neither the market data behind them nor the flow toward them, 'cause everybody wants to be in the U.S. and U.S. growth. So I think for us, our net revenue yield picture starts to change as that demand picture starts to change and as things broaden out. We're really focused on how to not just improve that net revenue yield, but how to take and improve incremental operating margins and get leverage out of the business. On that point, ETF strength is a part of the fee rate deterioration, right? It's not all bad. Yeah. But I think one would expect an increasingly scaled ETF business- Yeah -to drive more positive operating leverage. So where do you think we are on the point of getting where those flows can drive a lot more incremental margin, like we've seen at some of the larger ETF players, so that fee rate decline doesn't impact the operating income as much? So over the last three or four years, we've grown the operating margin for our ETF franchise by about 10-15 percentage points. So we've already seen some of that happen when you get to that inflection of scale, and I think there's a lot more room to go, as we continue to build that business. I think the ETF business, though, hasn't been immune to some of the things I just said before about the mix shift, in that a large part of our ETF flows in the last year have actually come in some of our lower fee-yielding ETF strategies because of market narrowness and large cap growth, you know, large cap core. And now we're starting to see that business broaden out into mid cap, small cap bank loans that have much higher fee yields. I think you can get a combination of both the natural operating leverage in an ETF business, and it's got room to grow, and a broadening out of the kind of strategies that generate fee yield. So that's a good segue to expenses. How are you guys thinking about expenses going forward, and do you think you can achieve more savings, after the last take on that? Yes, we made a point of taking out $60 million out of the run rate in the past year, which was important, but I think more importantly was that repositioning of the expense base I mentioned. So the $60 million was net, meaning we invested, we continued to invest in the parts of our business that I talked about earlier that are growing. So I don't think Invesco needs a whole lot of new investment beyond the expense base that we have today. In fact, I don't really think it needs any incrementally. But at the same... So we think we can maintain and grow our margins at the expense base that we have today. But I think it's all, you know, subject to markets, and where market movement happens, you'll see some movement in the expense base. But we really wanted to create an environment where we can pivot the company and reinvest back into to growth areas. But I think we're, I don't see us any sort of new expense needs. So, taking that all together, what do you think it's gonna take to get a lot more positive operating leverage in the business, improve the operating margin, and where do you think those margins could go ultimately? Yeah, I think in the medium run here, you know, markets aside, you know, we're seeking to get to a mid-30% operating margin that we can sustain in any market environment. And again, obviously, that could flex up or flex down with market conditions. And we're around 30% today, and so we think there's certainly room to get back into that mid-30% level. I think some of the things we talked about earlier, that are gonna drive that operating leverage, ETFs, private markets, that flywheel going, Asia, and that active equity business. Mm. You know, getting it back to a place where it's, it's flowing like the market. Mm. That may not be positive flows, but flowing like the market. I think all of those will be the drivers behind that operating margin improvement. We touched on M&A. So let's move to a broader CapEx discussion. Sure. You talked about getting to net zero, excluding the preferred. Is it reasonable to assume then, that buybacks will resume, in the third quarter when that hits? Yeah, absolutely. Yeah. So you know, we're nearly at the level that we aspire to be at, and we fully anticipate starting in the third quarter to start to reconstitute a more regular share buyback program. And absolutely, we're well on that path, and that's our intention. We've said that we want our payout ratio to be between 40% and 60%. I think as we move into that buyback and normalized buyback environment, you could see us get closer to that 60%, 60% range. In that vein, how are you thinking about the allocation between balance sheet improvement, buybacks, and dividends? Mm-hmm. and then, you know, the future combined payout ratio- Yeah. combining all that. Yeah, I back to what I was just saying, the dividend's been, you know, sort of steadily growing and in a place where we'll continue to-- we wanna have a strong dividend. The buyback's been the absent part. Right. And, and with that regular buyback coming, like I said, I think we can get to that. I think we can get closer to that 60% kind of range, going forward. Okay. I have a few questions from the audience. Mm-hmm. On China, the Great Wall JV, you have the option to take a majority stake. I think since 2018, you've had that option, but nothing has been formalized. Is that something you're still considering? And does the geopolitical- Yeah relationship with China affect at all? As I said, we really like the Invesco Great Wall business, and having an opportunity to own more of it under the right circumstances is certainly something we're interested in doing. We have a strong relationship with our JV partner, and so obviously, you know, we wanna maintain that. And having a majority interest is definitely something I could see in our future. Having a full 100% interest is not something I could see in our future. We like actually having- Mm-hmm ... having the, the JV relationship and, being very much seen as a, as a Chinese business there. Just to be clear, it's a domestic to domestic business that's sort of separated and walled off, from the rest of the company. So geopolitical risk is obviously there, but we try to, we try to focus on what we're, what we're attempting to do, which is deliver for, in China, with Chinese nationals, for Chinese investors. Is the Indian JV structured similarly? Similarly, although it's, you know, it's not China. Yeah. It's a different market. It's pretty simple and straightforward. We sold 60% of our business to the JV partner. We have the minority interest. Right. We're not gonna be running the company, you know, the new entity will, but we'll participate in its growth, that 40%. And as the Indian market continues to invest outside of India into global strategies or non-domestic strategies, Invesco will be a big part of- Mm-hmm ... of that new co. And look, that was an opportunity. We like the Indian market, but going it alone, I think through our experience in China, having a partner is really important, and in this case, having the right partner. And so we're able to take some capital back, and some risk back and really be able to redeploy resources to other areas while focusing on India. Has there been any tangible change in traction in that market, or it's still too early? We just announced it. Yeah, yeah. A month or two ago, so we have, we're not even closed yet. Yeah, yeah. So not yet, although we've gotten warm reception for what we're looking to do. Another one from the audience on the MassMutual relationship. Maybe update on progress there and any more incremental cross-sell plans. Yeah. MassMutual's been a, a great partner for us, and, they're a highly interested partner in that. Obviously, they, they have the preferred stake, but, but also they're our largest common equity owner as well. And so our dialogues and relationships are, are constant and, and positive and routine. One of the ways that MassMutual's had the greatest impact on Invesco is that three and a half times as much capital from MassMutual is deployed into our investment strategies than we have on our own balance sheet. Mm-hmm. So their $4 billion to our $1 billion. It's been really important. It's helped get our private markets strategies moving into that wealth channel, as I described. I don't think we could have done it without their support and capital, that way. And so we'll continue to look for opportunities together where we can, where they can invest alongside us. I think the area where we have a lot more work to do, and where we've seen, you know, some progress, but I think there's more opportunity, is in insurance products. Mm-hmm ... through the MassMutual network. But obviously, you know, those are longer dated and harder and challenging to do. But we wanna be a much greater part of that network, and I think there's opportunities there to do. And then lastly, I'd say just between us and MassMutual, looking for strategic opportunities, like some of the partnership things we were mentioning earlier, they'll continue to be a first port of call for us, and a really, really well-established partner. Another one from the audience. The most active Q&A I've had with the audience. Oh, my God! Europe appears to be catching up with the U.S. on passivization. So, how is your ETF business- Yeah to benefit from that? It's done well. Yeah, it's of the $600 billion or so I mentioned, I think it's close to $100. And so we've been a pretty fast grower in Europe. Europe is still behind the U.S., I think, in some of the trends, but I think your... the question about it becoming more passive, we're seeing some of that as well. Our business in Europe is a little different than our business in the U.S., in that we have more cap-weighted benchmarks there than we do here. Mm-hmm. Just owing to, it's a little more of an institutional market. But we're very well placed, just like we are in the U.S., in the U.K., Southern Europe, Switzerland, Germany, so a lot of the markets that we're seeing those trends occur in. And it's really this balance between active and passive and how you put it together in portfolios. So it's been a great business, and I'd say all the same things I said about ETFs would apply in Europe. And we've been there for quite some time and made all the traditional mistakes that a foreign company does when they come in and try to replicate in the market- Mm-hmm Just like it was the market they came from. We've made all those mistakes decades ago, you know, a decade ago. Mm-hmm. So I think we're well set in Europe. Okay, I think we've covered everything. Thank you. Covered everything. Yeah. All right. Thank you. Thanks for coming. Thank you.