Hilbert Group AB (publ) (HILB-B.ST) Earnings Call Transcript & Summary

I hope we are like now really apologize for the delay because of the load on the stream, we were breaking several times. We have reset the link. So let's jump right in because we're starting a little bit late now. The press due to today's presentation is that you will find the deck to be intentionally information heavy. And we have done that deliberately as we want to improve the level of transparency and the investors' understanding of our business. This debt will be uploaded as soon as we finish this session. And if you have any questions on the deck or anything that will not be covered in today's session please write to us. We will also be uploading a Q&A document, which will be available by tomorrow, and we will be releasing and answering the questions as we have received a volume of those in batches. And with that, I'm going to jump straight into the presentation. So as I said, the overarching intention for today's presentation is to provide as much visibility into the business that is Hilbert today. And how we make money, how to actually think about the drivers of that revenue generating engine? And why we believe that where we are today is indeed substantially stronger than at any time previously. So at the core of the Hilbert's revenue generation sits Asset Management. Asset Management is primarily made up of 2 arms, one is the Hilbert Capital, Hilbert's own offer fund and SME products including the AUM that we have and will be receiving through Syntetika distribution channel. Then we have the Xapo Byzantine, which is a platform mandate and a 100% Bitcoin lending table. On your screen, there are specific KPIs that have been spelled out. And what we intend to do is provide these KPIs that go into understanding the revenue generation of the asset management to you regularly going forward. One of the things that I will just quickly touch on is the most important is the fee paying Hilbert Capital, which is a part of the contracted AUM. Russell, a little bit later in the presentation will go over the reasons behind how the contracted AUM gets converted into actually deployed and see being AUM. But it suffice us to say at this stage that there is typically in certain cases, a lag from when the contracts are signed as Hilbert becoming the investment manager with the mandate versus when the trading capital actually hits the book and starts generating fee. We have also provided the effective blended management fee that we earn on the asset base that we have today as well as the performance fee and also provided you how the fee generation on the Xapo site works. So in short, the revenue is the Hilbert Capital or Hilbert's own hedge fund fee generating AUM management fee, the performance fee, Xapo mandate fee and other income that other income essentially is treasury gains, Hilbert Finance, which is at very early stages. Anything we do on proprietary capital trading and so forth. Moving forward, what I want to flag on this particular slide is that how does our fee model actually break down to? On your screen, you would see that our total fee income, which is essentially the management performance plus the Xapo fee has more than doubled in the first half of 2026 as compared to the previous year. The total cash revenue, if we include all of the proprietary and treasury, et cetera, income has, in total, still improved by more than -- or almost 50%. Why is this number relevant? The key point to take away is the change is positive. However, that is actually in an upward trajectory. And why is that? That's because when we were scaling back in 2025, beginning 2026, we were coming from an early investor base when investors are first in line or once underwriting. Initially, they get a much more substantial fee discount. Whereas the newer AUM that we are bringing in is being struck at closer to the 220 fee level, which is our standard fee charge. Secondly, when the funds and the strategies are at a lower AUM, the operating cost of running a fund can drag down the net return to the LP investor. And that then obviously demotivates new investors to come into the fund or to retain the investors that you might have in the fund. Thus, in the earlier stages, Hilbert took on a portion of the funds own operating cost, which was a board cost fund. Now that we have scaled the AUM, that cost burden is falling off. So vis-a-vis Q1 where 45% of the gross management fee was in the waiver it was only 9% that was waived in Q2, and that will continue to go to 0 as we increase our AUM. And finally, you should see an uptick in fee revenue simply because of where the Bitcoin is trading. And I will speak to this in the next slide. However, just in August, we have seen -- the Bitcoin has traded up about 10%, and we have already seen uptick in both management fees and performance fees. On this slide, what I want you to take away is that the big sensitivity to Bitcoin price itself plays a part in both the assets that we are reporting and the fee that we are generating. Because in the first half, Bitcoin fell about 25% a our reported point -- reported assets, which we report in dollars, but the assets themselves are denominated in Bitcoin about $8.8 million was simply the impact of Bitcoin prices being down, i.e., the conversion impact. And similarly, because on the Bitcoin assets, we are earning Bitcoin as fee, it took off about $140,000 from fee income. Just to give you a sense of split about 62% of the fee income in the first half was earned in Bitcoin. And if we -- and what you would see on your screen, there is a number 14% higher, what that is telling you is that if we held Bitcoin at $80,000 price, which was roughly where Q1 was -- sorry, beginning of the Q1 was then the fee generation would have been $830,000 versus the reported $730,000 in the H1 fee line item. That is an impact of like 14% over that half just by holding the Bitcoin price constant. Now bear in mind, obviously, Bitcoin has no impact on the dollar-denominated assets that we've done. Moving forward, Russell, -- I will hand this over to Russell to go over performance and give you a sense of how the business fee generation is impacted by return itself. Russell?

Thanks, Barnali. So good morning, everybody. Apologies again for the late start. I feel your irritation, my daughter is graduating from university this afternoon. So it is as much inconvenient to me as it is for all of you. So apologies for that. So in terms of performance, the performance that the asset management business generates is the most important metric that you, as our shareholders, can follow. We are, in essence, in a competition for capital. And that is not about absolute returns, it is also about relative returns. Now as you all know, I'm not going to go over 2025, but we outperformed on basis materially outperformed in 2025, but we run a market-neutral strategy alongside many other asset management businesses. The problem with a lot of those alternative businesses is they don't do what is on the tent. A market-neutral strategy should make money in up markets and in down markets. Now at the beginning of 2026, back in December, a lot of our quantitative indicators, most importantly, our extreme value theory eVar, we're showing material rises in terms of the amount of risk. Some of you may know how we do this, but we target the left-hand tail of the distribution. It's very complex, but it is highly predictive. And so we materially reduced risk for the start of 2026. Our eVar, we would expect running at about 1.5% eVar to 3 standard deviations should generate something like 15% to 18% in terms of annualized return. We have been running at about 40% of that. And that has turned out to be a very good decision. So basis plus USD 736 on an annualized basis so far and basis plus USD as the slide shows, is up USD 644. Myself and Barnali had drinks as one of the big multi-strats last night and here in London. They are flat on the year. And you can see from the benchmarks, the Vision -- the quantitative index is down 13.9%, and the market neutral is up 4.2%. So we are materially beating the benchmarks and the vast majority of our competitors. And we know that because we and a number of our SMAs are an allocated manager alongside other managers. So we are told by our investors how we are doing. So I have had a couple of, quite frankly, ridiculous questions from shareholders saying how do we expect to survive on 4% net returns? We don't, but it's not what we are targeting. We are hopefully going to hit double digits this year growth. I'm hoping to hit 10%, but we took a material decision to move risk down and it has put us in a very good spot. And very importantly, we have had 8 out of 8 up per month. in our USD share class in 2026 and 7 out of 8 with a pioneer drawdown in the BTC share class in 1 month. So we have proved that we can make money in a bear market. And last month, obviously, we had a 23%, 25% rally in Bitcoin. We had one of our best months of the year. I don't think the numbers are quite out yet, but HLF was over 1%. We turned some of the risk up in August, and we anticipate carrying that on. Our eVars have dropped and we're confident that we can keep these positive returns growing from where they are into the end of the year. So in terms of a metric to track, our performance relative to other managers is good. And of course, performance bleeds into more AUM pipeline growing and very importantly, performance fees in terms of the impact on our profitability. And you can see in the bottom right, I want to move from 10% to 20% were due in terms of AUM over a 12-month period. So we are targeting -- nothing has changed. We are targeting in the [indiscernible] and I'll this a bit later in the presentation, and Enigma is looking quite interesting and there are a number of other initiatives where we think that we can grow that into the low 20s without materially compromising our risk-adjusted returns. So quite frankly, I'm pretty happy with how performance is. I understand from a shareholder point of view, the returns are lower than they were last year but we've had quite a volatile market, and we've had a material move down in Bitcoin, and we have deliberately been looking to keep our returns positive. But more conservative, which is changing into the back end of this year and into next year. So that's sort of what I'd have to say on performance.

Thank you, Ross. Moving forward, just on seeping assets, and this is -- again, I -- Russ, if you could make a couple of comments on what we -- why we have seen a bit of lag between the fee-paying assets and contracted AUM and why both should be tracked going forward. And we will be providing that information going forward as well. That would be helpful, and then I'll take that over from you.

Well, there's a material difference between fee paying income and contracted income or contracted assets. We have 3 investors inside the contracted assets pool. They have signed SMAs and have committed investments with Hilbert. Now that then means that either they need to onboard, so they may sign an SMA early in the process and we need to onboard them. They quite often need help in terms of doing that. So our business development teams will help where that's concerned. All -- some exogenous factor may change. And I'll give you -- and so our -- and I understand, again, from a shareholder's point of view, you look at contracted assets, and you don't see them moving into fee-paying we did last month, some contracted assets moved into fee paying via Syntetika. We have 1 ultra-high net worth family office that's inside contracted with a signed SMA, they are going to invest. But subsequent to having signed the SMA, their tax advisers came back and said they needed to put some extra structure in place for the family office to make sure that they weren't generating incremental capital gains on an ongoing basis. And so they've had to go back and do some work in terms of restructuring their structure as to how they will invest, what entity the Bitcoin will come out of. And then once that is done, they will move the Bitcoin into the already open accounts, and that will move from contracted to fee earning. So the very fact that we have contracted AUM does not mean it's fee earning. Exogenous things can happen. There can be holdups. I understand it's frustrating. It's frustrating for us as well. We get an assigned SMA, and we expect it to land at the end of the month, and it ends up taking 3 months or 4 months. But if it's sitting in contracted, there is some form of obligation, most probably assigned SMA from the investor that they are going to invest in us. And you can -- we are going to be making all efforts to get that contracted AUM over the line and into fee earning as quickly as possible. So that's really the difference is that there are eyes that need to be dotted and teas that need to be crossed subsequent to the commitment being made and the business development guides and land and on the upside are all involved in making that process happen.

And I'd just add one additional context, so we have a pipeline, which is a broad growth pipeline. That can include an interest conversation like we are interested in the strategy very early on versus the sort of the real are more shaped pipeline, which is what we report to you, which is a pipeline where we have sent a DD. We have had at least a couple of calls and then each individual allocator will also have their own allocation process or investment process, which is -- goes through their investment committee. So later in this presentation, I will -- we will speak to you more about the pipeline, but I just wanted to give you a sense of how the process of conversion moves from very early stage, still part of like the very large pipeline that we do not report. Then we have expressed written and engaged pipeline, which is what growth pipeline that we report to you. Then we have contracted AUM, i.e., we have a legally enforceable contract in hand, then in certain cases because of infrastructure need or mandates or specific investor positions, there might be a delay from signing to the money hitting the trading account. With that, on this page, what you are seeing is that our actual fee generating core, the core that actually puts up the revenue, that went up more than 3x from the beginning of the year in a crypto bear market. You would see that if we take out with Bitcoin, i.e., we would have reported to you a constant Bitcoin price every single month barring, obviously, January, we would have reported a higher number in USD terms. And that goes to my previous point that there is some impact that is dampening your perception of what the strength of the growth has been in terms of converting pipeline. And not to mention, our pipeline has also grown the reported pipeline over the same time frame. Moving on what we want to touch a little bit on this slide on is where we are and why -- what is changing right now? As all of you are aware, there has been 9 months worth of build and build as well as integration work that has gone. We now are 90% of the way done. That's just an estimated number, but it's substantially behind us. Where we are is we actually have all of those investments that we had made, creating or making sure the quality of our diversification in the revenue stream is actually being built for future, we are ready to monetize that. I will start with Hilbert Finance and Russell, you can take over on Enigma and Syntetika. But on your screen is very simple models as to how those businesses make money. In the deck, you will also see in the appendix much further information for each of those lines. But in short, Hilbert Finance makes money. In an unlicensed and licensed environment, slightly differently. In an unlicensed environment, which is where we are today because we are in the process of getting the MiCA payment institution licenses. It does collateralized lending. That is not balance sheet collateral. What it does is it matches the borrowers and lenders and does manages a loan book where it takes the net interest spread between the borrower and the lender. Once we have the licensing, what we would be able to do, what no dark previously has done, so we have the build for it. We have all the tech, all of it ready. We have currently paused it because we are in the process of licensing. These operations such as trading and Banking as a Service that those operations were for Nordark were being done through third-party forms. Obviously, while we are in the licensing process, we have paused those and once we have the licenses, the trading fees and the platform fee or the Banking as a Service fee will also be accretive. Where we are today? We have created a decentralized lending vault, and we also have an often loan book that we are bringing online. In the, what we call deployment phase, it's not a full -- it's not a full launch yet. And at that stage, today, the loan book sits at $2 million. We expect to scale this over the very short or near term. Why -- what is Hilbert Finance doing in addition to obviously giving us an additional revenue stream? It keeps the collateral, which is the crypto asset and the client flows for the hedge fund side of the business in-house. That is the strategic rationale for that business. Russ, do you want to speak a little about Enigma and Syntetika?

Enigma. Again, I think this has been a source of frustration for shareholders. Obviously, as you all know, we acquired Enigma at the end of last year. Now it is my job as the CIO who oversees all risk that anything that we bring in is stable is it works. It's integrated into our UI, into our risk management, and we are confident in the repeatability of the alpha that it generates. And it has taken a bit longer than I would have liked to get Enigma. It had -- the colocation had to be rebuilt. Some of the code had to be rewritten, which took the first few months of 2026. And there was, to be fair, some small amount of regime change in the state business, which had to be accounted for in the code rewrite. So Enigma runs 2 products. It runs stat arm and it runs a funding arm. We run a funding arm in basis plus, but it is quite simplistic. The funding arb that Enigma is running is much, much more complicated across about 10 exchanges. But anyway, stataB, as I'm sure a lot of you know, is a very, very hot product in crypto. Winton have just redeemed all of their external shareholders in their stataB product, and they are only running in-house proprietary capital, about $700 million. It is a product that every investor that we are talking to existing and new ones want to get some exposure to. They are very interested in the Enigma stataB product. Now you get 1 shot at things in life. And I understand that it may look like we are being conservative here in terms of launching Enigma, but we want to get it right. It needs to hit the ground running. And we have taken our time, we have put proprietary capital, our own Hilbert balance sheet into Enigma. And we want to be confident that the returns are there. And I can tell you, I think we are there. We are very close to allocating out of basis point plus into stataB in Enigma and launching stataB as a stand-alone product and we have investor interest right now in that. Now the unknown on that is what the capacity is. And one thing that the Enigma guys have been doing is they have been focused on generating more stable revenue streams, less switching in and out which ultimately means that the capacity -- we trade across the top 50 coins in the stataB that the capacity is probably going to be materially higher than it was for the product that we acquired in 2025. So I'm very optimistic, very hopeful on Enigma. In the last 3 months, as you can see there on the slide, it is generating around about 50% annualized. So we are -- it is looking very, very promising it could ultimately be a product that ends up dwarfing basis plus. But you are going to see some movement. It is going to start generating fee income for us. I know there's a question that's out there. I'm not sure we're going to cover it on this call or on a written response in terms of how much in terms of assets Enigma needs to generate, but it is looking very optimistic, very promising, and I'm very happy with Enigma. And apologies for being conservative in terms of launching this, but it has to be right when it goes, and I'm comfortable now that it is. So we're very close to getting something going there and bringing some external investors into Enigma. And clearly, of course, Hilbert as a group, we want to have our own proprietary capital inside it as well because we generate 100% of the fee. So Enigma is getting quite interesting. Syntetika is live, as I'm sure you all know, -- it was 2 weekly redemptions. It is now -- we've now gone to 3 weekly redemptions. It launched with a bit north of $10 million. You'll see on the pipeline slide, that we are -- you are going to see some movement out of the committed and into fee-generating from Enigma for the end of -- sorry, for Syntetika for the end of this month. So it is a product that is generating very good returns. The feedback I'm getting from the Syntetika guys is they're very optimistic. There seems to be some really good conversations going on. And very importantly, I'll just make the point on Hilbert Finance and on Enigma and Syntetika, the stuff is built now. Our cost base has been materially higher in the first half of 2026, and it will be in the second half because Enigma is live and working and about to allocate to Syntetika is live. All the infrastructure is built, same with Hilbert Finance. So our costs on these, the infrastructure build there is collapsing there, and these are going to start turning from being cost basis into a profitability basis, like quite quickly, I think. So Enigma and Syntetika both looking good we are live with Syntetika. Assets have fed through without any sort of problem on chain into our trading platforms. And we generated returns for people that have got a Bitcoin Syntetika in August, and we'll carry on doing that in September.

Thank you, Russ. There -- this slide is about the current liquidity. There seems to have been some misunderstanding out there. We wanted to give you a breakdown on what liquidity is cash on hand. What is cash like and what is readily realizable as of 30th of June. We are those reported liquidity is $5.5 million. That consists of bank cash, i.e., Fiat we are a crypto firm. A lot of our liquidity is -- our settlement is done in stable point, which is also cash for us. We have that on our exchange account that is separate from the bank cash. We receive fee after the funds NAV is stock after a month. So therefore, some of the management fee, which obviously comes from the fund account that we manage onto the investment managers account take -- missed the quarter and/or the month and put off because one has to wait for the NAV strike. And then finally, the inbound wires that missed the cutoff wires from the capital raise. So the number should not be just the bank cash. What you should look at and we will, going forward, make these much more visible and easily accessible to you. But all these 4 components should form the total liquidity that the firm has access to. This slide is with regards to how much it costs to run the business in cash terms. On your screen, we have split out for the actual first half, the cash and noncash operating costs. As you will see, and we have already touched upon Russell and I earlier, we had a number of nonrecurring build-related costs still in the first half which we will start to see come down, truly come down in Q4, the first full quarter on the new cost base. But you will start to see that tick down even from Q3. The cost back base mix is provided to you on the screen as well. And one thing that I wanted to address is that even at the new cost base mix that we have provided on screen, for -- a number of those things are not critical to the firm's operation. There is a lot of synergy that can be done. We run trading as an example, trading in Enigma, we don't trading on Hilbert Capital. We use still in many cases, 2 different -- when I say infrastructure, I mean service providers. Just as an example, combining and bringing those onto the same platform releases or gives us cost efficiency. Those things take a bit of time to realize over time. We are not cutting cost or cutting businesses or revenue lines for which we have actually invested. Russ, do you want to take over from me on the pipeline.

Yes, I will. I think again, there has been quite a bit of confusion, and this is solely down to us, I think. But pipeline is more an art than a science. But there has been some confusion over what pipeline is and how realizable and in terms of what time frames pipeline converts through the different stages. So I just want to be absolutely crystal as to what pipeline is. So when we have an investor who expresses an interest and by the way, pipeline is not run by me. It's run by business development, Investor Relations. These guys have the relationships and a number of the probability calls that go into the pipeline, they all come out of investor relations and business development. But when we get an investor that expresses an interest, it goes into the Hilbert investor database. If the business development guys determine that the inquiry is real, they will have a conversation with an investor. And if they determine that, that conversation is real and that someone is actually looking to potentially allocate not necessarily to us, but into the space in which we're operating, it will then join the pipeline. There will be a call on that in terms of what is the likely size of the investment and in general, I know of at least 2 bigger investments that are in our pipeline. They've been marked at half of where the actual investment would be. So there is a little bit of a discretionary call from business development guys in terms of the size of the allocation. But that then goes into what we call our pipeline. A number that we don't report and maybe that we should report and I will discuss this with Barnali at some point is the probability weighted pipeline. So what then happens is the business development guys go and say, well, this person is well down, and that probability can change as an investor moves down the process in terms of onboarding with us, that generally, most of the time, will involve a call with the investment management team, which is me, Jesse, et cetera, et cetera. It will probably involve a call with ELAD and on ops and what have you. But as that process progresses, the probability weighting against a particular investor goes up, goes down or they get removed from the pipeline. So the pipeline that we report at USD 292 million is the amount of investors that are legitimately looking to potentially allocate with us without any probability waiting attached to it. Now there is a probability weighted number. I'm not going to give it right now. I'm not sure if it's a project if I do, but I think probably we should give that number going forward. So then what happens is if we get down that process and investor and say, "Right, we commit," that then moves out of pipeline and into the committed bucket that you see. And then we would expect within a short period of time, which I've dealt with earlier, that [indiscernible] committed would generate and turn into fee-generating income. But it's out of our hands. It's exogenous. The different things can happen, and that might scale up, it might scale down quite often. We've got -- we had an investor that went live for a relatively small amount in the Cayman fund this week and the beginning of the month. And they went in with a few hundred thousand. They are potentially a $10 million to $20 million allocation, but they want to run a small amount of capital for a month or 2 just to see that the pipeline work that we return the sort of numbers that we say we're going to return. And that's very normal. So we have a movement then from pipeline into committed and committed into fee generating. Now you can also get some one that completely skip the pipeline. You're going to see, I believe, something on that for the first of October because if we have an existing investor that adds, which we believe are our biggest investor is going to add that won't be in the pipeline. And our actual investors and any AUM that we have from investors are not in any way included in the pipeline. So -- and then in terms of like conversion, the conversion of the pipeline clearly is -- there are a number of factors here, which, as I said at the very beginning, make it more of an art than a science. There's a seasonality concept like people generally, and you'll see on our estimates for Q4 that is highly influenced by our experience with seasonality that generally people do not allocate at the very back end of the year, they will allocate at the beginning of the year. So there's a seasonality aspect there's obviously market dynamic aspect. And this pipeline, unfortunately, in a bear market, while we've generated positive returns, there has been this rotation of capital that has gone out of crypto and into AI and into gold and into a variety of other things and that has meant that the pipeline to an extent, has stagnated a bit that we haven't moved to as many investors out of pipeline and into committed as we would like. Now what I can say is from obviously, conversations with both Anna and with Ashley, who run business development we're seeing a reversal of that at the moment. We're seeing -- and my family office myself, I'm doing it as well. I've sold my AI exposure, something like gold exposure. And I want to go back into crypto. I think crypto is undervalued now relative to that. And a lot of people seem to agree with me, and that capital rotation is coming back into crypto. And we are seeing that in terms of both new conversations that are starting and a little bit more energy that is coming from relatively stale investors that might be in the pipeline. So that graph there that you're seeing is showing a very, very conservative estimate outside of committed capital moving into fee-generating and up from existing investors. They're not included in those numbers. And so that -- those numbers there are conversion pipeline into fee generating what we estimate. And you can see, obviously, from Q4 that it's very conservative, which is an element of the seasonality. Now that could obviously be very different from what actually happened and we could get some nice allocations in there. One thing I'd also like to address is I keep hearing, and I've had a number of messages and DMs that I have been saying in podcast and what have you that we should be at $1 billion by now. I would love someone to point me that quote that I've made because I have not made that quote. We can control the things that we can control. We can control the amount of risk we take. We can control our responses and dealing with investors. But at the end of the day, the pipeline is going to convert because an investor wants to actually generate returns on the Bitcoin that they're holding or the U.S. stablecoins that they're holding. And many exogenous factors affect the estimates of the conversion of that pipeline. And I understand to shareholders that it can be frustrating. And it's been frustrating wells, we have dealt really with 8 months of a bear market, which has definitely held that process up. Now I'm hoping -- I don't know how many of you subscribe to the weekly traders call, but we believe and our indicators show telling us that the bottom is probably in a Bitcoin and this capital rotation is beginning. And hopefully, we see a move back up in Bitcoin. And one of the second derivative effects of that will be hopefully much higher turnover in our pipeline as it moves out of pipeline into committed and into fee paying.

That's all.

Yes, I don't really have a great -- this is basically saying a breakdown, the business development guys actually break down the type of investment. And that's on the left. So we have a number of -- a number of you are aware, we've got a couple of very big strategic investors, one of which is a really significant amount of AUM. We could easily be putting that into committed. They have told us they're going to allocate to us. But at the moment, it is a custodian issue that some of you may be aware, there's a bit of a of a territory fight going on amongst a number of the custodians and one custodian does not want a particular high-profile investor to actually go through a secondary custodian to get to ours, et cetera, et cetera. So some of that stuff is being resolved, and it is being resolved. And so -- and they would sit in the institutional prime and custody bucket that's there on the side. So you can see a breakdown of how we are basically on our database in the pipeline of how we're allocating the types of investors -- and then on the right-hand side, you can see how many of those are in what type of stage. And business development do also produce a quarterly estimate probability weighted again, I'll probably have a conversation with Barnali as to what type of visibility we do on that. It is a double-edged coin this. And I really do understand shareholder investor frustration here. Because as I say, again, it is an art and a science, and we can give you too little or we can give you too much and then the expectations become too large. We have got a number of late stage with, as I say, from there, 29% of late-stage investors. They are high-quality institutional investors, and we would expect to start seeing movement in the pipeline. But that decision is not ours. It comes from the investor and a number of exogenous factors will influence it.

Thank you, Russ. Moving forward. Apologies for too many numbers on the slide, but this will be, as I said, with you guys. So you will be able to review this and come back if there are any questions on this. But what this slide shows you is how the first half was actually in terms of fee generation and cash OpEx, the first 2 columns. And then the section on the right is what we call budget or our assumptions currently based on pipeline landing, a full year gross return going forward. And how would that then look in terms of revenue generation and in terms of the new cash base -- sorry, the cost base that I have mentioned in the previous slides. And the takeaway here is how we assume the pipeline landing and what the returns are and the mix between various parts of the revenue. The breakeven number that I consistently get asked on fall somewhere in the total AUM of about $165 million to $200 million. What you would see that given the assumptions that we have given you in the previous slides, by Q1, we are essentially much of the way there in terms of carrying the new cash base. What additional -- in terms of sensitivity, what additional sort of $50 million assets assuming current level of fee and not higher. It adds anywhere between $350 million to $450 million of revenue per quarter. So I hope this will provide a little bit more visibility.

Not million, Barnali, 1000 which million.

Yes, 0.35 -- thank you so much 0.35 or $350,000 to $450,000. So to sum it up, what we want to consistently provide our sort of these KPIs in addition to the KPIs that ICE began with, are fee paying AUM, which is what generates revenue currently without taking into account any Hilbert Finance Syntetika or -- Syntetika platform or Enigma-related income -- we have grown that core substantially. Our fee income has been reflected in terms of growth. Accordingly, we anticipate our cash burn to be coming down, and we have provided an estimate that we currently have. And we believe we have enough liquidity to be executing this plan. And what we obviously need and that is the -- what underpins the investment is converting our pipeline into fee-paying assets. I am deliberately being conservative in the fact that we are excluding anything to do with any of the platforms that we have spoken to you about. At the end of this deck that you will have a number of appendix that will go over further details on each of the platform. A question that seemed to have confused certain investors regarding the top line gross revenue presentation differential, which is largely due to an accounting treatment and has absolutely 0 impact on the margin or the cash of the business. That has been elaborated to you explicitly on that slide. And there are a bunch of other information regarding how we see Hilbert Finance -- sorry, I'm going too fast. How we see the market that's being addressed by Hilbert Finance and how the income generation would potentially look like and some more information regarding Enigma as well. In the interest of time, I will leave those for -- to be reviewed by the by the investor base. And please write any questions regarding that. I'm going to stop sharing my screen. And very quickly, I know we are almost an hour, but we want to still go through some of the questions, and we've received a large set of questions, so please bear with us as we provide you written responses if we haven't covered it today. So maybe I start with you, Russell, and then I will have some questions for Jonathan. And in the end, I will take some questions myself as well.

One of the questions that we have received is why does an institutional allocator choose Hilbert over a larger crypto manager? Russell, what would you answer?