B.P. Marsh & Partners PLC (BPM) Earnings Call Transcript & Summary

Good morning, and welcome to the B P Marsh & Partners Plc Full Year Results Investor Presentation. [Operator Instructions] Company may not be in a position to answer every question received during the meeting itself. The company will review all questions submitted today and publish responses where appropriate to do so. These will be available via our Investor Meet Company dashboard. Before we begin, we'd like to take following poll. I'd now like to hand you over to Brian March, Chairman; Alice Foulk, Managing Director, Sinead O'Haire, CLO; and Jon Newman CFO. Good morning.

Good morning, everyone. So I'm Jon Newman, the Group Finance Director, and I will be going through the presentation of our full year results to 31st of January 2022. This morning, I'd like to thank everyone for attending, unless some of you may be watching this recorded after the event. Unfortunately, Dan Topping, our Chief Investment Officer, is unwell, unable to join us today. So I'll be running through his part of the presentation this morning. Turning to Slide 2. This is a standard legal disclaimer that sets out about distribution and forward-looking statements, I'm sure you've seen many of these many times before. So Slide 3, a brief synopsis of B.P. Marsh, who we are? what we do? We're a specialist private equity investor in early-stage financial service businesses in minority stakes. We're based in the U.K., but we invest both in U.K. and internationally. We've got a highly experienced team with a strong background of focus on insurance intermediary specifically. We were founded in 1990, floated in 2006. We've invested in a total of 54 companies and currently have 15 in the portfolio. We take a medium- to long-term view with an average holding period at the moment of just over 7 years. And typically, we invest anything up to GBP 5 million, although generally less, probably close to GBP 1 million to GBP 2 million and follow on the funding. On to the following slide, this just sets out our Plc Board. As you can see, we have a wealth of experience with an average of over 30 years' experience in financial services, investing in buying, growing and realizing investments and the executive team themselves have all worked together for over 10 years. The following slide -- this sets out our track record for net asset value growth since rotation. I think the key message here is, as you can see, we've shown a consistent level of growth over the years despite wider macroeconomic issues at various times along the way. And we're currently at GBP 166.6 million. The following Slide 6. This slide shows our long-term share price performance, which overall has been very good. However, we are frustrated by the current discount to NAV. And I know there were a couple of pre-submitted questions regarding that, and we will deal with that later on in the presentation in the Q&A. I'll be running through the finances in a bit more detail later but the headline figures are we've grown the NAV from just under GBP 150 million from the preceding year to GBP 166.6 million. We -- that equated to a total shareholder return of 11.7%, including the dividend just under GBP 0.9 million paid in July '21. And we've declared a dividend of 2.78p per share to be paid in July of this year. The following slide sets out our dividends and our policy in more detail. Essentially, we are a capital growth player, but we do recognize the importance of dividends. And traditionally, we've paid distributions after key realizations, such as notably after the sales of Hyperion in 2013 and Besso in 2017. And in both those instances, we agreed to a 3-year dividend distribution policy. We have, as I said, declared the dividend, 2.78p per share, which is up just under 14% from the preceding year, but we also aim to maintain that level of dividend for the next 2 years. So in aggregate, that represents GBP [ 3 ] million, almost 100% of the realized underlying profit, excluding unrealized gains for the year to 31st of January 2022. It's also worth noting that the group does accept that if we have further successful realizations, the Board will revisit and reconsider the level of distributions for the following 2 years. Since rotation, we distributed a total of GBP 10.6 million, which is equivalent to just under 33p per share. We see a number of opportunities for continued growth in both the existing portfolio and in new business to continue to grow the NAV. And therefore, we aim to strike a balance between rewarding our shareholders with distributions when we have key realizations and reinvesting cash to continue to deliver long-term net asset value growth. The following slide sets out our investment model. We're aware that the number of people watching this might be new to the business. And so therefore, we think we might go into a bit more detail than we would usually do on our model and process. As we said, we are a specialist financial service investor in minority positions, typically between 20% to 40% holdings. Very few other private equity firms take stakes in this size, especially up to GBP 5 million level. We also provide follow-on funding for growth that would normally be working capital for new hires or acquisition financing. Within this sector, there is a -- what's known as a financing gap we often see because a lot of these sort of smaller stage businesses often find it difficult to get financing and certainly financing where there is some element of expertise around what they are and what they're doing and they require assistance. So apart from occasional sort of crowd funding or friends and family aims of investing, bank finance usually is unsuitable because they want guarantees on property. And so we see ourselves as filling back the gap, and there's the following slide on that. But the key thing in our investment model is, we invest in people. These are people businesses. They're not asset businesses. And so therefore, we focus on backing entrepreneurs and management teams with excellent track records of delivering growth. We have a clear focus, therefore, when working alongside these people, and that's one of the defining aspects of our investment process. The following slide sets out in a bit more detail about what we call bridging the gap. So typically, we invest from start-up to enterprise values of around GBP 25 million. And we tend to find that most small to mid-cap funds don't get involved unless the valuation is double that as that gives us a unique opportunity. At this level, we can be flexible with valuation multiples. They're usually significantly lower, and that enables us to build up the value with the business, both in terms of growing business, growing revenue, growing profit, but also in growing the multiples as well as we have set out from our realizations. We're flexible in the way that we approach every investment opportunity and we get to a stage where trade sell or grow these businesses to a stage where the small to mid-cap funds and larger private equity firms take a level of interest. Following slide sets out our investment opportunities. So in the year to 31st of January, we have 48 opportunities. I think it's fair to say over the last couple of years, with COVID -- there was a strong focus on the existing portfolio, but we are seeing an uptick in investment opportunities, asset out here, 38% of those emanated from our existing network and referrals, 44% overseas, as you can see from the chart, and the vast majority were in insurance intermediaries. Although Dan is not here to provide specific detail on some of the opportunities that he's looking at, we are looking at several at the moment, specifically within insurance broking. And I think Dan has been [indiscernible] saying he's expecting us to do another sort of 1 to 2 deals for the remainder of this financial year. In March 2022, we did make an investment in a start-up. We acquired 40% in Denison and Partners, which is a London-based Lloyd's insurance broker, which focuses on U.K. North American reinsurance solutions, in financial and professional lines. We've just given a few examples of where some of our previous investments have come from -- by our network or through referrals from advisory firms. Slide 11 sets our investment approach. So what differentiates us between other investment houses, we think sort of 3 key areas: our flexibility. So that's in terms of our ownership stake -- and we say sort of typically 20% to 40%. Kentro, which has been rebranded, originally Nexus. That's a good example where we originally went in for 5% shareholding, GBP 1.5 million and have grown that to holding above 19%. I'm going to Kentro in a bit more detail later on. Also flexible regarding following funding and timing. We take a long-term view. We're not restricted by set [indiscernible] . We therefore don't have to work to rigid sort of typical 3- to 5-year exit plans and therefore, work alongside management to achieve exits that are mutually beneficial. Prime example being Besso where we have invested for 21 years and we still delivered an IRR over that time of just under 22%. I think it's worth pointing out, we have some of our longest holdings of Besso and Hyperion was about 18, 19 years. There were opportunities to exit along the way. It wasn't that we were tied in for that length of time. We typically see opportunities every few years. But we stayed with them because we continue to see growth, and we continue to play an important part in their growth. Another important dimension is the value add. So we bring more than just plain finance. We have expertise across the board and within the company. We provide Board level representation, ongoing support for them that can be from a strategic, financial, legal. We provide referral. We often get through new business opportunities, where things aren't quite for us, that they might suit some of our investee companies, we can provide referrals, and we've got lots of contacts within the network. Following slide sets out our process from investment through to realization. Just a bit of detail. So once an opportunity is received. It's scrutinized by our new business department, which is headed up by Dan, that would then be championed, who will then run that process all the way through -- in project management through to our investment committee level and ultimately, Plc board. So we obviously -- we will meet with the teams. We will go through the business plan. We will interrogate it. And if we consider that it's an opportunity, we will formulate an offer letter and once we get that approved, we then go into the formal due diligence stage, and we will conduct financial, legal, commercial DD, most of the time that is conducted by external parties. And then completion. The completion is just the start, really. After that, we want to make sure the business plan is implemented. Although we are flexible and we change with the how the markets are changing, and we take on opportunities. We put an NED on the board, have regular communications, although and we take what we consider an eyes-on hands-off approach where the day-to-day management control is with -- of the business is with management, we provide strategic support. We also have a number of specific restrictions within the shareholders agreement in relation to anything that could potentially denude valuation, which requires our approval. But those are the things that are more sort of strategic as in acquisitions, disposals, that's kind of thing. We can also provide administrative, secretarial support we have, I mean, a an example, I was seconded for a while to one of our investee companies for financial support. We quite often do start-ups and there tend to be producers, underwriters who want to grow a business in a book, but might not have experience of actually running a business and doing the administry back [indiscernible] will help with -- and we have had a team on the legal and [indiscernible] side of things. So we provide more than just the money. On exit, well, importantly, you look at exit right from the start. Who we think this is probably best suited to. We look at the kind of multiples we think that we're going to return. And we target things that are sort of ultimately going to achieve 25% to 30% IRRs. We have some that achieve way in excess of that, some not there, but obviously, our long-term track record speaks for itself. We will obviously, through the strategy -- we've got contacts and we will advise on which investment partners to take on, who might be the best fit. And we see that through all the way to the venture exit. So the following slide sets out our portfolio, starting with the MGAs. Our total equity portfolio was GBP 149.3 million at 31st of Jan, which was up 14.7% over the year. This slide sets out the MGAs, which constitute 62% by value of our net asset value. Our MGAs gross basis are budgeting to underwrite premiums of over GBP 760 million this year, which should produce GBP 74 million of commission income and EBITDA of GBP 23 million for those businesses. The MGAs, these are right on behalf of the insurance companies using their capacity. But it is worth highlighting for those who don't know us too well, we don't invest directly in insurance, and therefore, we aren't exposed to primary risk on insurance losses. As you can see, our MGAs have performed exceptionally well since investment with a current value of over 3.1x the investment cost of GBP 103.3 million notable within the year, Kentro was up GBP 6.6 million adjusting for the new equity investment XPT, American MGA, up $5.8 million. SSRU, Toronto based up GBP 2.5 million, Ag Guard our Australian agricultural MGA up 2.1 million. So I think it's worth noting that the smaller investments are showing considerable growth, and it's not just the large ones. I'll deal with Kentro and SSRU in a bit more detail later. Following Slide 14 sets out our broking investments, which constitute about 13% of our current NAV by value. Whilst it looks a lot lower at 1.3x investment return, historically since inception, a lot of our growth has been from a track record of successful investment in Lloyd's of London market, insurance broking as well as internationally. Our broking investments, budgeting placed more over GBP 700 million of GWP this year, which will produce more than GBP 59 million of brokerage and more than GBP 15 million of EBITDA. The majority of our broking investments are relatively recent, having completed in the past 5 years. I think it's worth saying that we -- those are seeing the benefit for a period of continued premium rate increases, and we are seeing a lot of growth and development on that. And so they remain an important part of our portfolio. The following slide just sort of summarizes the point on the -- both the brokers and the MGAs, with about just under GBP 1.5 billion of premiums managed split almost 50-50 between the MGAs and brokers. On to Slide 16. Our largest investment, Kentro, which has been rebranded, formerly Nexus underwriting. Nexus is a specialist MGA. It's based in London, but has 16 offices across 9 countries, key areas it writes is D&O, PI, financial institutions, trade credit and it also has Xenia which is its trade credit broking arm, which is one of the largest independent U.K. trade credit brokers. Kentro, we originally invested GBP 1.5 million for 5% shareholding back in 2014. And we've subsequently invested up to a total of GBP 15.1 million that is now valued at GBP 51.5 million for over a 19% shareholding. That's a total IRR based on valuation of over 30% since investment. Key developments with Nexus during the year, Kentro I should refer to it, whereas is it refinanced with bearings and secured GBP 70 million of financing, of which GBP 50 million term debt, GBP 20 million available from new acquisitions. As part of that, they repaid a GBP 4 million loan to B.P. Marsh. We unused that to increase our shareholding. You see our shareholding when up from 17.5% to over 19%. Kentro, obviously, significant growth, GBP 55 million premium when we initially invested and it's estimating almost GBP 450 million in the current year. It's made 23 acquisitions and continues to source many acquisitions as part of its growth strategy going forward. Following slide SSRU, this is example of our sort of niche and flexible approach to investing, SSRU is a Toronto based specialist casualty underwriting agency in the sectors, mainly of construction, manufacturing and energy. This was startup investment, is now writing over CAD 70 million premium budgeted for this year, delivered CAD 4.6 million of EBITDA in 2021, which is incredible growth for such a small business. Highly leveraged deal, GBP 19 pounds of equity investment. We provided loans. All the loans have been repaid. And so we are currently looking at a GBP 9.1 million equity valuation. I think this is sort of example of the type of investment to B.P. Marsh specialized in where we attracted external investors to us. These are sort of small niche, but with excellent growth potential and shows that it's not just the Kentros of the world that are delivering excellent growth in the portfolio. Following slide, CBC, we assisted in an MBO about 5 years ago. This was a business that was fairly breaking even, we are back to the management, and it's now delivered GBP 2.2 million of EBITDA last year, up 33% on the year. CBC of a London-based retail and wholesale Lloyd's insurance broker. Another example of the leverage deal we provided GBP 5.1 million in loans, notably during the year based upon their excellent performance, they refinanced GBP 3 million with Coutts and that led to GBP 2 million of our loans being repaid during the year. They're continuing to grow strongly, having taken on a number of people and a number of teams. And our equity is now valued at AUS 1.4 million from a total equity of AUS 0.8 million. Following slide, EC3, whilst we've had excellent successes, there are occasional disappointments, I suppose. And we're not immune to potential difficulties in the wider markets. Unfortunately, EC3 was significantly adversely affected by COVID-19 pandemic. Their contingency division, which was a large proportion of their revenue, which was providing event cancellation, insurance effectively dried up overnight with the start of COVID-19. And then once the market started to open up again, unfortunately, the division left to join the rival broker, we did assist EC3 in securing a large settlement for that, but as a result, with a significant reduction in overall revenue, we have reduced our valuation in EC3 significantly. Whilst this is clearly disappointing, we have continued to provide ongoing support for EC3, and we consider our long-term and flexible approach enables opportunities, we've had ups and downs with some of our [ recalled ] best and high successes in the past. And so therefore, whilst it's disappointing, I suppose, looking at it from the black and white, there's a lot of upside potential versus downside risk at this point in time based on the valuation. And we are aware that they are starting to achieve traction on a number of new business initiatives and EC3 consider their prospects growing for the future. The following slide, we have 1 non-insurance intermediary, which is LEBC Holdings, which is an IFA, which might be unusual within the portfolio. And we have had a track record of successfully investing in typical businesses like this before. We had the investment in Thompson Group, which we sold to AWD for a very good return back in the early 2000s, which was a discretionary fund manager that we sold to [indiscernible] in the mid-2000s. And LEBC has gone through a restructuring, but delivered GBP 3.2 million pretty exceptional EBITDA last year and continues to grow EBITDA for the current year, which is an excellent return to form. As you may be aware, unfortunately, founder and key shareholders Jack McVitie passed way, but in January, Tavistock investments acquired their stake for GBP 10 million, which underpins our valuation of GBP 25 million for our 59% holdings. I think it's worth noting that the -- though we say we're typically a minority investor, we didn't seek from the outset a majority holding in LEBC. That came around as a result of one of the founders retiring -- and we were asked if we could take on that holding to enable them to remain independent so that was one that was sort of more opportunistic, but it's quite unique. We've had a number of successful realizations during the year. And the next slide set them out. I won't go into too much detail on this because I'm sure you've seen it all in the RNS announcements, but MB, which is a high-value motor MGA was sold into ATC, which is another MGA Australian we hold -- and our original investment in MB of GBP 0.5 million in equity was effectively rolled up into new shares at a value of GBP 3.6 million. so we consequently increased our holding in ATC from 20% to 25.6%. But overall, that delivered a 29% IRR or 9x multiple of equity invested. So that was an excellent return back. Following slide, Walsingham. This was a London-based MGA and Taxi and courier fleets, original equity investment of GBP 0.6 million. We sold GBP 4.9 million. I think it's worth noting that we value that GBP 3.3 million at 31st of January. So that was an excellent return based upon our last valuation and delivered an overall IRR of 22% and a money multiple of 8x. Finally, on the realizations agreed during the year, but completed just after we sold a majority of holding that we have in Summa to Acrisure. That completed in March and was GBP 8.1 million of equity versus an original GBP 6.1 million cost. I think as Dan has quoted at the bottom of their saying, in isolation, whilst that return of 5.5% IRR, might be below portfolio expectations. I think given where Summa were, I think a number of our investors and analysts have possibly queried how long it might take us to be able to realize that investment thinking that we might be in there for another 3 or 4 years. And specifically, might need to provide further funding to it. It was a consolidator of regional insurance brokers in Spain. And I think what we've managed to achieve there is an excellent cash return and replenish the liquidity for the business. And we wish management all the best in the future with Acrisure. Following slide, just deals with a brief overview of the market. Clearly, we could consider that the portfolio companies have performed very well for the year. We've made a number of successful realizations at or above valuation. We now have significant increase in liquidity from -- we were GBP 0.7 million in cash last year with GBP 1 million of borrowings and we're now GBP 17.5 million, but we've just conducted a follow-on investment in XPT. So we've got GBP 14.7 million now. So we've got availability to pay dividend and for investing in new opportunities and the existing portfolio. As discussed, we've made a new investment in Denison and Partners, and we continue to see other interesting opportunities. There's been significant consolidation within the insurance market, and we consider to see opportunities from that in terms of individuals and teams who want to see that sort of opportunity to start off on their own and that gives us excellent advantages and opportunities going forward, both within new and existing businesses. So as Dan has commented here, whilst there are some signs, the rate increases are slowing, it doesn't seem that price increases will continue throughout 2022, which will continue to benefit our portfolio. We clearly continue to monitor the possible effects of the conflict in Ukraine out on the insurance market, although at this point in time, the effects of the COVID are particularly minimal across our portfolio specifically. I think the largest area, as Brian alluded to in the Chairman's report and segment was the fact that inflation may well bring its own pressures on FX and things like that. But now our overall view is that we expect that the gains that we make in within the portfolio will outstrip any potential detriment on that slide. Following slides set out our key financial highlights. Overall NAV increased by GBP 16.7 million and 11.1% for the year to GBP 166.6 million, and that equates, as I said earlier, to a total shareholding return of 11.7%, including the dividend of GBP 0.9 million paid in July 2021. Overall, the group delivered consolidated profit before tax of GBP 19.4 million, up GBP 5.7 million over the prior year. The majority of that profit relates to the increase in valuations of the investments as covered earlier with the equity portfolio rising by 14.7%. One of our core strategies is to ensure that the yield from our portfolio covers our operating expenses that we are depleting, our investment cash for working capital. On an underlying basis, it's pleasing to see the profit of GBP 3.2 million, up from GBP 0.9 million in the previous year, although the uplift over the year was in relation to the successful realizations that were realized above our previous valuations. A final dividend of 2.78p per share or GBP 1 million has been declared to be paid on the 29th of July, and has to be approved at the AGM. And that's an increase of 14% over the previous year. And as stated earlier, the intention is to maintain at least that level of dividend for the next 2 years and review based upon further following successful realizations. Overall, since flotation, the group has delivered average compound NAV growth of 8.4% and 11.6% since inception. That's after all expenses, tax and distributions and excluding any capital raised on the markets. This next slide sets out the key financial investment realizations and loan portfolio movements during the year. As discussed, we've invested GBP 8 million in equity during the year, 4 million new shares in Kentro and rolled up GBP 3.6 million of our value in MB into ATC shares. And we also acquired some further shares in Paladin from an exiting shareholder. We also delivered GBP 8.8 million in equity proceeds, GBP 4.9 million from Walsingham and GBP 3.6 million from MB, and we sold some shares to Paladin under an option that they canceled -- they bought back and canceled. And obviously, post year-end, we had the Summa disposal as well. Loan portfolio. So I think it's worth just covering a little bit on that. Given we don't set exit clauses for a medium to long term investor, we do often structure our deals with a mixture of debt and equity, but not ever just debt. That enables the yield to be received on the investments to cover around operating costs, and the loan repayments help to replenish our capital funds rather than having all of our capital funds tied up over the period of investment. I confirm all of the current loan book is listed and are up-to-date both capital and interest repayments despite pandemic and all the loans are valued at par. So the loan portfolio at 31st January 2022 stood at GBP 10.4 million, had come down significantly from GBP 17.1 million the previous year. We had GBP 7.8 million total repayments, GBP 4 million repaid from Kentro, that as I said, we reinvested in new shares, GBP 2 million from Paladin, which is the holding company for CBC when they refinance with Coutts. And we also had GBP 1.1 million from Mark Edward Partners when we parted company with them, and that was fully provided against. So it was a GBP 1.1 million effective net uplift. So we delivered GBP 8.6 million in cash at year-end, up from GBP 0.7 million in the previous year. And we paid our loan and the GBP 3 million loan facility that we had in place ceased on in January. And now we've got plenty of cash in the bank, GBP 17.5 million as we reported in our final results, the GBP 2.8 million, $3.5 million investment in XPT has now completed. And so we've currently got GBP 14.7 million, though we're slightly ahead of that at this point in time. We have a current discount to NAV of 31%, which we consider based upon the current share price, these are unwarranted based upon our track record and NAV growth. So turning to summarize. So why invest in B.P. Marsh? We're a leading specialist investor with an excellent track record and a team with a relative experience. Although we specialize in financial service businesses with a specific interest in insurance intermediaries, our portfolio is diversified, both in product lines and geographically, which mitigates the risk and the insurance intermediary space based upon where the market is in consolidation and where multiples are going, continues to offer excellent returns to savvy investors. Reiterate, we've achieved 9.4% compound growth since flotation, 11.6% since inception after all expenses and realizations through identifying, growing opportunities and delivering value and return to shareholders as demonstrated by growing the NAV to GBP 166.6 million despite challenges on macroeconomic basis we've faced over the last few years. Our liquidity is now strong, having increased it up to net GBP 14.7 million. We continue to see excellent opportunities in new investments and follow-on -- as evidenced by our recent follow-on investment in XPT. As we say, we consider the current discount to NAV of 31% to be unwarranted. So this concludes our formal presentation. I will now hand it back over to Paul on IMC, and then we will deal with Q&A.

I am [ Jesse Jones ], thank you very much indeed for your presentation. [Operator Instructions]. You can take few minutes to review those questions submitted already. I'd like to remind you the recording this presentation along with a copy of the slides and the published Q&A can be accessed via investor dashboard. I'd now like to hand you over to Tim Pearson, to pose your questions to the B.P. Marsh and Partners team where appropriate to do so.

So we had some pre-submitted questions to start with. The first question is Brian Marsh has led this company with great success for many years. Every business has to do a succession. So given his age and roughly 40% shareholding, I'd appreciate hearing any comments he has to make on the issue of succession planning. Brian, I'll hand that one over to you.

All right. Well, regarding the matter of succession planning, my colleagues here on the board, and I continually monitor succession planning in all areas of the business, not just in the chairman's office. And we remain confident that the current management team will be able to lead the company effectively when the time comes. When the time of my departure comes, there will be a slight slotting up of everybody. Alice is Managing Director, will either handle my affairs entirely or she might appoint, for example, a non-executive Director, non-executive Chairman to take care of [indiscernible] Maybe one of the NEDs might well take on that position. John looks after finances anyway, Daniel, the business itself. And I think that there is every reason to believe that we have succession planning addressed right from the beginning.

I had a couple of questions on this. I'll ask one of them. Hopefully, that should summarize the 3 questions I had on this. Given the discount at which BPM's shares trade relative to the NAV of the underlying assets, why has the company not pursued share buybacks? Will it do so in the next financial year?

Sinead, do you want to deal with that?

Yes.

Sinead is our Chief Financial Officer, she will address that topic?

So yes, we've had quite a few questions about share buyback. So I'll answer them all together and do my best to do so. We've announced previously that the combined shareholding of the Chairman and his counterparty is roughly around 42%, which activates the City Code on takeovers and mergers, and therefore, share buybacks will result in increased shareholding of the Chairman and his counterparty and trigger a requirement for a mandatory offer to be made in accordance with rule 9 of this code. We have investigated opportunities and ways around invoking this, which would require a whitewash approval. And over the past 3 years, we've reviewed how we go about that and the cost in doing so. And after investigating authority, the Board decided that that's not the best use of funds and instead, those would be better used towards payment of dividend, which is something that the Board knows is a priority for the majority of its shareholders. However, that being said, this is regularly reviewed and therefore, it's quite likely that this approach may be amended or changed in the future, but it will just depend on the situation at that time.

Another question. The company has done a great job of building value over the past decade, but this is not reflected in the share price. What is management planning to do to reduce the gap between the share price and NAV, and would it consider special dividends over buybacks as Mr. Marsh's large holding [ represents ]largely purchases?

I think we're probably sort of -- there's a number of points on this in terms of reducing the NAV. I think it's fair to say that the markets in general are reflecting share prices -- so it's not unique to be B.P. Marsh. We're probably about sort of 10% down as a factor of what's going on in Ukraine and the wider macroeconomic factor despite the fact that we continue to deliver strong results. So I think from our perspective, back to side, our focus is to continue to develop the portfolio, to grow the NAV, deliver successful realizations as we have at or above past sort of valuations and continue to engage with investors and new investors. This is an example of where we are providing further update to the market, plenty of news flow, and dividends. We've mentioned sort of we'll continue to consider them based upon realizations. And I think sort of as a whole, and they should get -- we have managed to get the discount down to sort of about 12%, although it's probably near about 15% at one stage and I think that's what we will sort of hope to achieve just by continuing to do what we do. We're best really. And as we continue to do that and get more interest from shareholders who want to follow in that path and see the value there.

John. Another question. Can -- which I think is slightly covered in the presentation, can you comment on the write-down in the value of the investment in EC3 brokers?

Yes. I think we covered that off on Slide 19 of the presentation. It's available on there again, but it was specifically to do with COVID-19 and a reduction in a sizable part of their business revenue. I mean if you were to see it from the past, you'll see that we've always written down any of our investments, however, a bit nervous. And usually, we overdo it. And therefore, we are able to climb up a year or 2 later, that is a probably good idea to be cautious rather than not.

Another question on dividend policy. Can you make a comment on dividend policy? The latest payment is below that in 2017/'18. Is the dividend a function of the quantum of disposals? Again I think we touched on it in the presentation, but any...

Yes. I think we covered that off in Slide 7. And yes, I think that is fair, as we said before, we've got -- and we have historically declared dividends out of successful realizations. We've done the same. We have declared a GBP 1 million dividend, although and with an intention to maintain that for the next 2 years, and we will revisit that following further successful realizations.

Question has come in regarding how often are you in a competitive process with other bidders for investment opportunities?

We try not to be is the answer to that. Our approach is, Alice and I, deal with these things of sort. Our approach to that is if someone wants us to invest in their business, and we wish to do so, and we make an offer to do so. And they then pop up and say, oh, well there is someone else over here who will do better, we pull out. We're not interested in competing.

Sorry, you got. No, I mean we are in a people business, as you know, Tim, and ultimately, we support people. And if they can see value in our investment [indiscernible] the fact that it might not be the cheapest or best terms. We offer over and above what the banks or the products who in our view do, in terms of backing management and our flexible approach.

Our attitude is, either they want to come in with us or they don't. It is up to them.

And if they don't, they can go somewhere else.

And if they don't, they can go somewhere else.

I would say it's very rare, actually. I think we are focused back on where we said about of bridging the gap. There are people who were sort of in and out, were generally more generalist investors. And so therefore, we are identifying with the people who want to come and get investment from B.P. Marsh, they want it for a reason. So we don't tend to be involved in competitive processes. Next question?

There's been a couple of other questions, but we will probably provide written responses to those just to make sure that we get the full detail after the presentation, which will be made available by IMC. So at this time, there are no further questions. So of course, I'll hand back to you.

That's fantastic indeed, thank you very much indeed for asking those questions. As Tim said, the team will have the ability to review any further questions, we publish responses where appropriate to do so on the Investor Meet company platform. But if I may, just before redirecting investors to provide you with their feedback, which I know will be important to you and the team. If I could just ask you for a few closing comments, please.

Well, my only closing comments, I think, probably would be that I hope you've enjoyed listening to us, and we've enjoyed the opportunity to present to you. We say what we can, we do what we can, and we haven't done badly you much agree.

Fantastic. Thank you, indeed, Brian. Thank you, indeed, to the whole team for updating investors today. Can I please ask investors not to close the session. They will be automatically redirected to provide your feedback. Now the team can better understand your views and expectations. This will only take a few moments to do and it's greatly valued by the company. On behalf of the management team of B.P. Marsh and Partners Plc, we'd like to thank you for attending today's presentation. That concludes today's session. Good morning.

Thanks, everyone.