Oakley Capital Investments Limited (OCI) Earnings Call Transcript & Summary

Good morning. My name is Steven Tredget. I'm a partner with Oakley Capital. And it is my pleasure to welcome you to the Oakley Capital Investments 2023 Interim Results Webcast. In the next 30 minutes, we will cover, one, the performance of OCI over the last 6 months of the year and analyze the composition of the portfolio. Secondly, we'll speak to the health of private equity as an asset class, particularly funds being raised and deals being done and how this impacts Oakley. And thirdly, we'll look ahead, considering the approach of the Oakley Fund strategies with current investment pipeline and the outlook of the portfolio. At the end of the presentation, we will conclude with a Q&A session. And questions can be submitted in writing by the Questions Tab on the webcast page. Turning our attention to OCI's performance in the 6 months to June 2023. And as we will recount, a focused portfolio of European tech-enabled private businesses has delivered another period of resilient performance. The headlines are, an NAV per share of 663p and NAV of close to GBP 1.2 billion. This is based on the portfolio being revalued at the end of June, and when including the dividend paid amounts to a total NAV return of 0.5%. The shareholder return was just over 5%, double that of the FTSE all share. And thanks to realizations in the period, cash has been significantly strengthened that now stand at GBP 248 million. As the NAV per share bar chart shows, the 12-month performance is consistent with OCI's long-term returns. The 5-year compounding average annual return notwithstanding at 22%. Arguably, more importantly, OCI has one of the highest 5-year total shareholder returns of any investment company. The 6-month NAV return by our standards is relatively modest. But it's worth considering that cash, debt investments and investments value based upon a transaction made within the last 12 months amounts to 63% of NAV, essentially resulting in 2/3 of the NAV, which was to remain static in the half. To explain this 12-month point, typically an investment made in the last 12 months will be held at that entry valuation given its proximity to that pricing event, regardless of its ongoing growth. This relates to new investments or reinvestments like Contabo, vLex, Phenna, et cetera. And there are also those like Cegid that had a pricing event within the last 12 months. And that valuation has naturally been retained in the recent period. Whilst the value of the remaining portfolio increased by 17p per share, the approach to multiples and trading outlook has been cautious, given the uncertain macroeconomic environment that persists. Dividing the NAV per sector -- dividing NAV by sector, there are 3 things to note. Firstly, the portfolio is reasonably balanced across our 4 focused sectors. Secondly, we now have 4 focus sectors, up from 3 with the addition of Business Services, not so much a new sector, but a more accurate segmentation of some of the investments that were previously categorized within technology. Those being data platforms like vLex and TechInsights. And testing, inspection, compliance and certification business, Phenna, which has made incredible M&A progress in its first year investment. As you might imagine, it's a sector we have high hopes for. Thirdly, if we take you back to the sector split in December 2022, like so, and then advance again so we can see the change in the period, this should be as a decrease in the exposure to the education sector and an increase in the technology sector weighting. The combination of this move helps explain the average portfolio company multiple increase in the period from 15.9x to 16.9x with a mix shift towards the higher rated technology sector investments. As is customary, we now break the GBP 1.2 billion of asset value into OCI's look through exposure to each of the underlying portfolio companies, which now stand at 27. Here's an opportunity to see the investments, that had the biggest impact on future NAV growth. And as we run our winners, we see many of the largest holdings being our long-term flagship fund investments companies like Cegid, WebPros, idealista and IU Group. As you're very familiar, OCI retains 2 direct company holdings as a result of that legacy strategy. And the aim at the appropriate time is to realize these positions. One is in the debt and equity of Time Out Group and the other in the debt of North Sails. It is pleasing to report improving and profitable growth in both companies. This year, North Sails is the fastest-growing company in the portfolio as sales and mass both enjoy strong volumes and have successfully passed on higher material costs. The apparel division is also delivering strong underlying trading driven by e-commerce and outlets. The combination sees the group ahead of budget at this point in the year. Time Out reports its full year results in the coming weeks and will be reporting profitable growth in both its media and markets divisions, with a further 9 of their hugely popular food markets now signed and currently in development. The average organic weighted EBITDA growth of the 27 companies at the period end was 21%. This was achieved against economic headwinds and high inflation and reflects the founder-led digitally disruptive nature of the portfolio and the recurring or subscription nature to their revenues. To touch on some of the highlights by sector. Within technology, the key long-term trend of the shift to cloud and hosting solutions continues to lift the portfolio with companies like Contabo leading web hosting service provider, growing EBITDA of 30%, with its 27 data centers across 4 continents, serving over 300,000 customers. The consumer sector will be forgiven for having a weaker period of performance. And while some of the companies like WindStar and Vice have experienced some short-term headwinds, 3 of the 5 -- 3 of the top 5 fastest-growing portfolio companies are consumer businesses. Companies like idealista, Southern Europe's leading property portal, which continues to benefit from the rising demand of its solution, a solution which is still very much under adopted in the region compared to groups like Rightmove operating in the mature U.K. market. The megatrend of the growing global demand for high-quality accessible education drives all areas of the industry, none more so than the demand for premium private schools, which Affinitas is proving to be a beneficiary of. The rollout vehicle only launched last year and is already a group of 12 schools in Europe and America, with 10,000 students generating close to EUR 20 million of EBITDA. In this fragmented market, there are a few school groups of this scale. And finally, the newly segmented Business Services. We touched earlier on some of its constituents and their mission-critical role within in a data-driven economy. Legal data company, vLex and its cloud-based online subscription platform was one such example, which, following its acquisition of Fastcase has created the world's largest law firm subscriber base and a library with more than 1 billion legal documents from more than 100 countries. Finally, in this section of the presentation, the last of the portfolio company KPIs is that of leverage. The multiple has fallen to 4x net debt EBITDA, demonstrating that in the current environment we are allowing the portfolio of companies to deliver. We'll expect the level to drop further by 80% to 90% of the portfolio going forward with the exceptions being those that are increasingly driven by M&A. These levels of leverage are lower compared to a global PE average of 7x. And to underline the point, the [ OC ] does not rely upon investing company leverage to drive returns, we have broken down our realized returns to date by the 4 main contributing factors. As you can see in the pie chart, the use of debt only contributed to 1% of realized returns so far to that historically. M&A, a key value creation driver, stands at 10%, EBITDA multiple expansion 23%. But most importantly, organic growth, our principal focus for making investment has delivered 66% of realized returns to date. As an aside, Oakley Funds realized investments have generated 5.2x money multiple and a 72% IRR, which underlines the OCI Board's desire to maximize the balance sheet exposure to the funds and avoid cash direct where possible, a topic we'll return to. There are dangers in summarizing the health of an entire asset class, but we can certainly touch on some of the themes that are most focused upon. After a 17% fall in 2022, global PE fundraising has continue to drop and is expected to retrench to its lowest level since 2016 with 2023 at a run rate 35% below that of last year. It will, however, be a year in which the second highest number of funds will raise capital. Our observations are that a high proportion of investors plan to actually up or maintain allocations over the next 12 months. Despite this improved sentiment, the fundraising market will continue to be tough. And as a result, recent years of oversupply and the abundance of funds attempting to now raise. For a more cautious investor base, the repeatable strategy and consistent past performance will be critical. So we expect more divergence between managers who can successfully sustain their fundraising momentum and those who cannot. We have note 3 things. PE funding is not in any form of structural decline, it's still a relatively nascent asset class with significant scope for growth. As we've highlighted in the past, there is only circa $10 trillion of global PE managed assets versus the approximate $110 trillion in public markets. The large global PE funds are typically the acquirers of Oakley portfolio companies and the firepower within these funds remains undiminished, with them representing the lion's share of over $1.1 trillion of PE dry powder. In spite of the backdrop, the Oakley Funds, by the end of September, will have closed near to GBP 4 billion of funding in the prior 12 months, reflecting the demand for performing managers and leaving us well positioned to take advantage of an opportunity-rich environment. But our deals being done, the global aggregates private equity exit values are down significantly this year and could finish as low as half the value of 2022. The trend, however, is an improving one, with quarter-on-quarter growth of market consensus regarding the peak of the rate of -- the rate type cycle, helping to provide some certainty on deal financing. Anecdotally, we have seen a market bifurcate between large, scarce premium assets. And as the chart shows, with the number of deals closed being up year-on-year, the most active area of deals has been in the mid-market and below, where debt is less of a driver and founders are looking to equity not debt and partners for support. These 2 trends, as you might imagine, have significantly benefited Oakley. On to the side of our IU Group on the subject of premium high-quality scarce assets realized the near 14x return and generated proceeds of GBP 240 million for OCI. The funds made 2 new platform investments in the half, including Fund Vs follow-on investment in IU Group alongside EUR 1.1 billion of third-party investments. We retain high conviction of the long-term potential for our IU, which remains the largest and fastest-growing university in Germany and a global leader in online -- in education technology. And we believe there is an opportunity to leverage AI, M&A, internationalization in order to continue to drive its impressive growth. And secondly, Thomas's one of the top-rated coeducational independent school groups in the country, where we see the opportunity to partner with the founders to further develop current facilities across the schools and invest in new opportunities to expand Thomas's offerings and sites. In addition, and post period end, Fund V signed the carve-out of dental laboratory operations within the European Dental Group, which led by its founder, [ Peter Howe ], will form one of the leading oral care that services provider groups in Europe and [ love ] to start the new roll-up strategy in a largely unconsolidated market. It's been a busy period for bolt-ons by an existing portfolio of companies with over 15 completed in the first half. The largest was vLex's acquisition of Fastcase and Affinitas' acquisition of Spanish premium School, XIC. The other particularly active companies include Phenna, ECOMMERCE ONE and Bright Stars. Historically, distributions from the funds as a result of realizations, the purple bars on the chart on Slide 25, have broadly matched the capital calls required to fund investments, the black bars. The higher level of proceeds in the first half of the year have provided a timely boost to the OCI balance sheet. Cash has grown nearly 126% in the first half of the year to GBP 248 million as of the end of June. And post period end, OCI renewed and expanded its revolving credit facility, raising total committed lending to GBP 175 million, a significant vote of confidence in OCI from its lenders in what is a tight debt market. This brings total available liquid resources to GBP 423 million. And it compares to OCI's outstanding Oakley Fund commitments of GBP 893 million. We show this number in the gray bar to the right-hand side, broken down by the commitments in each Oakley Fund with a significant majority of the commitment being in the mid-cap buyout our Flagship V, which was launched in 2022. The middle bar in purple breaks this down into the expected timing of the drawdowns, i.e., when will the Oakley Funds need the cash committed to them. There is GBP 308 million expected to be called in the next 12 months, GBP 360 million set to be called after 12 months and over a 5-year period. And finally, over GBP 200 million that is now -- that is not expected to be called. So current liquid resources can be reasonably expected to provide 2 years of drawdown cover if the funds were not to generate further proceeds during this time. And the funds continue to invest at their current high level. As we consider future fund activity level, it's useful to consider the current holding periods of the underlying portfolio of companies. Oakley's job is not to time the market, but to deploy capital evenly over the cycle, and this chart demonstrates that. The average holding period realized Oakley investments to date is about 3.7 years. And the average holding period of the current portfolio is 3.2 years. This is, however, skewed by the longer hold periods of North Sails and Time Out. If we remove them from the calculation, the weighted average hold period is closer to 2.5 years. This reflects the recent years of investment activity and takes us back to early in the presentation when we touched on the amount of NAV, which was priced by transaction in the last 12 months. Despite this average age of investment, we still anticipate a number of possible realizations within the next year. And in the third, final section, we look ahead to the prospects of OCI and the Oakley Funds. As you'll be aware, the underlying OCI portfolio of companies sit within a number of Oakley Funds strategies. This started with the mid-market Flagship buyout funds, now Fund V, then came below the market Origin fund with Origin II expected to be announced shortly, and in the venture capital strategy, PROfounders III. Rather than moving up the size scale to raise much larger funds to invest in much larger companies, Oakley has looked to invest across the company life cycle, partnering as it always has done with ambitious and proven founders. To this end, the identified gap in the Oakley Fund strategies was a growth technology solution, a strategy that would invest in the Series B and C rounds of fast growing software companies. Oakley Touring Venture Fund was launched in June to do just that. Oakley has partnered with a team that has built 3 global venture investing franchises, including Qualcomm and M12, Microsoft's venture fund. Now for this time, they were the early backers of companies like Zoom, Kahoot! and Waze. The fund's focus and the team's particular expertise is in identifying investment opportunities in proven next-generation software businesses for the modern worker, powered most importantly by generative AI. Encouragingly, over the 25 founders that have been previously backed by Oakley and the Touring partners have already committed to the fund. Oakley has positioned itself well around prior generational shifts like smart phone and cloud computing. And we believe that generative AI represents the next paradigm shift. Oakley Touring will, we hope, not only enable us to capitalize on this opportunity, but the team is also helping us, helping our current portfolio of companies navigate the adoption of this technology. In the last couple of slides, we look at the health of the deal origination, which remains one of Oakley's key differentiators. The funnel here represents the relatively near-term pipeline of opportunities, which is in very good health. This has been driven by a number of factors. There's, those that are Oakley specific that you all know well. They are our unique founder-led network that not only we continue to be able to back on numerous occasions, some of which would back 3 or 4 times. But they endorse such -- the other entrepreneurs throughout Europe who present other opportunities to us. We are consistently and increasingly considered to be the partner of choice for founders. Founders that want to continue to work within and own the businesses they've operated in. But they want help kind of professionalizing, growing those businesses, internationalizing those businesses with M&A, areas that we have considerable track record in demonstrating. There is also the deep sector mapping and scoping that we do within these focus sectors that drive and reveal opportunities for us. There's, also levels of disruption in the current market that are providing us with opportunities. Disruption that may be lower middle mid-market companies want to take advantage of. They see the opportunity to get a backer at this point in time in order to take advantage of that disruption. All there are companies that are currently overcapitalized in a high cost debt environment and they need to restructure their balance sheet, all of which is driving a large pool of opportunities towards Oakley. As the funnel shows, there are in the more immediately considered pipeline, 18 companies, which are in due-diligence. They are spread across the 4 sectors with education and Business Services accounting for 2/3 of those in due-diligence. Most notably, 3 companies have received recent offer letters are companies based within Southern Europe. And the region has been an increasingly attractive area for us. Why is Southern Europe, such a -- is been such a region that is delivering a significant number of attractive opportunities. There's 3, kind of, key reasons for that. One is the lower current adoption of digital solutions within this marketplace. We have the ability to repeat what we've achieved in now mature geographies like the U.K. and Germany in countries like Spain and Italy. I mean Spain's cloud adoption is significantly below that the EU adoption with 31% of SMEs using cloud computing in Spain versus 41% of the EU on average. And then there's Italy in e-commerce, only 40% of Italians, the entirety of the Italian population have executed any kind of e-commerce. We often talk about it in terms of price comparison website Facile. And the fact that even after COVID, online car insurance only accounts for less than 20% of the market. I mean here in the U.K., it's closer to 80%, 90% of the market. And so consequently, there are plenty of market leaders that we can invest in that are growing in these regions, not thanks to their underlying markets, but thanks to the digital disruption and the adoption of digital solutions. Secondly, there's low PE penetration. Compared to the U.K. market, for example, Spain is less than 1/4 of the PE investment by GDP. And then, finally, it's a large addressable market. Spain is increasingly at the center of the Spanish-speaking world, which is estimated to be a populous of some 600 million people. In closing, the outlook is bright for a resilient, well-positioned portfolio of companies. Whilst Oakley, in the meantime, an innovative investment manager is uncovering the next generation of opportunities in pioneering areas, such as generative AI. As a result, we are confident in the continued delivery of our performance of OCI and for OCI shareholders in the rest of 2023 and beyond. Thank you very much for listening to the presentation stage of the webcast. And I'll now hand over to Rosanna who will lead us through the Q&A.

Thank you, Steven, and thank you to those who've submitted questions so far. As a reminder, for anyone who'd like to raise a question, please use the Question Tab at the top of the webcast page. And we'll do our best to get through as many questions as possible in the remaining time. With that said, let's kick off with a question on portfolio performance. So Steven, which have been the best performing companies from an EBITDA growth perspective? And are there any common themes between them?

We've kind of teased out some of the names across the presentation. If I take the top 5 performance by EBITDA growth, they are North Sails, IU Group, Dexters, Contabo and idealista. So in terms of common theme, I mean, they are across 3 of the 4 sectors. So there's no real common thread other than demonstrating the typical kind of characteristics that you would imagine of Oakley companies in that -- characteristics that you'd be particularly familiar with it. They're a digital disruptors. They don't rely necessarily on market growth. They were founder owned. And we've backed kind of those business leaders on the same terms as us. They've got the same long-term alignments. They've got a level of kind of recurring revenue all of them. And I guess most importantly, they've all got those, kind of, big megatrends behind them. What's noticeable, and probably, as I said earlier in the presentation and probably unexpected, is the consumer weighting of those kind of 5 companies, which you wouldn't instinctively have expected given the macroenvironment. But that does, again, speak to that disruptive nature of these businesses. We talked about idealista and Dexters, they're both taking market share for their own respective regions. I mean, we talked about under penetration. Roughly speaking, idealista kind of represents 60% of the Asian market versus mature Rightmove probably representing 90% of the Asian market.

Fantastic. Thank you, Steven. We've had a couple of questions on the theme of cash. With the current cash level, do you expect to be continuing with share buybacks in the second half of the year?

The Board are predisposed to make buybacks. That is a philosophy that's very close to their hearts. And they've stated that there is an existing and ongoing buyback program. And they have GBP 11 million of outstanding authority. The key considerations -- so I guess, when they're not making a buyback at any particular quarter, why, I guess the key consideration is that there is not the cash level per se, but the excess cash level. So the Board has made commitments to the funds in advance based upon expected cash flow in order to ensure the efficient use of cash and maximize shareholder returns. The expected annual drawdowns by the funds and the forecast proceeds are considered to determine the cash that is required to cover the activity levels in the near to medium term. And so if we have cash in excess of that, it's available for buybacks. So yes, you can expect buybacks kind of continued over time. The exact timing of that really depends upon the excess cash. And so if you don't see a buyback at any point in time, there's a good reason for that. It's not a change in philosophy.

Thank you, Steven. Another question on the discount. Why does the discount remain so wide? And how do you intend to close it?

Yes. Look, it's a question we're always going to be asked and it's a question that -- it's an answer that you could debate extensively and have its own webcast. I mean, if I was told to identify the current 3 key reasons for its existence, I mean, it's -- one is indiscriminate. I mean, this is not just across -- it's not just OCI, it's not just across listed PE. It's across invested companies. I mean the last -- last look to the [ OIC stat ] 14 of the 16 sectors within the investment company kind of universe, trade at discount to NAV. And one of the kind of main reasons for that is in the main, these are small mid-cap companies and are relatively illiquid. So when you go into a period of a flight to quality, yes, as investors move to larger companies, all with funds, kind of, outflows than the area that significantly gets hit, not as investment companies, but they're small to mid-cap companies. Secondly, there is a slide -- there a view that focused on the discounts, perpetuate discounts. Funds, investors trade around the discount levels. So as they close, investors sell and they buy when it widens. So to some extent, there is a challenge in kind of breaking out discounts -- the discount factor. It is possible, though, and listed PE firms have broken out at a time, and I'll talk to some of the reasons that I think that can be achieved. The structural problem that I think essentially is demonstrated by the discounts, particularly as you see the kind of consistent performance right across the sectors, and yet you see such in really -- which is our peer group, that's pretty high quality and yet the discounts kind of persist. And that structural problem is the ability to kind of accurately assess the underlying assets. One has to take a view on the underlying investments without -- with relatively limited amount of information. I mean, we go to an increasing extent to kind of give you background information, which is a reported account, which really gives some underlying information about each of the companies, what's driving them, and the kind of level of performance within the period and what we can maybe expect coming forward, and we've consistently been delivering that. However, I mean, we're -- we have more transparency than most, but it's still not, kind of -- and it and it will never be perfect transparency, because we want to retain the information advantage of these companies being private for lots of reasons, but not least because you don't want to sell everything to your competitors. So as investing, you kind of take a view and maybe naturally apply a discount accordingly. Added to this is that the PE space and the listed PE space in particular, isn't widely known or understood. It's a relatively small listed sector after all. But I think it'll kind of most important from my perspective, whilst this all sounds like 3 factors that are never going to change, they all are changing. Fund -- there's fund flows back into the U.K. public market, there are kind of improving valuations around kind of small mid-cap. And I think most encouraging for me, there's kind of improving media coverage in the sector and also, of rising retail ownership. Institutional funds can remain be quite restricted from their ability to invest in companies. And kind of retail, I think it kind of taking ownership into their into their own hands. If you if you take OCI's, register back to 2020, 3% of the register was owned by private investors via the kind of typical kind of platforms -- share buying platforms, like, Hargreaves Lansdown, interactive investors, and the like. If you combine those now, they now represent well over 15%. With a couple of them being in our top 10 shareholders. So there is this kind of move towards the asset class and also this this kind of move towards OCI. The -- I mean, the other thing I would say is, despite this mispricing, discounts shouldn't be the primary focus for any investor source of returns. I mean, at the asset growth is key to that. So what can we do about it? And I guess, some of it kind of relates to what we've kind of discussed here. I mean, there's education. There's increasing the understanding of private equity, what drives it, the kind of assets that we can get access to, which frankly are not now going to the public markets. There's the transparency. We're going to keep kind of driving the amount of information, the frequency of information we provide and enable that increasing confidence in the NAV and it's kind of future growth. I mean, it's ridiculous that the share price is at least traded NAV now given the kind of consistent growth of that NAV. And then there's returning cash kind of through buybacks and dividends, which we have consistently done so in the past. Most importantly, the things we can do is perform. And the perform does 2 things. It's obviously in creating returns and driving shareholder returns, attracts more investors to the company, and alongside that, kind of creates scale. So you create confidence of future NAV growth. You drive further buyers, and with scale brings liquidity. In terms of anything kind of particular to us, look, I think the sale of the direct assets would be kind of helpful in that kind of last stage of the different elements we wanted to address when we outlaid our plan for OCI some 5, 6 years ago. Now those direct investments can prove to be a distraction, and it would also provide kind of further liquidity for buybacks.

Thank you, Steven. We've had a question come in about leverage within the portfolio. So your 4x EBITDA -- debt to EBITDA ratio is well below the PE market average of 6x to 7x. Can you say how much of EBITDA is now going to be used for interest payments, compared to say the 5 year average? And how do you see it developing over the next couple of years as hedges mature?

Well, I don't I don't have a specific number for kind of EBITDA coverage of -- well, I have the coverage of debt rather than the cost of -- the coverage of cost of interest. But as the as the kind of slide demonstrated, we expect the level of interest payments to kind of decrease over time as we continue to as we continue to reduce those leverage levels. As we said, the vast majority of the portfolio we expect can continue to deliver. In terms of kind of EBITDA and it's used to pay interest, I mean, one, we've been able to kind of hedge the large majority of the portfolio. So we haven't been so impacted by the by the rising rates in the kind of more recent period. The other thing is, I mean, the nature of the kind of a tech portfolio as ours is that there isn't much capital cost associated with growth below the EBITDA line. So much of that EBITDA converts to cash. So we have a particularly cash rich set of portfolio of companies which means that they are very comfortably many times meeting their interest payments.

Thank you. We've got time for one more question now. If there's anyone who's wanted to raise a question, but we haven't got around to answering it, please do reach out separately, and we'd be happy to explain the answers. A question on AI. How are Oakley's portfolio companies responding to the threat of generative AI?

I think the first thing to say is, it's an opportunity and a threat. And how we respond to it. first of all, we're making sure that Boards are engaging with this topic. Remember that there's clearly, different companies will gauge that opportunity and threat differently. Some Boards maybe are of less engaged others are kind of well ahead of us. Our job is just to make sure that this is being discussed at Board level and we're availing management teams with access to kind of expertise. Our general view is that we think for the majority of the portfolios is a considerable opportunity. And so to kind of do that, we talk about expertise, and that's really being driven by the Oakley Touring team. I mean, Oakley Touring team, really, principally, are looking to find appealing investment opportunities with companies that are being driven by generative AI. But they are also extensively sharing their knowledge with the existing portfolio companies. That also so -- so they've met most of the CEOs within the portfolio. They've done an analysis of our 4 sectors and the ways in which generative and AI will impact those. And they've also provided kind of workshops and teaching sort of kind of broader investment teams. As I kind of said earlier, we think this is a really significant generational shift in and technology, and it's one we really feel we need to be impressed off. In terms of examples of -- within the portfolio of companies and their and their response. The most obvious one is IU Group, with a launch of a an AI teaching assistant, Syntea. And this is using, an AI tool to help assist students learn at their own pace and style. And the findings and impact of this have been really impressive and encouraging. I mean, I think, there's a number of things about traditional kind of teaching techniques they're quite rigid. Even align techniques are quite rigid, but the majority of students learn with a -- in a room with a large cohort given exactly the same information over the period of time, and then they're tested on that information. And that will increasing be seen as a completely outdated mode of education. Whereas tools like Syntea can help assess a student's understanding through the questions and responses it provides. So it's understanding that a student maybe understands particular topics better than others. It receives certain information better maybe by written word, pictorial, et cetera. It has a leaning towards certain frames of reference and particular fields of interest. All of which you can incorporate and how it delivers information in a relative and, kind of, most impactful in a kind of way to the underlying student. What's really notable as well is that the student will ask an online teacher like Syntea at least 3 or 4 times more questions than it would ask a kind of real-life kind of teacher or lecturer. So that they're actively prompting for more information. And in doing so, revealing their own levels of knowledge or gaps in it. Other examples would be data platforms like vLex which is considering how best to incorporate AI into its kind of -- to kind of leverage the incredible library of legal information it has across kind of multiple countries. You have to be careful of that to make sure you're refencing that data. But you can certainly kind of turbocharge the solution using AI. And then finally, there's a company like [ Sea-Tac ], which as you may recall kind of uses contextual solutions to -- for advertising. So in a kind of [ cookie less ] world, it enables an advertiser to understand who the who the viewer is or the reader of a particular website. If you have that information from [ Sea-Tac ] and you combine it with some of the incredible kind of AI driven advertising solutions, you can create, real-time bespoke adverts for individuals based on the individual's personal interest and the articles they're reading, which is an incredible future for contextual advertising. Is that my -- is that our last question, Rosanna?

Yes. Thank you, Steven. That's probably all we've got time for. So I'll hand back to you to wrap up.

Thank you so much, and thank you for joining us today. As I repeated at the end of the presentation, the outlook is a very positive one for the Oakley portfolio of companies. And I think the kind of average EBITDA growth of 21% demonstrates it's kind of recurring ability to grow in spite of maybe end markets, which haven't grown particularly, over the last kind of 6 to 12 months. And we have a pipeline of really exciting opportunities. We signed, as we mentioned, the Dental Labs group in the last couple of months, and we expect to sign kind of further deals in the month ahead. And in the meantime, given the kind of size and holding duration of some of the existing portfolio, we look forward to kind of further attractive realizations within the portfolio. As you will no doubt be familiar, our exit track record is such that the these are deals that are often sold at significant premiums to the to the current book value, the average post IU Group is about 35%. So thank you for joining us, and we look forward to continued our performance, for OCI in the rest of 2023.