Augmentum Fintech PLC (AUGM.L) Earnings Call Transcript & Summary

Good morning, and welcome to the Augmentum Fintech plc interim results investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Tim Levene, CEO. Good morning to you sir.

Good morning, and a warm welcome to everyone joining us this morning. So I am going to spend the next 30 minutes just taking you through our interim results for 6 months ended 30th September 2023. Hopefully, that will give you a good perspective of the underlying performance of the portfolio and also give you a sense of the state of the market and what we expect to see coming down in terms of pipeline and opportunities over the coming 6 months and beyond. Please do feel free to ask questions. We have the Q&A tab as was just mentioned, and I'll do my very best. So without further ado, we have had a period of real stability in terms of NAV. You'll see the NAV has just picked up a small amount. What that underestimates -- underplayed somewhat is the underlying growth in the core assets of the portfolio, and I'll talk to you a little bit about that as well. What we continue to see in an environment that continues to have some pretty significant macroeconomic headwinds as well as geopolitical headwinds is that we are backing businesses that can continue to thrive even if they are bellwethers of what we're seeing in the economic environment. And if you look at some of our core assets, it is our job to identify high-potential businesses at an early stage of their journey and then really help them fuel their growth to ultimately reach to profitability and ultimately exit as well. And you'll see some of our core businesses now at real scale but continue to grow at a healthy clip. The NAV is just touched north of 160p and an important measure of ongoing performance is what we define as IRR. So what is that annualized internal rate of return. The target for us over the long term is to deliver 20%, and that would put us in the top [indiscernible] fund. We've been hovering in and around the high teens, in the low 20s. And as a result of some of the events, that does not give credit to the underlying growth, but we've seen that IRR drop somewhat. Nevertheless, we're still happy with where we are. And if you look at the five exits that we've had to date, they've been at a combined realized IRR of [ over 56% ]. So what about the cash? Importantly, in this market, you're well capitalized. We have no debt. And we very much feel that although we've been sitting on a reasonable amount of cash over the past 6 to 12 months, it's important that we stay patient. And we'll talk a little bit about pipeline in terms of what we're seeing, the increase in momentum in that pipeline but also the importance of discipline as well in terms of making sure that what every good company ultimately turns into a good investment and entry price is incredibly important in this market as well. And that's certainly given us some pause for thought over the past 6 months. So in terms of what we're seeing, and I'm certainly not about to become a macroeconomic commentator, but I think what's interesting here when you look at this orange line, which is the global listed fintech index, which is a basket of 100 listed fintech companies across established markets, is it really is back to where it was back in 2019. And so of course, we saw the peak in the middle of '21, and it has been on a pretty kind of steep downward trajectory through '22 and hasn't really recovered despite some moments where it did show some resilience. And I think that's something certainly to watch over the next 12 months, where we've seen obviously kind of significant growth in NASDAQ a bit, fueled by the seven large businesses as well and a disappointing year as well for the FTSE 250. So we're seeing a real separation of what we regard in the listed market so those kind of higher-quality fintech companies and perhaps those that missed it with a lot of problems and they have yet to fulfill that potential, what we are seeing is the market being still a little bit indiscriminate in their approach. And we would expect that to flow through to be more discriminate over the coming years. So what about the portfolio? No changes in terms of additions here. The only real changes you'll see here are just in some of the weightings in terms of valuations and some follow-on in a couple of the businesses here. But it's important that we continue to develop this diversification across the sector. And I think over the past 12 months, we've added our first investment in the insurtech space, a German cyber insurer that's been a strong thesis of ours over the past 18 months. Classic early-stage business, but certainly one in which it's a sector that we think will show significant promise. In terms of how you will see this evolve over the coming 12 months and beyond, it's always a little bit hard to say. What we're happy with is the exposure that we've got across some of these subsectors. It doesn't mean that these will be the only sectors that you see, but we might increase our exposure in the infrastructure space, in particular, a lot of focus on B2B, both in kind of capital markets infrastructure, but also in payments as well, where we certainly kind of increased our capability and our focus over the past 2 or 3 years, in particular. Of course, during the period, we saw the exit of a business called Cushon, which was a Master Trust workplace pension platform. We still think there's a significant opportunity in the digitization of pensions. And it's certainly an area that we continue to have a lot of focus on as well. In terms of the journey from IPO, you can see it has been, over the last 5 years, a blend of capital raisings and also unrealized uplift. Of course, the small tick-up. You might say why do we continue to demonstrate tick ups when -- since March '22 and September '23, that overall NAV has gone down. And that's been a result of the buybacks that we've done that has shrunk the trust somewhat, but we felt it. Certainly, the PLC Board has felt it's significantly accretive at the discounts that we've had. And that's why you see both the growth, but obviously the contrast with the overall NAV figure as well. So what about IRR? I talked a little bit about the target over the long term of delivering that 20%. I think it's -- for us, when we look internally and to just shine a little bit of light of what defines a compelling investment opportunity for us. When we sit in our investment committees, which happen every Monday, and the team -- individual members of the team, will put forward an investment case. It is not as if we are looking for that minimum hurdle of 20%. Depending on the stage that we invest and often it's at the Series A, that would be our real sweet spot in the market. We're really looking for that minimum base case of 30%. And often, when you look at that return profile, we're looking for more 40% to 50% because we're backing businesses at an early stage with a significant amount of execution risk. And it's a really important feature of this fund and certainly of our investment team that when we do take that calculated risk, when we get it right, we're rewarded for the risk that we're taking. And so whether it's -- when you have those outlier success stories, such as interactive investor, which delivered north of 80% IRR or even Cushon, which exited a little earlier than we would have anticipated, was north of 60% as well to give you ultimately, over time, that blended IRR because not all of your investments are going to deliver that outlier return. So what have we been doing in the period? Why have we been a little bit more circumspect than we have perhaps in the past. And I think that's just reflective of market conditions as well. So we followed into the portfolio companies. You can see the kind of the darker purple is existing portfolio and the lighter purple would be new opportunities. So we've just been very, very focused on, one, making sure that we have the right entry price, as I said earlier, but also making sure that we're leaning into our winners as well. And we would always adhere to the adage, if you've got to continue to back your winners. We certainly feel that we have a number in the portfolio. In particular, we have a business called Volt, which is really developing a very successful platform in the open banking space, as one of the leading orchestration platforms there. It raised a significant round from Tier 1 investors, led by the American fund, IVP. And we, again, wanted to avoid dilution in that and make sure that we were able to do our full pro rata. And then as well, despite the fact that the Tide is well capitalized, now profitable in the U.K., there was an opportunity to buy some secondary stock from any shareholders that needed liquidity. And again, it's important to have a strong balance sheet where you can be opportunistic. And if you feel that there's strong value for your shareholders and you see significant growth potential going forward and that is an area where we're keen to make sure that we could capitalize and take advantage of. One of the things that I'm often asked is, at what point do you decide to take the money if there are secondary opportunities? And I think there are examples -- numerous examples in the portfolio, but I can highlight two. If I give you the example of interactive investor, which was a business that we backed and ultimately sold about 18 months ago to Aberdeen for GBP 1.5 billion, there was an opportunity 2 years prior to exit. I think there were probably 3 or 4 opportunities where we could have taken money off the table some or at GBP 500 million, at GBP 700 million, at GBP 900 million valuation. Each of those moments, we took the opportunity to invest more and buy that secondary. At the same time, with Cushon, there was an opportunity, an offer from NatWest some months ago. It wasn't one that we were expecting. The business certainly wasn't a sale. We felt there was significant growth still to come, but there was certainly some execution risk in that market. And in -- at the end of the day, for a variety of reasons, we felt that was a good opportunity to take that money off the table. So we're always going to look at every opportunity on its own merits. What we don't want to be doing is being to be a force seller .To be a force seller that isn't in the long-term interest of our shareholders, and that's one of the benefits of the closed-ended investment trust that allows us to be patient when we can be. However, a clear source of frustration for us as well is -- many of you who are shareholders in Augmentum is this discount, which we've seen across the market. We would argue that it's pretty indiscriminate. And I just really wanted to bring that to life. When you look at the NAV, and it's important to look at the NAV after any performance fees, so it's giving you the real picture. This was at the end of October when we took this data. We apply the discount, that gives you around GBP 140 million of market cap. You take the cash off and that's a little bit of a lower number because we have deployed some money, as I said earlier, into Tide. So that's giving you the actual cash number as of October 31, gives you an implied portfolio value of GBP 95 million. And when you look at the total portfolio value after cash, that's giving you 61% discount. So significant value opportunity in our view to take account of and something we're very much conscious of that, yes, the underlying portfolio can be growing strongly, but unless share price starts to move, then that's going to continue to be a source of frustration for us and for all our shareholders as well. So what does that mean in real terms? Well, let's take that GBP 95 million, let's look at the top 5 assets in value. And you can see there's a significant discount even if you just use the top 5. And if you can eyeball the top 3, at the same time, you can see that our top 3 more than cover that as well. So you can say, we'll take the top 3, we can take the top 5, and that is north of the implied portfolio value and you get all the others for free. I've been talking a lot, and a couple of investors have mentioned at the top 3 plus cash is well north of that implied portfolio value. So I think it's something we're very conscious of but I think that really kind of brings it to life that if you look at the top 3, you're getting the 21 other assets in the portfolio where we think there's significant upside across many of those assets as well. So I think it's incumbent on me to -- and others to really ensure that, one, we highlight why we feel the discount is unwarranted but also bringing to life the opportunity ahead there. And I'm often asked, what can we do other than the plc doing buybacks to narrow that gap? Well, of course, market sentiment is important to improve. We recognized that. And at the same time, you need to deliver performance. And that means realizations at your holding value or ultimately north of your holding value as well. But what about that top 5 that we just focused on, which has that fair value of north of GBP 150 million? And these are largely established businesses. I would say Volt is still very much in that Series B, very strong growth trajectory, as you can see with that underlying growth rate. But these established businesses are still growing very well. You can see since investment, the revenue CAGR has been really strong. And at the same time, over the past 12 months, collectively, they've grown at 104% year-on-year as well, which is an impressive rate, especially when you think about the scale that they're at right now. The forward revenue multiple is a measure that we think is particularly important in the SaaS, in the fintech market and certainly one which we'll show you in a slide or 2's time in terms of how that grew during the frothy markets of '21. And over time, if you look at those kind of growth fintechs, listed growth [ TAS ] index, the very top business is growing at 30%, would be trading somewhere between 8 and 10. And even the kind of the middle cohort, we would expect to be in 6 and 8. So for our businesses that are continuing to grow very strongly, to be trading on a combined blended multiple of less than 5, I think, hopefully gives some clarity, some visibility and some confidence that the approach to valuation is prudent and conservative. And then there's significant upside to come down the line, assuming these businesses continue to perform as we hope and expect them to do so. So what about the maturity? And the reason that this is so important is we need to make sure that we continue to have more companies at the early and mid because not all those businesses are going to flow through to what we regard as kind of scaled maturity. But at the same time, we have enough visibility in those later-stage businesses where we think there's a reasonable path to exit over the next 2 to 3 years. Now of course, if you've seen this slide a year ago, you would have seen Cushon in the mid, that wouldn't have been one that we expected to exit within that window, but of course, we operate in a highly strategic environment and as such, there are often strategic investments that come in and make offers for companies in the space and that should give investors as well confidence that you do have assets, even those ones that perhaps aren't treating the lights out but will have the strategic value that gives us the opportunity to take our money off the table and go again. But if you look at those growths across the stages, they are growing at the levels in effect that we think they should be on average. Of course, you expect your early businesses to be growing faster because they're off a smaller base. But as your businesses get more established, and we just showed some of our later stage more established businesses still growing incredibly well, but they start to move to the exit door. They start to look at what the business need to look like to maximize that exit. Some might be looking at IPO down the line and some might be looking at trade sales, what are those key KPIs that external investors are looking for, and they might perhaps adjust their strategy accordingly. But we are not in the business of looking to optimize profit in the short term. We are about trying to capitalize on the huge market opportunity ahead by stealing market share and by continuing to invest in the disruptive growth that a lot of these businesses are demonstrating. Not a slide that I will go into great detail because there is a lot of detail on it, but this just gives you a bit of a sense of the ups and downs in the portfolio. And the valuation approach is that every company is reviewed on a 6 monthly basis and largely, we are now using public market comparables to counter the criticism of listed private equity and venture that they weren't fairly and effectively reflecting the conditions in the public markets. I think when you look at our underlying valuations and approach, it is very much reflected in our view of what is happening in those public markets. And here, you can see in the public markets over the last 3 years, the volatility that we saw. And that just shines the light of the extraordinary situation that we found ourselves back in 2021, where we had those high-growth listed fintechs trading on average at peak forward revenue multiple of just under 25x so a precedented high. And I think you can probably kind of draw a line -- straight line and kind of ignore that window to the second half of '20 and to the end of 2021 as well, where we saw this anomalies, where we saw this huge tsunami of capital coming into the market from a lot of investors that, frankly, we didn't feel we're doing a lot of good for the market. We would call them tourist investors that were inflating the market, giving too much capital to too many companies at the wrong price. During that period, what we did as a fund was not to get swept up in the valuation of madness. And you can see our top 10, how they were valued on a forward revenue multiple as well. So I think the criticism that private equity venture capital portfolios, hugely inflated and then didn't deflate, I don't think it could be leveled against us. You can see that we've largely held that stable. And the top 10 are currently trading on a 4.8x forward revenue multiple on an average growth rate of about 74% year-on-year. But we talked a little bit earlier about the exits, the importance of exits. And I totally get it that investors, you can talk about write-ups, but they want to see realizations. I alluded to the fact that we don't want to be forced into realizations for the sake of demonstrating track record, but when the opportunity does present itself even if it isn't to knock out the part 1, then we will look at it objectively. And the five exits that we've had to date, which has delivered GBP 84 million of just under GBP 200 million that we've invested overall, demonstrates that, one, all of them have been at or above, and the three larger ones have been a significant uplift to the holding value. And that's really important as well because, one, yes, you're trading at a significant discount. But two, I think investors want to recognize that if you are going to sell assets and particularly the most strategic one, they will be sold at or above your holding value. And I think that's a really important data point that we'll continue to hopefully deliver on in the future. And public market comparables and other comparables. If you looked at this slide, perhaps 3 or 4 years ago, you would have seen a much larger bar for prices of recent transactions. And I think somewhat fairly, the market has been scrutinizing valuations in a lot more detail. And I think you can see here really, for us, it's around 90% when you bring in those that are valued on the liquidation preference, and I'll talk a little bit about what we mean by that and the calibrated price of recent transaction, which is also bringing into account some public market comparables as well. So I think when you think about the portfolio of Augmentum, and you think about the underlying valuation approach, the vast majority of our companies are not being valued on -- if it was historic rounds or private rounds of peers. It very much is taking a relevant basket of those public market comparables applying that as well to make sure that in our view and our orders' view in the year-end, that is fully reflecting what they think is a fair price in the market. But let me just talk a little bit about liquidation preference and anti-dilution and what we mean by that. Because what I often read is people calculate evaluation. They will look at our implied equity holding and try and kind of back out what the actual valuation is. That doesn't always tell the true picture because there is often a lot of detail behind the scenes. And there could be different structures in the cap tables and in the shareholder agreements that can give you arguably a preferred return as well. But to give you a very simple example, in a situation where we invested GBP 5 million in a Series A, fintech company at a valuation of GBP 20 million, the post-money valuation would be GBP 25 million, we would own 20% of the business. That business goes on a journey of 2 to 3 years. Unfortunately, it doesn't quite deliver on expectations, but it has built some technology that has inherent strategic value. The business then gets sold to GBP 5 million. In that scenario, there was no further money that had been raised, we would get our GBP 5 million out because we sat at the top of the equity stack with our preferred equity. So although we're coming in at that headline post money of GBP 25 million, ultimately, the business needs to be sold for less than 80% value for us to suffer any loss there. Now of course, we're not going into these investments suggesting that we might only get our money back. But ultimately, there are times where things don't go to plan and it is important where we can to be sure that we can protect our downside. In that same example where the business isn't sold, but it continues to trade but is underperforming, it needs to go back to the market. The market speaks and says we are going to give you another GBP 3 million at a price of GBP 10 million. In that scenario, we would see our anti-dilution clause kick in, i.e., new shares will be issued to compensate us for the dilution below the valuation level that we invested at last time. So those are two important measures that you need to have in your structures, in particular at the early stage. And they would tend to be must-have structures and terms that we would look for in order for us to invest. So what about the performance? What have we seen over the last 6 months, over the last 12 months? Still strong growth in the portfolio. Again, what you will have seen, having seen this slide over the last 2 to 3 years for those of you that have been holding or following Augmentum, has been a lot of these companies, that were towards the left side, have moved across to the right. So they are moving into the growth phase. They are still growing nicely, but they are kind of moving to scale. I think a lot of the time, the focus is on the top line, and I understand that. However, over the past 12 to 18 months, external investors and market commentators are very much fairly asking the question, it's all well and good having top line growth, but when are you going to be profitable? What is that path to profitability? How much of your growth is sustainable? And I think in that case, what we have seen and what we have pushed our companies to do not just over the last 12 months, but really over the last 18 months is to really make sure, one, if they're on a path to profitability, that doesn't compromise their growth in a significant way and accelerate that path to profitability, be self-sustaining. At the same time, for those businesses that are continuing to invest, and we absolutely want to encourage them to continue to scale and grow, we want to make sure where possible they can extend that runway. And our average cash runway has moved for the businesses that are still investing in their businesses and not profitable for probably about 15, 16 months to north of 2 years. So that just gives us that comfort that these businesses are well capitalized, the growths that they're undertaking is sustainable as well, and that's very much a philosophy that we'll continue to push to our underlying portfolio and is an important feature when we are looking at new opportunities in terms of how much capital does that business have, if we come in? How aggressive is their growth trajectory and also how likely are they to be able to invest at the next time around? Is this the type of business that is going to attract growth capital down the line? These are all really important factors in -- that have come into our decisioning. And we are operating in an environment where cash in the venture space isn't flowing as freely as it was in '21 and the first quarter of '22 as well. So really important to have your eyes open going in. Again, a little bit more detail, which you can look at in your own time. But before I wrap up, I just wanted to give you a sense of what we're seeing in the market and pipeline going forward. And I think what is clear as we get to the end of 2023 is that we reverted to the mean -- and when I talk about the mean, I'm talking about 2018, 2019. So these were strong years, certainly 2018 up until then was a record year for fintech financing. And I think we're seeing still a significant amount of market interest, but also a very clear recognition that '21 and '22 and really, you might sit there and say, well, I thought '22 was a weak year. The first quarter of '22, there was a lot of lag effect from '21. So I think '21 is actually underestimated and '22 is overestimated, if you can believe that looking at the number. And we've seen a lot of that money evaporate and disappear from the market. We think that's a much healthier dynamic. And you can see the same in the average fintech financing round, the big spike happened in those kind of growth year round, so the Series B and the Series C. C didn't move too much. We saw a bit of movement at the Series A, but we're reverting again back to the mean. So we think that's a healthy environment. There is capital. There's a lot of smart capital in the market as well. So you need to be on the front. So we think our specialism really puts us in a good stead. Our access to opportunities, and of course, our DNA and capabilities over the last 10 years and beyond really does resonate with a lot of fintech founders as well. So that gives us, in our view, a competitive advantage in the market to be able to get access. But if we stripped away from what has happened with funding and valuation, it's always important to highlight the opportunity ahead of us. So where are we in the maturity cycle? And if you look why fintech, why financial services, why should you continue to have exposure to this sector, why are we so excited about what's coming down the pipe over the 5 years where you just have to look at the market opportunity, we're fishing in the deepest pool in terms of revenue potential. It's a large and profitable sector, and there is huge headroom for future growth. So in '23, we estimate we're at about GBP 300 billion of revenues amongst fintech. So let's call that 3% to be generous in the market. In our view, that will grow to GBP 1.5 billion by the end of 2030. So a really significant market opportunity. That still has the industry with only 7% market share. So this is an industry that is taking a long time to disrupt. There are very valuable businesses that have been built and are being built. But it's fair to say that over the next 6 to 7 years, we believe there will be hundreds of very valuable multibillion-dollar businesses built in the fintech space that either are in their infancy today or are yet to be formed and therein lies the opportunity, and it's our job to provide you some exposure to some of those exciting growth businesses. And what about the incumbents, what are they doing? Well, more of the same. They continue to invest very heavily on their balance sheet, yet they continue to struggle in many respects with the digital transformation. I think what is different today than what we saw when we listed just over 5 years ago, is the attitude, the approach that the global financial services incumbents have to fintechs, both B2B and B2C. They recognize that there is some significant world-class technology that has proven itself at scale and increasingly, they're collaborating. Of course, they compete head on with a number of these fintechs and you will continue to see acquisitive behavior. And as you can see here, a couple of assets in our portfolio bought by strategics over the past 12 to 18 months as well. And 2024 and '25 and beyond, you will continue to see that. What about the IPO market? But the reality is, if you look at the last 5 years and you aggregate all those exits that fintechs have had on a global level, we're talking about 95% have been taken out through M&A. So as much as we want a buoyant, vibrant market, both here in London and beyond. The reality is that if you are going to be bought, you are likely to be -- or you're going to be taken over, it will be not through IPO. So that is certainly something to keep an eye on, and it is not a trend that we think will die down in the coming years. So I talked at the very beginning about pipeline and what we're seeing. And I would classify 2023 as a year of 2 halves. I would say the first half of the year, we saw a lot of reluctance from the European fintech market to come to the market unless they absolutely have to. There was nervousness about valuation expectations. And frankly, we weren't seeing the depth, the level of quality that we would have hoped to have seen. I think as we've got later in the year, and I would say Q4 in particular, there has been a much higher bar of what we would regard as high-quality assets. And we expect that to continue to flow through into '24. I think fintech founders are recognizing that, one, the market has reverted to the more recent mean. They have got over the excitement of '21, in particular, recognizing that valuations need to be moderated. And at the same time, a lot of these businesses need to come back to the market because they have hugely ambitious growth plans, and they need capital for that. And the existing investors in many respects aren't able to satisfy those growth demands and as such, they will come back into the market. At the same time, if you look at every opportunity that's come through our pipeline and when we talk about the '23 that have gone through advanced due diligence, it would -- that conversion rate is very much on the lower side that we would expect. But we are very focused on making sure that the structure is right, that the cap table is reflective where investors are going to be aligned. What you don't want are investors that have misaligned interest. And at the same time, we remain very focused on getting the right entry valuation. And that is where a lot of these are falling down. So I think the source of frustration, when you find a really high-quality asset where you feel that you've been tracking it for a number of years. We have high conviction. But ultimately, we've got to be patient, we've got to recognize that the terms need to be right. And ultimately, when we get it right, we want to be rewarded for the risk that we took on that journey. And how does that '23 breakdown? Well, just to give you a bit of a sense here, it's pretty broad. We are continuing to look across the spectrum, across the financial services spectrum. So I can't tell you that we are focusing all our energies on a particular area. I think this is kind of pretty reflective of some of those kind of core areas where we have a stronger thesis or some real conviction. Firstly, I'm spending a lot of time in the wealth and asset management space and certainly an area where I think there is a lot of scope. But equally, members of the team remain very excited about what they're seeing in the payment space, and of course, a lot of focus and interest in infrastructure as well. So what about the stable dry powder? We said there's a lot in the market. Yes, there is. A lot of that hasn't been drawn down. But when we think about venture capital funds that have been raised, unsurprisingly, you're seeing a drop in that because you have LPs, investors and venture capital that were, frankly, over allocated looking for liquidity. But those funds -- in particular, raising '21 and '22, those need to be deployed in the market over a 3- to 4-year period, and you'll continue to see that capital flow in. So I still think we are in a well-capitalized, well-established sector. We aren't seeing the frothiness of '21, thankfully. And I think we are seeing more measured behavior in the market. But at the same time, the high-quality assets. There is a fair amount of competition, and that's why it's important that we really leverage our capability, our expertise, our differentiation to make sure that we can get ahead of the curve and give our investors exposure to some of the more exciting fintech assets across the Europe. So I'm going to pause there. I think I've taken up probably 32 minutes, so a couple of minutes over and make sure that we've got time for questions there.

[Operator Instructions] I'd like to remind you the recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via your investor dashboard. Tim, as you can see we received a number of questions throughout today's presentation. If I can just hand back to you to read out those questions where appropriate to do so, I'll pick up for you at the end.

Okay. Well, there's a lot here. I'm not sure we'll get through all of them, but we'll give it a crack. And some people have asked a few in one, so maybe I won't do that, but I'll answer a question from Roger. A number of PE firms operate on an investment time horizon of 3 to 5 years. How does Augmentum characterize its investment time horizon? Good question. There isn't a defined time horizon. It does somewhat depend on the point in which you invest. But if I give you an example of where we would typically invest, which would be the Series A. So a business that is established, typically, it's generating revenues, often we would have seen kind of 12 months of revenues. The market historically would have told you 5 to 7 years. We would say for a Series A business, it would be closer to 7 years and beyond as much as I'd love to kind of be able to prescribe that we can get an exit. Of course, as I explained to you, we had some investments, and Cushon being one, that exited within 18 months, but that's the exception rather than the norm. So I would kind of put that typical horizon at 7 years plus. Of course, there are cases where you absolutely don't want to exit it. I think interactive investor is a great example of making sure you're patient and holding on while you can be comfortable that you're maximizing that exit to date. So a question about profitable realization. How many profitable realizations have been? And what has been the total value? So five realizations, all at or beyond the holding value. I think GBP 84 million has been returned, which I hope answers that question as well. I'm going to push through. Tim, you mentioned backing your winners. What are your thoughts on selling noncore positions at or above NAV, if it is possible? Can I appreciate likely a tricky part of the cycle, but could that change market sentiments towards the discount to NAV as well as free up your team to focus on new positions and a new narrative convey to the market? Yes, very good question. Again, I think we're very pragmatic. You have to recognize that our job and our energies need to be focused on driving NAV growth. And that's not always possible because when you have problem children in the portfolio, it takes up time. And it is about being disciplined that it doesn't suck up too much time at the expense of those kind of growth opportunities. But I think we feel an obligation to our investors that if there is an opportunity to get our money back or some money back, then we'll work hard to do that. We are not going to kind of walk away and be a pushover. So I think it just is addressing that on a case-by-case basis. I think noncore positions, if someone comes knocking on the door in a business that isn't delivering on what you thought it would or isn't frankly meeting your kind of expectations or you think the team aren't being stretched or aren't stretching themselves, then I think you absolutely look at that on a case-by-case basis. I think you can be comfortable that we'll be pretty objective. And as and when those opportunities present themselves, then we'll very much look at them seriously, but we're not looking to hold on to stuff for the sake of holding on to it. Given -- [ Jonathan C ], question. Given in the period, we've seen multiples decline, what is driving increase in the revenue multiple for the top 10 from 4.5 to 4.8? Yes. I mean, I think what you're seeing there is a bit of a shift of the top 10 as well. So I think to answer that simplistically, if you looked at the top 10 in 6 months ago and 12 months ago, it would be a different top 10 now. So it's not quite apples with apples. And I think kind of following on for that, the question, I think at the full year, the top 10, we're seeing revenue growth of 117%, but this has been reduced to 74%, which seems quite a drop-off in 6 months, what is driving that. So I think again, a fair question. And I would have said -- and for those of you that joined this call 6 months ago, I talked about what I felt was a much higher growth rate than we had expected because we have spent time with our portfolio companies talking about it's not growth at all costs. It is about turning down that growth style, if you can and making sure that you accelerate that path to profitability. So I think they've been on a journey there. I would certainly say that a couple of the businesses really did outperform in that period. We would have expected the numbers probably to have been somewhere between certainly sub 100%. But I think from our point of view, we're not kind of overly focused on whether it's 100%. You saw the top 5 are growing at 104%. And again, I think that is well ahead of where we might have thought they would have been growing. For us, really important is part of profitability. Plausible -- those plausible kind of growth unit economics, how much is being invested in growth. And I would say kind of north of 50% is a healthy number as long as you're seeing that gross margin grow as well. So I can't predict the future. But I would kind of -- we're continuing to see some kind of pretty healthy growth rates in the core assets. And I'd be looking at that, hence why we gave some CAGR as well. And I think those are useful proxy to look at rather than those kind of single 6-month or 12-month growth rate. The question from Mark, do you generally have a Board seat at your investee companies? If not, how do you ensure the management strategies execution are optimal? We do usually take a Board seat or an observer seat at a portfolio companies, which pretty much has to come alongside our preference shares and antidilution clauses at the early stage. It's really important. These are businesses that are going on a significant growth journey. These are businesses that are going to have a number of challenges on the way, and we want to make sure that we can provide advice, we can deliver the benefit of our experience. We -- if I talk about the senior members of our team, we've all been on the other side of the table. We've built businesses. We've exited businesses, having helped build them at north of GBP 1 billion and now spent the last decade adapting to become investors as well. So I think our experience really does resonate. There's a lot of pattern recognition across the portfolio as well. And it's absolutely essential that you have management teams and founders that recognize that expertise, recognize that our interests are to deliver an exceptional outcome for the founders, for the employees and for shareholders as well. So we're really aligned, but it's much easier to do that when you're sitting on the Board. So we feel that's a hugely important part of the equation of being a proactive venture investor. I think activist is not always the most positive term. I think we're very much constructive activist in our portfolio, and it's very much something we expect to continue beyond. Question from David, do you run any funds outside the trust? And if not, does a trust own the management team? Could a third-party pay for the trust plus management to expand their opportunity in the sector? Well, maybe I'll just talk a little bit about we -- this is what we do. This is our day job. We are working 100% on all the portfolio companies. We don't do anything else. So hopefully, that does answer that. And the trust were internally managed by the plc as well. Right. Nick -- question from Nick. 24 portfolio companies, GBP 45 million of cash. Can you characterize your thinking about how you deploy capital going forward between follow-on and new investments? Yes, Nick. So for us, every 6 months, we would look at -- and really, we do it over 12 months as well. We'll look at the expected capital requirements for the existing portfolio, how well funded are they? What are their growth objectives? Are there going to be requirements for them to go out and raise money? If we think they need to raise money, do we want to follow on and support our position? Do we want to be opportunistic and try and put more money in before that? I would say at the moment, if you look at our capital pie, yes, you want to make sure you've got some reserve cash. But I would say the majority of the cash that's sitting on our balance sheet, we're very much focused on deploying that into new opportunities over the next 12 months. And we do think that '24 and '25 is going to be a really positive vintage for fintech venture, where we're seeing more moderated pricing and certainly more to be owned and ready to capitalize on that. Question from Miguel, can you comment on whether financial incumbents that have acquired fintech companies from sponsors like Augmentum are happy average with those returns? I don't know if I can. I mean, I think as a general rule, the danger of large incumbents acquiring fast-moving, nimble, innovative tech companies, not just fintech companies, are that they can stifle and suffocate that innovation. I can only kind of give you anecdotal view from many in the space and perhaps point to an example of a business where we sold to Aberdeen, amongst our other investors, which was interactive investor where the former CEO of interactive went in and ran that. And as far as I can tell, I think that continues to grow and scale. But of course, being part of an enormous corporate organization, it's never going to quite be the same as running independently. So I think that's always the danger. And I think that does give incumbents pause for thought. Are they going to stifle and suffocate? And are -- is the incumbent going to benefit from the strategic nature of that asset? And I think there are many examples where it has worked well, and there are many where it hasn't. Question from Humphrey. You highlight the level of VC dry powder. As this is deployed within shortening deadlines, which will have the greater impact on Augmentum, increased competition for new investments or portfolio exit opportunities at increased valuations? So in the height of the market, I would say, in '21, you were seeing funds being deployed over an unprecedented pace. So funds have been deployed over 18 months. You would expect a typical fund to be deployed over 3 to 4 years. And so we feel that the market, albeit is well capitalized, we'll see a more moderated flow into the market at more moderated valuations. But that will have -- that is going to have continued kind of competitive dynamics in the market. But I think we feel we're well positioned in this market where we're one of the few specialists in the space. We're the only listed fintech fund in the U.K. and one of the only globally. The more success stories we have, the more that resonates in the market, and that gives us kind of real credibility -- continued credibility. And you wouldn't be surprised to hear that there are a lot of fintech founders that come to us first or very early and say we really like what you've done with X and we'd really love to have you as a partner and that gives us an opportunity to get in ahead of the curve. And so I think that continues to be the case. We can't be complacent. We are very hungry, hard-working team, and I think that will continue. Of course, are we likely to see more strategic exits? Are we likely to see some of that private equity dry powder become acquisitive because they have been a little bit more passive? Yes, I mean, ultimately, investors are paid to invest. And there hasn't been as much investment certainly in the PE space, and there's been a good reason for that, but we would certainly expect to see that shift at some point next year. Whether it happens in the first half and second half, it's hard to tell. Right. Question from Mark P. We heard lots of common sense. Thank you, Mark. Fewer challenge. You mentioned disruption. One is Robin Hood going to be a disruptor in U.K. fintech. Two, have regulators tightened regulations and changed expectations of the prospects for fintech? Okay. On one, is Robin Hood going to be a disruptor? I mean, hard to tell. I mean, they've been talking about launching here for many years, and they haven't. And I think they haven't for a good reason. It's a very different market here to what we saw in the U.S. So I think they're going to have -- if they're going to launch in this market, they're going to give it a good go. I think what we're seeing is significantly reduced marketing spend of fintechs because there is less money in the B2C space, not just fintechs, but also amongst banks and wealth managers out there as well. So I think their share of voice could be larger in terms of where it might have been 2, 3 years ago. So they probably need to spend less money to have impact. Whether the proposition will resonate, I don't know. I think the whole digital wealth management space hasn't delivered on the expectation and promise that many thought it would have. I think we've seen the likes of free trade launch. And it got to a certain scale. We've seen even some of the incumbents. AJ Bell launched of Dodl. And we've seen a lot of these, what we call PFM, personal finance kind of management tools, which are about savings and trading, money box and chip and plum. And again, they -- there isn't a clear winner in that space. It has taken a long time and in some cases, a lot of capital to get to scale. I think if Robin Hood are prepared to be patient to adapt their proposition to fit the U.K. market, then I think they have a reasonable shot, but they're going to have to be patient. It's going to take time and it's going to take capital. Second part of the question, have regulators tightened regulations? Yes, I mean, I think innovation is often ahead of regulation. We all know that. And we have a pretty forward-thinking regulatory approach in this country. And of course, there's always frustrations with the FCA that they were quickly enough. And sometimes, there are contradictions. I think in part, they're tightening up. But I think we're in a very different position to where we were 15 years ago when the FSA obviously morphed into the FCA. So I think in part, they have. I think there's always question marks. And I think two big question marks at the moment are what are they doing with crypto and digital assets; two, in lending. Of course, buy now, pay later is an area of real focus as well. So I think they're learning on the job. I think the FinTech Sandbox was a really positive innovation from the regulator, and that gave those early-stage fintechs the opportunity to work and collaborate and for the regulators to see on the other side as well. So I would say, fintech is not going to suddenly take over the whole market. I think that was always kind of a naive expectation. This is a huge market opportunity, and there will be very big fintech winners, and there'll also be incumbents that grow and scale and thrive in evolving market through their own investments, but also through M&A as well. And there'll be losers on both sides. But I certainly think it's our challenge to continue to push the regulators, to be forward thinking and move quicker when they can. And we have a good relationship as to many of our underlying portfolio companies as well. So I'm going to ask -- I'm going to answer one more question just because I have another investor call in a couple of minutes. So I'm going to try and see if I can answer one that I haven't answered already. Let me just take one from Jonathan. We saw some issues in the payments market around CAB and Worldline at the end of October, which seems to not the Augmentum share price. Is there any read across the Augmentum payment investments? Well, I think there should be absolutely no read across. I think other than sentiment, these are fundamentally different businesses. I don't know much about CAB, other than the fact that it's perhaps emerging markets, may be Africa. It's self-style as a fintech, would I call it, for me, classic fintech, not really. But obviously, it certainly was a bit of branding that helped it get away into the market. I think that's part of the problem is there is a perception problem. If somebody sees fintech and somebody sees something negative happens, then the whole market takes a hit. And of course, we're a bit of a bellwether being the only listed fintech fund. So it's a bit frustrating for us when we see those. And arguably, it's three pieces of good news and one of bad news negate each other. And I think that's just a reflection of the market sentiment that we see in the moment. But -- I mean, using payments as an example, if you look at the size of that market, if you look at the penetration of the disruptors and it remains the most disruptive part of the financial services space, despite that, there are some very, very significant market opportunities, and it's a huge source of focus for many investors, ourselves included. So we are looking for really innovative game-changing businesses. There are lots of payments businesses out there that could be profitable. But if it isn't really differentiated and if it isn't really trying to fundamentally disrupt the market and do something different then it's certainly not something that we're going to be excited about. So I'm going to pause there. I thank everybody for taking the time to listen.

Perfect. Tim, thank you for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order of the management team can better understand your views and expectations. This will only take a few moments to complete and I'm sure it will be greatly valued by the company. On behalf of Augmentum Fintech plc, I would like to thank you for attending today's presentation, and good morning to you all.