Azimut Holding S.p.A. (AZM) Earnings Call Transcript & Summary

Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Azimut Holding First Half 2023 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Gabriele Blei, CEO of Azimut Holdings. Please go ahead, sir.

Thank you very much, and good afternoon to everyone. We'll quickly go through the slides as usual and then leave as much time as possible for Q&A. So jumping to Slide #4, a quick snapshot of the main driver of the first half 2023. Net inflows of EUR 3.7 billion, which compared with the minus -- EUR 17 billion of the industry. It's a Assogestioni data from which we came out and EUR 643 million of total revenues, which I would like to stress, and we see this later on in this data, you have a very limited contribution from performance fee, which means that most of these revenues are recurring in nature. EBIT of EUR 286 million or a very solid EBIT margin of 44% with a consistent quarter-over-quarter development. And lastly, EUR 231 million of adjusted net profit. It's adjusted due to 2 main effects. The first one we are excluding the tax charge linked to the settlement with the Italian Revenue Agency which was announced in the first quarter. I remind you, we announced EUR 26 million in Q1. This number has been restated with the first half 2023 to take into account a restatement of the Luxembourg tax declarations we have done in the previous years. So today, there is an effect from the tax one-off charge of EUR 19 million. At the same time, we are also excluding the impact from the implementation of the IFRS 17, which is almost EUR 11 million and therefore, excluding these 2 effects, you get to the EUR 231 million, but we will see this in more detail. Moving to the next slide, we are providing you with the usual by now breakdown of the main driver by segment. I will spend a couple of extra minutes here just to explain you what is behind those figures, segment by segment. If we turn to Italy, we have EUR 42.2 billion of average AUM, which is stable versus the end of 2022. And revenue growth are mainly recurrent thanks to the new distribution fee, which has been introduced in April 2022 and a significantly lower performance fee because if we compare the level of performance we have in this EUR 458 million, which is EUR 3 million with EUR 33 million in the full year, you understand that this is mainly recurrent in nature. Moving to the adjusted management net profit of Italy, it's EUR 170 million it excludes, as I mentioned just now, IFRS 17 and the tax charge. And this means 80 basis points if we were to be even more conservative and we would take out the unrealized gains we had in the first half as well as the release of the provision, which we will discuss later on, you can basically have an annualized adjusted base for the net profit of EUR 155 million or 73 basis points. This is just to be extremely cautious and stripping out all the nonrecurrent items. Moving to international, EUR 33.6 billion of average AUM growing versus the end of 2022. The revenues are impacted by the Sanctuary deconsolidation and obviously, lower performance fee contribution, if we look at the full year 2022, we had EUR 16 million in the first half of this year, we had slightly less than EUR 5 million of performance fees with margin in terms of revenues, which is almost 80 basis points. We had a good development out of Australia and the EMEA region. And we hope to be at an inflection point as Brazil is concern, but we can discuss this later on. The EBIT growth is supported by the evolution in these regions I mentioned. And we have a net profit that is stable vis-a-vis last year, and this is due to lower performance fees, the fair value of the options and the effect of the deconsolidation of Sanctuary, which occurred last year. Moving to the private market segment. As well here, we had a good development in the AUM at EUR 6.7 billion, of which EUR 3.7 billion in Italian and EUR 3 billion in the U.S. The revenue growth has been supported and has been very strong by the product launch and the many commercial activities that are still ongoing in Italy. Margin-wise, we are in excess of 250 basis points in Italy, which is consistent with what we have mentioned to you in the last years. And as far as the EBIT is concerned, it is not fully reflecting the growth in terms of revenues for 2 main factors. The first one is that we have in the cost line of this segment, both U.S. and Italy, However, as far as the U.S. is concerned, we are not receiving the revenue from the U.S. because as you can remember, the contribution comes through dividend from our GP staking business, and therefore, you see the impact only at the net profit level. Net profit, which has progressed to EUR 21 million or 62 basis points in terms of margin. Lastly, FinTech revenues are stable vis-a-vis 2022. They are impacted by a slowdown in the investment banking business activities as -- which has suffered this general slowdown in the market. This has indeed an impact in the EBIT, which also discounts for investment that we're making to further develop this business line. Net profit is positively affected instead by some unrealized gains on investments and closed at EUR 9 million. All in all, EUR 231 million of net profit on an adjusted basis or 56 basis points as far as the margin is concerned. Moving to the following slide, not much to add here, EUR 85.3 billion the AUM at the end of June. This is explained with vis-a-vis full year 2022 figure that stood at EUR 79 billion with EUR 3.7 billion of inflows and a market effect that we can estimate on average around 3%. Next slide, net inflows by regions and product. You see how in Italy, we have disclosed to you in the past the divestment of EUR 150 million of own investments as well as the outflows from some monetary funds linked to some institutional investors. If you kind of exclude these items, we would have been collecting significant money from Italy during the first half. EMEA, EUR 725 million, driven by strong demand from our products and services out of Turkey with more than EUR 500 million of net new money. As well as our Monaco, thanks to some private bankers recruitment activity, which is still ongoing. So, flows of EUR 200-plus million. In the Asia Pacific region, we have good organic flows from Australia for EUR 240 million and Singapore for almost EUR 60 million. And Australia, we have to remind you that we had a couple of M&A transaction, which you see in the M&A column for almost EUR 200 million. Lastly, the Americas, we are benefiting from a strong -- still strong U.S. organic growth for EUR 1.6 billion overall. Mexico, we're very pleased and we have to congratulate with our colleagues down there for a solid result of almost EUR 400 million in terms of net new money. And this is offsetting the Brazilian first half, which, as I mentioned in several occasions in the past, has suffered outflows for EUR 700 million in the first half. Needless to say that we have been able to more than offset this and therefore closed with EUR 3.7 billion. Turning to the asset, EUR 85 billion in Italy, EUR 47.1 billion, a delta of EUR 1 billion vis-a-vis the end of 2022, which is driven by a market effect in excess of 2%. Whereas our international assets stands at EUR 38.2 billion, which compares to EUR 32.9 billion in 2022, an increase of more than EUR 5 billion, which is explained by the inflows of EUR 3.7 billion and the market effect as well as an FX impact across the board which explains almost the 5% increase. In terms of geographical split, nothing major to add. If not just one mention as far as Mexico is concern, they deserve this our colleagues. They overcome the EUR 1 billion mark. So they are spending at EUR 1.2 billion in terms of AUM. Clearly, this is benefiting from the ongoing recruitment of financial advisers as well as the positive contribution from the sovereign wealth fund flows that we have been able to achieve in the first half. Moving on to the snapshot of the results. I wouldn't comment any more the average total assets. As far as total revenues are concerned, EUR 643 million, a progression of 5% net of Sanctuary. If we break down the EUR 643 million for Q1 and Q2, we note a positive evolution of the recurring fee component for something like EUR 4 million Q-on-Q. As far as the breakdown of the revenues, we have our recurring fees that increased net of Sanctuary by EUR 18.5 million. Sanctuary deconsolidation is impacting for negative EUR 44 million. You have a new distribution fee, which was introduced, as I mentioned, from April 2022, impacting for EUR 36 million. and then a recurring fee component, which is benefiting us for EUR 2 million in the first half. All in all, this is sustained by the expansion of the private market platform in Italy, whereas a good note is also from our foreign operations, there is a positive contribution which explain the delta vis-a-vis the first half 2022 of EUR 24 million, thanks to clearly the growth and change in perimeter out of Australia, Brazil and Turkey, which are worth to mention. As far as performance fees are concerned, we had a negative fulcrum, which you have probably seen in the press release. which has been more than offset by the international contribution from Turkey and Brazil for almost EUR 5 million. Insurance revenue, we have a delta of EUR 7 million vis-a-vis year-on-year or better if we include -- or sorry, if we exclude the IFRS 17, the delta is by EUR 9 million. which is explained by the performance fee for EUR 8 million and continuing evolution of the recurring fee for EUR 1 million. Turning to the next slide. Costs are down 8% due to the Sanctuary consolidation. Excluding this effect, the delta is an increase for EUR 26 million. If we look at distribution costs, they are up 2%, broadly in line with the revenue evolution, and we have a positive impact from the social security charges linked to the FA network here in Italy. And as we have mentioned in the past, given the stabilization of the interest rate curve, we now have a positive effect on our cost line. The rest is the SG&A line. The delta is positive by EUR 29 million. We need to stress that Italy is flat year-over-year, whereas the bulk of the growth is linked to the change in perimeter from our foreign operation Australia, mainly. And we are highlighting Ireland as we are seeing some increase linked to our Irish asset management company as well as Nova Asset Management, but this is still we can confirm in the low single-digit number, which is something we have discussed in the past. Organic growth from the foreign operation is up EUR 5 million year-over-year. Turning to the depreciation and amortization, we have had the release of provision for legal cases as well as some guaranteed returns on a pension fund, which did not materialize and are positively impacting our D&A line. EBIT, up 2% year-over-year, with a margin that stands at 44%, which we're very pleased with. And net profit adjusted, as we mentioned, EUR 231 million, up 15% vis-a-vis 1 year before or 56 basis points again, these do not include the tax impact and the IFRS 17 impact that we have discussed. Moving to the asset management and distribution. This is the usual chart with the breakdown in terms of funds, no major change or better we are continuing to decrease the cash component as we have had the opportunity to discuss in the past. However, we're not changing our positioning in terms of equity exposure, we acquire an asset allocation, and we're quite cautious in terms of regions and asset classes. Next slide, weighted average performance, 9% to over 3.5 years, nothing much to add here. And if we look at the private market segment, we have a couple of slides where we want to highlight where we stand and what we are doing. Here, this is a snapshot of the evolution over the last 3.5 years. You can see how we have diversified and increased the assets by product and regions. We started many years ago with 1 product, which was a simple test on our client base. We have leveraged on our expertise and trained our network as well as educate our clients and changing the asset class -- sorry, the asset allocation of the client's portfolio. Now we spend 12% or more of the assets under management with more than 50 products and solutions with the geographical split that you can appreciate. In the next slide, you see how we are diversified in terms of private debt equity, real assets and venture capital as well as region. Most importantly, most of the network is activated. With 92% of our FAs and clients in Italy stands at 45,000, which is an increase of 4,000 vis-a-vis March 2023. Moving on to the next slide. This is a quick snapshot of the products closed. We continue to have a very strong pipeline of products and raising activity with several closing in the first half as far as our infrastructure fund. We are pleased on where we stand together with the ELTIF sold to our retail investors, the fund -- the strategy overall stands at EUR 700 million. Private debt, we had the first -- we had a closing for EUR 55 million. This is clearly underpinning our new lending strategy, which basically lends to SMEs in Italy through our private debt product. Venture capital, despite a very tough environment in this segment, we have been able to launch, raise and close in a very a short period of time of fund for EUR 33 million. And we are also very pleased to announce a couple of initiatives out of Brazil where we have seen a strong demand for both our infrastructure funds as well as real estate products, in the agro business, also thanks to the collaboration with XP. And especially for the infrastructure fund, we had an initial target of BRL 400 million, which was increased to BRL 570 million or EUR 110 million because of the very strong appetite. In the pipeline, we have oversubscribed the private equity product, which is engineered by our colleagues and trends from Electa, which they are active in the prebooking and pipe investment. We expect this product to close in the EUR 130 million, EUR 140 million region. And we are in the marketing of the diversified credit fund, which is dedicated to institutional investors, and we're pleased that the European Investment Fund is backing it. So being a coronary investor with money that has already been approved by them, which clearly supports further institutional asset gathering activity across Italy. On the next slide, I'm not going to spend time on the next couple of slides, but here, we just wanted to take the storytelling that all of us are seeing in terms of the industry where clearly, the retail segment as far as private market is concerned, is expected to boost the asset increase over the next years. And we are clearly in the right spot since 2019. These are the -- in the next slide, you can see the key trends observed in the private market. You probably now all of that. So we'll be skipping that. But if you look at where we are and what we do in terms of activity directly and through our affiliates. In the next slide, you see how with different solutions in terms of product and regions, we are leveraging on our -- on the extensive and best-in-class track record we have within the group with a number of GP staking as well as internal team that we have developed over time. Next slide, which basically concludes the private market segment. We have -- as we've done in the past, we are providing you some suggestion on how we invest and the value that we look to build over time because we still are seeing a lack of reflection of all that in our share price. But we are confident that over time, this will materialize. As you can see, these are real market transactions that we have completed with Azimut taking a stake between 12.5% and 20% in each of these asset management company. Assets have developed quite nicely over time for all of them, I would say. And clearly, the return on our investment based on our proprietary model, which basically are forecasting discounted cash flows and based on current [ multiples ] are hinting towards interesting returns as far as the investments we have made are concerned. Moving on, on the next slide, UniCredit. We just wanted to give you a highlight of where we stand. We're very pleased with the work of our colleagues that have been able to sign at the end of July, the binding contracts between us and UniCredit. This was a key milestone of the transaction we have entered into in December last year. As far as the licensing of the entity is concerned, we wanted to share that the packages in the review process by the senior management of the Central Bank of Ireland, which means that we are not expecting further Q&A among us in the Central Bank. So we expect this to be approved anytime soon. And hopefully, before Q4 as previously indicated. At the same time, which is a significant positive aspect that we have been given the green light to submit the first filing of the fund prospectus, which will hopefully take place in early August. And from then on, we will have the usual interaction with the regulator to be able to provide all the explanation on the products and then start the next steps of the process with the marketing and the net flow generation. I will hand on to Alessandro for the usual walk through to the financials.

Okay. Thank you, Gabriele. Before going through the numbers, we can move to Slide 23, what we decided to do here is just to summarized the key elements related to the application of the new accounting principle IFRS 17. First of all, we would like to underline the fact that only 20% of the insurance AUM have been affected by the new accounting principles. Therefore, we are talking about something around EUR 1.4 billion. This is just an accounting change, therefore, don't see any elements that could impact our insurance business and no change in our strategy. Therefore, this is also the reason why -- for the moment, we just keep the effect of the new accounting principle below the EBIT. Therefore, we are not going to impact above. In addition, that we would like just to share again also the fact that the CSM so the contractor service margin that we count at the end of June 23, it's around EUR 55 million. That means substantially that is the sum of the margin generated by each of the single contract [indiscernible] this type of insurance product, charging also the effect of the authorization and the actuarial fee for this is why there will be a movement positive or negative in the future following the fact that the assumption can move each year-on-year. There is no impact on cash generation, and that's where we confirm that there will be no change in dividend policy. So therefore, we confirm the 50%, 70% of the recurring net profit. Final point that we just mentioned was -- it is the further total insurance earnings over the last time of our products stay the same. But this asset that was mentioned before. And in the first half '23, there is no impact at the level of the EBIT as the accounting effect has been captured below on the finance income line and also the level of the net profit considered the adjusted as explained by Gabriele, which has been took out. Then move to Slide 24. Here, you have the first part of the P&L. Starting from total revenue. Total revenue decreased by EUR 25 million, as we already said, due to the less variable fees, almost EUR 40 million compared to the first half '22 and as well also, we missed the contribution [indiscernible] potentially due to the deconsolidation. And these 2 big impacts that should impact the total revenue. We were able to offset this and you can see also -- you can follow the note number one. That we have introduced the new distribution fees and as well, thanks to the international business that increased the revenue we were able to offset those effects. Looking to the other income as well, we were impacted by the deconsolidation. So at the end of the day, the business is running positively also look into the quarter-by-quarter on '23. At the level of the insurance revenue, we have EUR 9 million of performance fees that impacted the full first half '23 but also we have a positive variation in terms of recurring fees. So before to move to the cost as well, looking to the numbers at the level of the first quarter '23 compared to the second quarter '23. Again, the main point that we would like to raise is the fact that the negative variation of EUR 10 million. It's almost explained by the full impact of the performance fee because we count the effect of the variable fees and as well the less insurance performance fee we account almost EUR 40 million. Therefore, we were able to net this negative effect, again, thanks to the increase of the recurring fees. At the level of the cost, operating cost decreased by EUR 32 million. We already explained the effect of the consolidation of Sanctuary. So that explains the full variation of the distribution cost on the other way, personnel and SG&A decrease. It's not only the EUR 16 million, but we should consider the first EUR 14 million of Sanctuary that is not impacting any more the first half. So -- but again, the variation is explained linked to the increase of the recurring revenues of the international business that is following, let's say, the growth of our business. In general, the operating profit increased by EUR 7 million, with an operating margin at 44% compared to the first half '22 at 42% almost. Moving to the following slide, I would say that probably the 2 lines that we should remark is the finance income. At the first half, '23, we count EUR 42 million of impact. This is as per the note driven by the IFRS 17, that's impacting EUR 11 million, adding also a positive effect of EUR 6 million on fair value option dividends from our GP stake that was around EUR 7.3 million and then also a combination of realized gain and unrealized gain, they count all in all EUR 27 million. On the other way, the net nonoperating income cost was -- is negative of around EUR 12.5 million and it's mainly explained by the write-off related to the discontinuation of the new front-end program for the FAs in Italy. At the level of the tax we already represent the variation and the reason why we moved from 26% to 20%. So I don't -- I'm not going to spend too much time on that. I only raised probably the point looking to the second quarter '23 compared to the first quarter '23, where we see a net profit margin decreasing of 7 basis points, but again, we should underline the fact that we have lower performance fees. And as well, we have this negative effect of the cost that we had to the level of the nonoperating income. And cost for the new front end. Last slide, the net financial position, Slide 26. The net financial position decreased compared to December 2022 by EUR 38 million. The variation can be explained mainly considering, first of all, the net profit before tax account EUR 321 million, then we take out the dividend paid to EUR 34 million. The M&A and investment as per the slide, EUR 126 million tax advance payment for EUR 39 million, and then we have received back, let's say, so we have positive reimbursement of cash from our liquid investment that account around EUR 54 million. And also, as we are -- I mean we are considering the net profit before tax, we should also taking into account the '23 dividend paid to third parties, let's say, so in a simple way, the main reference is the Australia partners. That's it. I'm going to leave back to Gabriele for the outlook.

Thank you, Alan. So last 2 slides. I'm not going to spend too much time, conscious of time. We are in the Summary & Outlook, we are where we need to be, and we put our words into action and numbers are speaking by themselves. Turning to the very last slide, business development and focus areas in Italy, clearly, Private Market, Insurance and Fintech will remain our focus of attention as far as the network is concerned. As far as the international business, we are working to continue and improve the profitability and scale in our key markets. As mentioned, the UniCredit partnership, we are entering Stage 2 of the operational setup. We hope to be able to shorten this time and expecting an earlier kick off than the Q1 2024, which is the base case assumption. M&A. We actively manage our existing portfolio and obviously, are looking for selective accretive targets to further develop our positioning and diversification. Last but not least, an important point to stress, as far as capital management is concerned, as you have heard from Alessandro , we continue to generate a significant cash out of our operations, and we are continuing to be committed to the deleveraging process, which will take place in 2024 -- the end of 2024. That's it from us, and we're ready and happy to take any questions you may have.

Thank you. This is the Chorus Call conference operator. We will now begin the question-and-answer session. [Operator Instructions] The first question is from Elena Perini with Intesa Sanpaolo.

Yes, thank you for taking my questions. The first question is on the outlook that you have that you can have on performance fees for the second half. Just from the first signs that you have in this month of July. The second question is a more technical one, and it is about IFRS 17 impact because if I understood correctly, the first half 2022, there was a positive impact of EUR 23 million in the finance income then this year, another positive impact of EUR 11 million. So I was wondering whether you can provide us with some guidance for the following quarters. And finally, a question about your tax rate because while it is true that in the first quarter, it was affected by a negative one-off. And in the second quarter, it was quite low. So I was wondering about the outlook on the second half and the potential guidance for the full year. Thank you very much.

Thank you, Elena. Thank you very much for the questions. So outlook for performance fees, I think we live in a very uncertain times. And clearly, we are, as many others, benefiting from the current market evolution and trend. But as you probably recall, we try to avoid speculating on what could be a performance fee contribution of any given month or at the end of the year depending on the product because there are too many moving parts, which we do not control. However, what we can underline and we have stressed throughout the presentation. The contribution from this revenue line has been quite limited in the first half. And potentially, it can be even more given the current trend. However, if things will change and can change quite rapidly, we will have to obviously revisit this statement. As far as IFRS 17, I will leave Alessandro to give you a proper answer. What I can tell you from what we are seeing today is an implementation of this principle, which has an impact, which can be more or less relevant and more or less positive. And most likely, which is -- this is probably true for us, but for many other companies that are implementing this new accounting principles will have some sort of stabilization effect over the next quarters, which we do not expect to be material, but I leave Alessandro to elaborate more.

Well, the point here is the fact that you are going to fit today the value and [indiscernible] in the margin related to the single contract linked to this new accounting principle, therefore, you fix an amount that we represent the value of the contract. And then you define different kind of assumption in a simple way, as I said before, linked to the actualization, linked to the actuarial. So therefore, you are going to fix a few elements that could -- it's in a normal and perfect, let's say, business, you were able to fix you are going to have the same impact, let's say, year-on-year. But as we are not living in a perfect environment, just soon you change the assumption, you could have different impact to the P&L. This is the reason why, at the end of the day, the decision that we took was -- I mean, to avoid any impact at the level of the EBIT because which on the other way, it's just an accounting impact. Therefore, the real business, the real effect on our P&L is stabilized by the real flows so positive and negative through the evolution of the business.

You can probably argue whether it is quite questionable on with this principle, we have a better or worse representation quarter-over-quarter of this insurance line. But I guess this is another story. As far as the tax rate is concerned, if you were to obviously neutralize and exclude the tax -- the one-off tax charge what we can and are assuming is to reiterate the 22%, 23% tax rate guidance that we have provided a year, 1.5 years ago.

The next question is from Hubert Lam with Bank of America.

I've got 2 of them. Firstly, on the managed flows. At the start of the quarter, in April, May, they were pretty weak. I know they were due to Brazil and some money market outflows. I think some of the money market outfolws also continued in June, but I think Brazil has stabilized. So I'm just wondering if we should think of June as kind of a good run rate going forward for managed flows and if the worst is over for Brazil. The second question is on your target of EUR 450 million. If I look at your half year I guess, adjusted profit today is EUR 230 million, I guess you had to pretty much almost repeat that. the second half of the year to kind of get to your target. And at the same time, the first half benefited from some investment gains. Do you expect the investment gains to repeat in the second half? Or should we expect some better cost in second half for you to get to your target? Or just wondering how you think you can achieve it?

Thank you, Hubert. So as far as the flows are concerned, I think we will still have the last bit of outflow from the monetary fund, i.e., the institutional investors in July, then they're done. So this will take away a volatility element as far as monthly flows. At the same time, in Brazil, we are starting to see some signs for an inflection point, both at the macro level with the potential decrease of interest rate, which will fuel more constructive activity from the clients and from the distributors, which, fingers crossed, if there is not any worsening in the macroeconomic scenario will benefit over the course of the second half of the year. So Potentially, as you were mentioning, the worst for Brazil could be over. At the same time, as far as managed flows are concerned, we will be over the next month closing a number of products additionally. So you will see that effect over the probably Q3 and more also in Q4. And this is taking into account both Italy as well as our U.S. GP staking business. Target. I think our assumption is to get to the EUR 450 million. If I look at the statement of our Chairman is even to overcome this EUR 450 million. So as we have always said, we always try to work and achieve those targets, if not overcome them. As far as the assumptions that we're taking on the potential gains. We're not actually making any assumption as far as these line items are concerned, but we're very much focused on the current component of the business and the things that we can truly control and incentivize. So to get to the EUR 450 million we probably need clearly normal market conditions, which was the base case assumption behind that target, which one can question whether we had them or not. But for the second half, we're not betting on any extraordinary of a material size gain. So potentially, there can be some more, but we are very much focused on the recurring component.

The next question is from Alberto Villa with Intermonte.

Alessandro and Gabriele. I have a couple of questions. The first one is on the -- again, on the outlook for net inflows looking at your Slide #7, I was trying to figure out performance of the, let's say, retail Italian component and to what extent do you expect in the future to have again maybe sizable inflows into, let's say, traditional managed assets apart from the private markets component that seems to remain the main area of focus at this point in time. I was also wondering if you have a target for private markets, let's say, sales in the second half of 2023. On the Italian client base and eventually on 2024, just to understand how big is still -- did the, let's say, the opportunity there for prompting growth in this kind of segment, which is the main area of effort I understand of the network right now. The second one is on the -- and then also if you can comment -- you already did, but for instance, on APAC flows, et cetera, if there are any expectations in the second part of this year in terms of inflows that we might take into account when considering your targets for the full year? And the second point is on the Nova Asset Management, the partnership with UniCredit if you can -- maybe you mentioned -- I missed it. The costs you incurred so far on the initiative and what we should pencil in for the second half of 2023 and eventually on 2024 to launch the initiative. I understand you and also your partners are quite committed to successfully launch these products on the network. And so I don't know if there are any, let's say, new expectations or anything that has changed since last time we touched base on this regarding the partnership.

Okay. Thank you very much. So let's start from the private market. Private market year-to-date have raised EUR 780 million, and this is in the first half. We are out with a number of different products in the raising activity. We have yet to close some of the funds, which have committed assets, but you have not seen them in the flow environment. So assuming a similar trend in the second half could be a reasonable number when it comes to Italy as well as our U.S. GP staking business. In terms of the flow environment on our Italian network, clearly, as we have tried to highlight, the number has been disturbed in a way by the institutional investor outflow, which has been consistently month after month divesting a portion of their assets, which has been concluded in July as far as this institutional investor is concerned. On top of that, we had the divestment of the prop money for EUR 150 million. So if you adjust for this, the Italian network would have raised more than EUR 100 million in the first half. So effectively, in a market conditions that will not worsen replicating this figure if not slightly more than that, could be a reasonable target to achieve, given also some recruitment activity that if positively completed will be benefiting the numbers. On the other regions, we do see from Australia, a very good environment as far as flows are concerned, typically, the first half is in terms of activity because of seasonality reasons, especially January and December are quite weak, and we expect an ongoing positive environment. On the Middle Eastern regions, there is still good demand for our solutions, both out of Turkey, Egypt as well as UAE. In Egypt, we are the operator with the largest number of retail investors in our products, just to mention you a data point with 100,000 investors. Clearly, the minimum investment amount from these clients is quite limited, but it provides you with an indication on how potentially we can be successful in terms of brand recognition over time if we are successful in delivering positive returns a larger number of individual investors. Out of Mexico, we will have the usual seasonality from the institutional investor during the month of August that redeems the fund and then over the rest of the year, put in the contribution from the pension fund, but this is just the same story that we have had since 2015. We do see ongoing contribution coming from the Sovereign Wealth Fund, which will complete flows from -- into our Mexican equity allocation. Brazil, as I mentioned, can be at an inflection point. And we have a very large product suite, a very good track record in terms of performance, which is set to benefit from that. And there is the sweet spot of the contribution coming from the distributor of our products, which is XP that is very much committed to grow our asset management activities down there. Probably the still weak point, which I mentioned several times, in the past quarters is still out of China, where things are moving slowly -- but this is partly offset from the positive flows that we are seeing out of Singapore. I will leave it to that. As far as Nova Asset Management, first half, low single digit, very low single digit second half slightly higher in terms of comparison between the first half because we will be closer to the launch of the activities, and therefore, we have to complete the recruitment of the key figures that the Central Bank requires. But as I -- as we mentioned in the past, the impact in 2023 of the step-up of Nova will be in the very low single-digit number, which is consistent with what we have had ourselves in 2022. You had something else on Nova or that's it?