Foresight Group Holdings Limited (9LR.F) Earnings Call Transcript & Summary

Good morning, and welcome to the Foresight Group Holdings Limited Results Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question it receives in the meeting itself. However, the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand over to Gary Fraser. Good morning to you, sir.

Good morning, everybody. My name is Gary Fraser, and I'm the CFO of Foresight Group, and I'm here today to present the results for the year ended 31 March 2024. So we could just move on to the first slide. So I mean, in terms of Foresight, we have 3 principal divisions: Infrastructure, Private Equity and Foresight Capital Management, which is our open-ended investment company business. And what we're trying to do is to invest to build a sustainable future and growth-driving economies. Over the next 5-plus years, we need to increase the amount of money that we're investing in infrastructure globally from about GBP 1.8 trillion currently up to GBP 4.8 trillion by 2050 and beyond. So there's a lot of work to be done there. We're one of the key players in that market, and we're striving to raise more money and invest more money in infrastructure than ever before. In terms of the Private Equity part of the division, it's regional private equity in the U.K. So we're growing local economies, investing in small businesses and also creating jobs around the U.K. and local environment. Moving on. So in terms of Foresight, over the course of the last 12 months, we've had very strong earnings momentum, and that's as a result of multiple drivers of growth. Over the last 3 years, since we IPO-ed in February 2021, we've had a demonstrable track record of profitable growth, and that's been driven by long-term structural growth in our key markets, and it's a highly scalable platform. We can grow all 3 divisions: Infrastructure, Private Equity and Foresight Capital Management. This is supported by a high level of predictability in terms of our future revenue flows, which are currently recurring annual revenues of about 87%. And it's very much built on the foundations of a diversified and resilient business model, which has stood the test of time. Foresight has been growing 40 years this year, originally founded in 1984, by our still Executive Chairman, Bernard Fairman. I'm -- and me myself, I've been here 20 years. So we've been around a long time. We've developed the business model over that period of time, and it's proven to be very successful. And this is all underpinned by a culture of sustainability. In addition to publishing our annual report and accounts yesterday, we also published our sustainability report. And for anyone that has that little bit of extra time, I certainly recommend looking at our sustainability report and some of the areas we're really pushing hard in developing the business in terms of making it a really good, sustainable partner for all the key stakeholders in the business and in our companies in which we invest. Moving on. So in terms of the track record of profitable growth that I talked about a little bit earlier. So when we first listed in February 2021, just a month later, we produced our first set of annual report and accounts as a listed company with profitability, which is core EBITDA pre-SBP of about GBP 23.9 million. Over the last 3 years, we've managed to grow that significantly, last year hitting just over GBP 50 million for the first time; and this year, increasing by 18% to GBP 59.3 million. So we've continued to make real progress in terms of driving the profitability of the business. All of that delivers a 35% -- just over 35% CAGR over the 3 years. And the vast majority of that is driven by organic activity, 70% or thereabouts. In terms of margin expansion, over the period, we've gone from 34.6% up to 42%, which is an expansion of about 7.4 percentage points. But in the last 6 months of FY '24 just ended, we actually achieved 43.1%, which hits our medium-term target of 43% set out at the IPO. So how does that look in terms of AUM/FUM? Well, over the period since February 2021, we were at GBP 7.2 billion, sorry. During that period, we've grown to over GBP 12 billion. And at the end of the first quarter, which we've also announced as part of the annual report -- results presentation, we're now -- we've gone from 12.1% at March up to GBP 12.6 billion at the end of June. So we've made real progress during the last 3 months alone. So a lot of work still to be done, but fundraising during the last period has been exceptional. Why has that been? So we've had a first fund closed on FEIP, Foresight Energy Infrastructure Partners II, at EUR 300 million. That was announced earlier in June. So some really good progress there. And we've also had a really good start to Q1 in terms of retail fundraising activity. So how does that sit for the rest of the year? Well, GBP 500 million in the first quarter. The run rate is obviously very attractive in terms of what that can achieve for us during the period. And one of the reasons -- that's one of the reasons that we've changed our guidance, which I'll come on to a little bit later. But just in summary, our guidance for the next 5 years is to double core EBITDA pre-SBP from just over GBP 59 million to GBP 120 million over that 5-year period and purely through organic activity. So no M&A in that number. And that would be an annual return compound of about 15% growth. Moving on. So in terms of the different parts of business and how they flow through in terms of the results that we're talking about today. So the investment division's -- Infrastructure is just under 60% of the business in terms of core EBITDA pre-SBP; Private Equity is about 38%; and Foresight Capital Management is about 3%. It's interesting to note in terms of an AUM, a 24% is LP; 68% has Evergreen, which is a really high proportion; OEIC are about 6%; and Others 2%. But in terms of distribution of those, over 2/3 is institutional LP investors and about 40,000 retail investors at 31%. And then finally, in terms of geography, 54% is U.K.-based, 28% Australia, 15% Europe and 3% U.S. And that's really changed quite significantly since IPO. Since IPO, I -- went about 80% was in the U.K. So through a combination of investing in non-U.K. assets both in Europe and Australia, but also the acquisition of ICG in Australia in September '22. We've managed to diversify away from being pretty much U.K.-focused to very much International-focused. And as we sit here today, about 80% of our pipeline of new opportunities is non-U.K. So we'll see further geographical diversification in Foresight's asset classes going forward. It's worth saying again, just coming back to core EBITDA pre-SBP that in terms of Private Equity, it's probably about AUM delivering well into the 30s in terms of core EBITDA pre-SBP. And so it's particularly attractive margins. That said, the other 2 strategies, Infrastructure and FCM are very much more scalable strategies. Now they've been in a period where interest rates have been particularly high, as everyone knows. And because they are interest rate sensitive assets, that's affected the fundraising in those areas. But as I alluded to earlier, we're starting to see fundraising both institutional and retail coming back into both of those spaces. And I'd expect them to be significant contributors into our fundraising targets during the course of both FY '25 and beyond. So I think what we'll see over the next 6 months-plus is all 3 divisions really firing at all cylinders in terms of fundraising, and that then flows through to further deployment. In terms of financial results, so the AUM bridge. So at the end of March 2023, we're at GBP 12.2 billion. And then we had inflows and outflows during the period, almost netting off, but slightly dropping us down to 12.1%. On a constant currency basis, if you look at the acquisition we made in Australia, it would be slightly up. But either way, we're roughly the same as we were at the start of the year. However, I think the important part is the outlook for FY '25 in terms of FUM/AUM. And as I said a little bit earlier, that's increased by GBP 500 million to GBP 12.6 billion at the end of June. So we're making really good progress. I think the other thing in terms of the AUM bridge, although we were flat during the period, that belies the underlying quality of earnings driven by that flat, if that makes sense, because -- what we did lose was some lower-margin OEIC business, but we gained that in higher-margin products as well. So although it was offset in terms of the AUM bridge, it was very much accretive in terms of both revenue and profits for Foresight as a Group. So segueing into revenue, during the period, we increased revenue by about 19% from GBP 119.2 million to GBP 141.3 million. Most of that was organic, so GBP 12.5 million of that was organic growth and GBP 9.6 million related to the acquisition activity, which was principally in FY '23, Australia and also an acquisition of the Downing Ventures portfolio. As I said, right at the very start, 87% of our revenues is recurring annual revenue and remains well within our guided range of 85% to 90%. Slight increase in non-GBP denominated revenues, which links back to the geographical diversification of our AUM mentioned previously. So up to 21% from 16%, and we'll see gradual increments in that as we do more non-U.K. investments going forward. So in terms of costs, costs have gone up by about 12% during the year on a rebased FY '23, and that was rebased because of the acquisition activity during that year. This 12% increase excludes a GBP 2.9 million noncash adjustment for impairment of intangible assets, which is a noncash item. The rise in staff costs reflects a number of one-offs associated with the delivery of cost saving initiatives, but it also reflects an extremely high inflation environment during the last 12 months plus. We've started to see that come down, and it's hit 2% recently. So I don't expect to see the same level of cost inflation in the current year as we've seen in the prior year. So I think that will be to a benefit of margins in the medium term. Next slide. So profitability, touched it -- upon this a little bit earlier as well in the early summary. But we've gone from GBP 50.2 million at the end of FY '23, up to GBP 59.3 million at the end of FY '24, and consensus estimates for next year between GBP 64 million and GBP 68 million, and I'm confident that we'll be within consensus. A very much successful fundraising into higher-margin products and longer-tenured vehicles during the period, and the annualization of FY '23 M&A activity added an extra GBP 5 million as well. As I mentioned earlier, effective cost management during the period, albeit inflation did have an impact. We delivered 42% core EBITDA margin pre-SBP in FY '24, which is slightly down from the 42.1% a year earlier. But in saying that, the breakdown between the first half and the second half of the year showed a real improvement because of cost reducing measures that we took, and we achieved the 43.1% in the second half of the year. So I think that augurs well for FY '25 and beyond in terms of margin improvement. Cash generation is always a key for me as an accountant and as a CFO. And you can see a large alignment between our cash generation and our profitability measure in terms of core EBITDA per-SBP. So cash generation was around about GBP 50 million, in addition, adding back debtors that were still over -- still outstanding, we've paid post-period-end. We get ourselves up to for all intents and purposes, the 59.3% when you add back the cost-saving initiatives as well, one-off payments with regards to restructuring areas of the business. So really strong cash generation in the period. And that's given us a high degree of confidence in terms of both increasing our buyback commitment from GBP 5 million to GBP 10 million, but also in terms of maintaining our 60% dividend payout ratio and the dividend actually increased from 20.1p in the last year up to 22.2p in the current year, which is an increase of about 10%. So -- and all of that is made possible because of the solid cash generation of the business. So moving on. So in terms of guidance, so since -- just looking backwards before we look forward in terms of guidance. So since IPO, we set out our targets there in terms of AUM growth at 20% to 25%, and our compound annual growth rate was 19%; 85% to 90% recurring annual revenue, and we've been pretty much in the middle of that range ever since IPO. We targeted 43% core EBITDA pre-SBP margin over the medium term and -- which was by the end of FY '24 and achieve that in the second half of the last year; and the 60% debt payout ratio we've achieved every year since IPO and setting that target not long after IPO. The launch of IPO itself, it was 50%, but given the really strong cash generation I've just talked about, it was obvious to us that increasing it quite early was the right thing to do. So in terms of guidance, going forward, we've set ourselves a new target of doubling core EBITDA pre-SBP in the next 5 years. And it's really -- the business model gives us the confidence to do that. So all 3 divisions are contributing to the core profitability of the corporate group. We've got a high degree of high-quality income, as I said earlier, 85% to 90%. So doubling from GBP 60 million just under right now to GBP 120 million in 5 years seems like the obvious thing to do. Clearly, it's a challenging target. It's a compound annual growth of 15%. But it's something that, given what we've achieved already since IPO that we've got a high degree of confidence in achieving over the next 5 years. And if I look at the fundraising we've had in the current 3-month period, but also extrapolating that over the next couple of years in terms of both retail and some of the new strategies we have in the institutional side. I have a high degree of confidence, as I sit here today, that we'll at least achieve the doubling in the next 5 years, if not overachieve. And I think that's all underpinned by strong organic growth. The institutional strategy is maturing as we've seen from FEIP I hitting its full investment period, FEIP II having a first close less than 6 months after the closing of FEIP I. And the retail fundraising is as solid as it's ever been because of the strategies we're offering investors and the returns and performance that our funds are delivering for people. Now clearly, M&A remains a key part of the growth strategy, but that's not included in this new guidance. So that will really accelerate growth even further to the extent we do any M&A. Moving on. So I talked about the drivers underpinning guidance. So just taking them in a bit more detail. Regional Private Equity. So what we're doing there, we're providing capital for regional SMEs in the U.K. and in Ireland, typically investing GBP 2 million to GBP 20 million. But most of those are in the up to GBP 5 million range. And because of that strategy and that country-wide strategy, we don't really see that many competitors in the market. There's 1 or 2 others that have reached regional U.K. and Irish coverage, but not that many. And so that really is a USP in terms of our ability to originate deals and also invest in the best deals. It gives us a really good choice. And you can see that in the returns that we're generating. But you can also see the ability to grow these small businesses. So you're creating regional economic growth, and we're also generating a lot in terms of job creation as well. So there's a win-win for our local investors in terms of these regional strategies. We're also seeing really good exits from these portfolios at the moment. So often selling them on to strategic acquirers or even secondaries into people that have more money that's in terms of private equity and want to grow them or take them into that next level, perhaps internationalize them. So there's a lot to be said in terms of the exit strategy and the multiples that we've been creating and delivering returns for investors. So moving on. In terms of Infrastructure, we're very much focused on real assets there, as you would expect. The energy transition has been a really strong part of that, and we see that as a very significant and expanding international investment opportunity. There's very strong demand for our flagship strategy. As I said a little bit earlier on, FEIP I flows 70% over target, and FEIP II is targeting EUR 1.25 billion. It's already had a first close at EUR 300 million. And I'm optimistic about second close during the current financial year, so to March 2025. So 2 closes during that 1 financial year. And that will really -- that's part of underpinning the guidance of doubling core EBITDA, pre-SBP over the next 5 years because we're starting to see a real momentum in terms of institutional infrastructure fundraising, which then adds to the fundraising capabilities that we've been delivering on in the Private Equity side of the business for the last few years as well. So we've got extensive experience and capabilities in providing end-to-end investment solutions within infrastructure. I talked about the international geographic reach that we have and successful track record of fundraising and deployment in these areas. Opportunity to launch multiple vintages of flagship strategy. So in addition to FHIF, we're in the very early stages of premarketing our hydrogen strategy as well, which is targeting EUR 750 million. And that's a real growth opportunity, building on our extensive existing real asset investment history in the space, and we've already made several investments into the hydrogen space. And we have a proven ability to identify, develop and launch new products to meet investor demand. In terms of listed equities, this offers a highly scalable investment opportunity and leverages our private market experience. That has suffered from the high interest rate environment, there's no question, falling from about EUR 1.3 billion when I talked to you last year to about EUR 750 million as we sit here today, but we're starting to see the redemption slow down. We're starting to see performance come back. And hopefully, if we see an interest rate cut in August and maybe one more before the end of the year on top of that. Then I'd like to think that we'll start to see wealth managers reallocating into these strategies, both a combination of improving returns, but also the need to deploy money as the safety of cash deposits, you start to see less returns on cash deposits. So I think the macro is moving in the right direction for that particular Foresight strategy. So in terms of outlook and trading updates. So I alluded to it right at the very start, but we've had a really strong first quarter to the end of June with AUM and FUM, both up by GBP 0.5 billion -- GBP 500 billion. That includes the FEIP II first close at EUR 300 million. And we've also very recently completed a EUR 300 million Greek solar deal. So we're making larger investments, which will then also drive operational gearing and flow through to margin improvement over the medium term. We completed 4 exits, which had an initial investment total of GBP 17 million, returning GBP 66 million in terms of sales proceeds. And I alluded to earlier, we extended the buyback program from GBP 5 million to GBP 10 million. Just flipping back to that the 4 exits already. So exits are important because several of our funds have either carried interest associated with them or performance fees when performance is appropriate or over a certain hurdle. So with these exits and the returns being made, it's very likely that we'll see performance fees and carried interest with a higher weighting in the first half this year compared to last year, which again underpins the FY '25 assertion, if you like, that I expect us to be within the consensus range for improving over the last year. So prior-year fundraising into higher-margin vehicles has been very successful, real quality in our retail distribution platform, which continues to deliver fundraising success. We've got a robust institutional infrastructure fundraising and deployment pipeline. The deployment pipeline currently is in excess of GBP 5 billion. So we just need to go out there and raise more money, and we've got the deals ready to go. And there's a continued expansion of our very profitable institutional regional private equity strategy. And I'd hope to have good news about further regional offices and regional funds being launched by the end of H1. So by the end of September, I hope to have some positive news in that regard. So I think, as I said earlier, all 3 divisions within Foresight have either going to maintain their existing momentum or the macro moving in the right way for us in terms of a benign interest rate environment should see improvements in all 3 areas. And it makes me very excited in terms of not only the current year, but the next few years for Foresight in terms of delivering on our new guidance. As I mentioned at the very start, strong earnings momentum and multiple drivers of growth. I'm not going to go through the slide again because I think we've covered it during the course of the presentation. But it's there sustainable, diversified, predictable, growing markets, scalable strategies and extremely profitable in terms of Foresight Group as a business. So with that, I'd like to thank everyone for listening to me for the last 20 minutes or so. Hopefully, that gives you a flavor of the real momentum behind Foresight and its current strategies, the profitability that we're going to deliver for our investors and also what we're doing in terms of sustainability, delivering on regional growth, but also international infrastructure projects that make a real difference in terms of the sustainability agenda, the decarbonization agenda and the energy transition, in which we're all heavily involved. So with that, I'd like to open it up to Q&A, and thank you.

Perfect. Gary, thank you very much for your presentation. [Operator Instructions] I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via your investor dashboard. As you can see, we have received questions throughout today's presentation. And Liz, at this point, if I could just hand over to you to chair the Q&A, that would be great, and then I'll pick up from you at the end.

Thanks, Alessandro, and thanks, Gary, for taking us through those slides. So I think just -- I'm just trying to group the questions together a little bit. I think we'll start with the one on Infrastructure. We have had a question about which area within Infrastructure are you most positive about at the moment? And which of your geographical locations is looking most positive going forward?

So I mean in terms of Infrastructure and the ones I'm most positive about, I think the energy transition and wider decarbonization agenda is very exciting for us. And FEIP II is one of the large investors in that area. So that goes beyond traditional renewables like wind and solar, which are still important. But we're also looking at grid solutions, both in terms of flexibility and connectivity. So in terms of flexibility, we're looking at long and short duration storage. So that can be things like pumped hydro, but also the creation of green hydrogen, which is a good long-term store of energy. And that all helps with -- in terms of flexibility, which you need to have if you have a lot of renewables on the grid. But I think equally important is connectivity and therefore, that is a wider grid piece. So the ability to be able to translate wind generation in the Nordics down to night-time requirements in Southern Europe and solar during the day up to the Nordics, et cetera. So if we can work on the grid on an international basis, so it's cross-border. It would give us a really far more efficient grid network across Europe and beyond, so that we can really maximize the potential of expanding the grid network but also renewables across jurisdictions, not just within our own jurisdiction. So I think a combination of traditional renewables, hydrogen -- throwing hydrogen into that mix, long and short duration storage, but also the connectivity of the grid. I think will all be big investment themes in the next few years.

We then have a couple of questions related to M&A. So if I may just ask you a couple of parts to the same sort of thing. So the first is, how do you plan to balance organic growth with potential accretive M&A to achieve the new guidance that you published today? And alongside that, in terms of M&A, are there any particular capabilities or asset classes, which you would be able to bring in to the Group?

So in terms of -- so the new guidance is all predicated on organic growth. I think it's worth saying that. So the 15% compound over the next 5 years, that doubles profits is all based on organic growth. So M&A activity would accelerate that growth or even increase it. And so a combination of the 2. So our real focus right now is organic growth. But we are looking at -- we're always looking at M&A opportunities. There's no question that's true. But I think how would we achieve that? So right now, I think our -- the multiple we're trading on is between 8x and 9x EBITDA. And I think we have a bit of a dilemma because you've got private market vendor expectations that are well in excess of that, sometimes even mid-teens. And therefore, what we're not going to do in terms of M&A is pay those high multiples and dilute existing investors. That's why we've increased our buyback in from GBP 5 million to GBP 10 million because we see better value in buying our own shares at 8x-and-a-bit multiple than we would in terms of overpaying for M&A assets. So until we see a rebalancing or a resetting of private market expectations, then I think our M&A activity will be limited. But that is not to say that we can't make M&A activity -- can't do M&A activity when we see the right opportunities. Clearly, we will. But we're not going to overpay for it. And so that's one of the keys around the balance, is looking for those that are priced appropriately given the -- what public markets are pricing businesses like Foresight and others are in the current environment.

And any particular capabilities? Are there any sort of bolt-ons that would be more interesting than others?

Yes. I mean, I think geographical expansion is clearly one. So anything that we'll add to our international expansion would be of particular interest, whether that's in Europe or beyond. We've got a great regional and Irish private equity network. But I would consider -- as a business, we would consider looking at M&A acquisitions in the private equity space where we could take our template in the U.K. and roll out that template internationally as well, probably closer to home. So in Europe to start with and then maybe beyond after that in certain jurisdictions. So I think that would also be something that we'd certainly consider and look at and have been looking at in the past. So there's a number of areas that I think would be strategically accretive to the business in terms of M&A. And those are areas that we're constantly considering opportunities.

And then one on the dividend. So the dividend per share increased by 10% to 22.2%. Just wondering what factors influence that decision? And how sustainable is that growth in dividend payouts?

So I mean the dividend increased by 10%, but profits increased by 18%. And as long as profits are increasing. I think the general dividend payout ratio percentage is 60%. So we will increase the profit -- increase the dividend in line with the profitability. So the payout will remain 60% and providing we're continuing to drive profits upwards and onwards that the dividend will increase as a result of the increase in profitability. So I think, it's sustainable. We're looking in terms of how fundraising and deployment are flowing through to increases in profitability over the next 5 years. So I think that 60% payout ratio will continue to help pay out more as the business grows during that period. So I think it's a very sustainable on the basis of the forecast that we currently have and the momentum that we have behind the business.

We've now got a couple -- a bit more specific to the business. So one here about using leverage for future investments. So will you be using less leverage of future investments given structurally higher interest rates? And does that mean you're likely to achieve lower returns for investors?

It's a good question. I mean, for our existing investments, most of them have locked in their leverage over a number of years and when rates were much lower. I think the opportunity to use less leverage is potentially there. But we're also looking at deals where we can still generate attractive returns irrespective of the interest rate on the debt part -- piece, if you like. But a good example would be the solar deal in Greece that I referred to earlier. That deal will have leverage in it. But the leverage is particularly attractive because it's subsidized leverage through the European Union fund into Greece. So there are opportunities to still use leverage in an appropriate way and still get attractive interest rates. You just -- having that international coverage enables us to, a) hopefully, search out the best deals, but b) look at leverage that's particularly attractive in terms of the interest rate that we have to pay, while still delivering attractive returns for investors. I think as well, I would just say that over the years, we've started to work more with [Technical Difficulty] origination. And that helps in terms of delivering higher returns for investors despite the higher interest rate on leverage. And you intend to bring in leverage a little bit later into the project as well at that point in time, which again would help with cash flow generation. So there are a number of areas that we're looking at in that regard, which will help with that higher leverage piece. And I'm also optimistic that hopefully, not falsely optimistic that interest rates are shortly going to start falling down coming down, maybe even as early as August, depending on the Bank of England. We've already had one rate cut in Europe where we're doing a lot more of our investing as well. So I think structurally, it's right that they're higher now than they have been historically. But I don't think they're at levels that will make returns unattractive in the types of investments we're making for the reasons I've just given.

That's good to hear. So the final one for the moment, unless we get another couple through in the next few minutes is on Private Equity. So noting the 4 exits that we delivered in Q1 and the significant return on investment that those have generated, are there lessons that have been learned from those exits? And how would they influence future investment strategies in that space?

Yes. I mean it's -- yes, I've not had that question before. So that's a really good question. I think often, it's interesting because the buyers of these investments sort of help determine how we're looking at strategies going forward. So we sold one business recently in a specific sector to a very large multinational company -- international, multinational company. And that's then determined how we're looking at origination in terms of potential similar deals or bolt-on type deals, going forward. So there's no question that the buyers of some of these exits has determined how we look at origination for new deals into the future and pushing into specific areas that we may not have considered unless we'd had that specific success on the way out of the previous deal. So it does determine how we look at origination and how we -- what we're looking to do in terms of sectors that we'll invest in, in the future. So there's no question that these successful realizations make us look at origination in areas that we will specifically target going forward. And so those are the lessons that we've learned from that. And we're still pushing in terms of further exits. Hopefully, we'll continue that beat rate in the next few months. And as I say, that could push private equity -- performance fees and they carried interest from the Private Equity division into the first half of the year in terms of our results reporting. So I think -- the other thing I would say is that it's a combination of strategic buyers and private equity buyers. And because we're in the smaller end of the scale, so we're not even mid-market, we're below mid-market. Debt isn't really an issue in that regard because the buyers don't need large amounts of debt to make those acquisitions from Foresight. So in the mid and upper market, you're seeing fewer deals being done, fewer investments being bought or realized because people don't want to load themselves up with debt in particularly high rates, which was referred to in the previous question. Because our investments tend to be smaller, even if we're selling them at 5x to 10x, the buyers don't need to do a lot in terms of debt to make those acquisitions. So we're not seeing a particular slowdown in terms of realizations on our private equity side, which again, gives us real confidence in terms of both the current momentum that we have, but also maintaining that for the rest of the year. So hopefully, that's quite a long answer, but hopefully, quite a holistic answer in terms of both the answer to the question, but also what we're looking at more generally within private equity and the realization piece.

That's helpful, Gary. And we have had one further question, so I will just ask that one if you're okay to do so. And this is on the buyback. So noting that you've -- that we've increased the share buyback, which was announced yesterday, doesn't the very low valuation of the business argue for an even more aggressive approach in this space?

I mean, it could do, is the answer. So but we've only -- we're limited to how much we can do in terms of buybacks. So I think it's 20% to 25% of the average daily volume. So we have to be cognizant of the market abuse rules when we're setting future targets for buybacks. And therefore, because the relative liquidity in Foresight stock is low, setting it too high wouldn't be appropriate because we wouldn't be able to utilize a much higher number at the current time. So I think it's a good question. I think we will buyback as much as we can at the current rates because I think we're trading on a multiple that doesn't reflect where we're going as a business and where we've come from in the last 3 years as a listed business. So -- but it is something that getting the balance right of capital allocation between share buybacks and dividend policy, but also M&A when it comes along, is something that the Board takes a lot of time to determine. And so if and when the sort of parameters allow us a more aggressive approach to buybacks, it is something we'll consider, but again, within the [ MAR ] guidelines that we have to abide by.

Thank you, Gary. So that's it for the questions online now.

Perfect. Thank you very much for answering those questions from investors. Of course, we will publish the responses on the Investor Meet Company platform. But just before redirecting investors, provide with their feedback, which I know is particularly important to you all at the company. Gary, can I just ask you for a few closing comments?

Yes. First of all, I'd like to thank everyone for listening to me today to -- going through the presentation. Hopefully, I've given you a flavor about the success we've had over the last 3 years since IPO, but also a flavor of the -- the momentum the business has; and hopefully, the excitement that we have as a business in terms of the growth that we see ahead of us, both in terms of profitability but also in terms of our sustainability mandate as a business and how we can deliver that in terms of investment, both in Private Equity, but also in Infrastructure and in our Foresight Capital Management part of the business. So I think there's a lot going on at Foresight. The momentum, and I think the direction of travel is positive. So thank you for listening, and I hope to see you all at an event soon.

Perfect. Gary, Liz, Stephen, thank you very much for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Foresight Group Holdings Limited, we'd like to thank you for attending today's presentation, and good morning to you all.