Pantheon International PLC (PIN) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to the Pantheon International PLC final results investor presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions listed today, and we'll publish those responses on the Investor Meet Company platform. Before we begin, we'd like to submit the following poll. And if you give that your kind attention, I'm sure the company will be most grateful. And I may now like to hand over to our partner at Pantheon Co-Lead Manager at PIP, Helen Steers. Good afternoon.

Good afternoon. Thank you very much for that introduction, and thank you to everybody online for joining me today. I'm going to provide you with an overview of PIP, which is Pantheon's FTSE 250 private listed investment trust. I'm going to discuss performance, describing our future ahead. And my presentation will probably take about 20 minutes, and then there'll be some time afterwards for Q&A. And thank you to those attendees and for those who've already sent in some questions. So first of all, Pantheon. Pantheon is a very well-known private equity investor, in fact, investing in private markets more generally for 4 decades. And PIP has been managed by Pantheon since inception, so since it was floated on the London Stock Exchange 36 years ago in 1987. PIP benefits from Pantheon's scale, reach and its global relationships. And that's really important in private equity because it's extremely crucial to be able to access those management relationships and to get access to the underlying deals. Pantheon is a global private equity investor. As you can see on the page here, Pantheon has 11 offices across the world. It's both global and local at the same time. We believe actually the good news does not have very far, and therefore, it's extremely important to have boots on the ground to have that access to private equity opportunities. It also takes a lot of resource. We have close to 500 people working at Pantheon, including 134 investment professionals. I mentioned scale and reach. We've got about GBP 93 billion either under management under advisory, GBP 61 billion under management, and that's catering to more than 1,000 institutional investors. And in fact, the majority of Pantheon's investors are institutional, so the pension funds, endowments, foundations, insurance companies and some multifamily offices. It's very important to have this access to information. We've built this up over a very long period of time. We sit on the advisory boards of literally hundreds of different private equity funds across the world, and that gives us access to proprietary information that we can then use to make a better assessment of the primary funds, but also crucially to get access to co-investment opportunities and secondaries. And just the last point on this slide before I go any further. Pantheon has been a leader in diversity and inclusion and in ESG more generally since -- really since inception. But since 2007, it has been a signatory to the UN PRI. And in fact, it was the second private equity signatory in the world. So very much committed to ESG. Now before I describe PIP's investment strategy, the current portfolio and performance, I just wanted to talk a little bit about the big news that we announced in August and then more recently regarding the change to PIP's capital allocation policy. So on August 3 when we published our annual results, we also said that we would commit up to GBP 200 million in this financial year to the 31st of May in order to acquire our own shares in PIP. Why are we doing this? While at the sort of discount levels that PIP has been trading at, it's extremely NAV accretive for PIP to buy some shares. We have a lot of confidence in the valuation of the portfolio, and I'll go on to explain why that is. We know the portfolio extremely well, and therefore, it seems vast that it's an extremely good use of funds to invest in a portfolio that we know so well. I want to stress the fact that we'll still make new investments alongside these major buybacks. Now last week, there was some additional news. We announced the tender offer, which is to acquire up to 150 million of our own shares at a price range of 280p to 315p. That's really to accelerate this buyback. Now the reason we can do this is because PIP is in a very strong place financially, a very, very strong balance sheet, and I'll describe that a little bit later in the presentation, but also because of the way that PIP invest. PIP has control over its capital allocation policy. It invests directly into the deals for the most part, and therefore, can be quite flexible in the way that it allocates its capital. So between buyback, primary co-investments and secondaries. And the other thing I would just say as well is that we believe that it's important also to change our capital allocation policy going forward. So beyond 31st of May, there'll be an extension of this policy, and we will be dedicating a certain portion of cash flows to the purchase to do buybacks in the future as well. So I just wanted to say that right at the beginning because it is a very large piece of news. Now just turning to the portfolio. Because it does have this flexible investment policy, PIP has been able to change the composition of its portfolio over time, and there have been changes over the last 10 years. Probably the biggest change is that PIP is much more of a direct vehicle now. So 52% of its net asset value is now invested directly into single assets, into companies, private companies and as either through co-investments, which are deals that we do alongside the manager, internal operating company or through single asset secondaries where we invest in a continuation vehicle that's essentially investing in an older asset from a private equity managers fund. So between the two, that's now 52% of the portfolio. We continue, of course, to invest in primaries. And these are overwhelmingly invitation-only access constraint management with the sorts of assets that we find it difficult to find on the secondary market or through co-investments. The other thing I just wanted to stress on this page is that PIP is very much a buyout vehicle. It's 71% buyout. And that's also with a sort of a weight towards small and mid-market buyouts, which we think is the least efficient part of private equity market. We will still be able to invest in a company alongside a family and often execute quite a lot of change there because the company has never had a private equity owner. So 71% in buyout and just 3% in venture, and I'll talk a little bit about venture later in the presentation. It's also important to say that this is a globally diversified portfolio. So it's weighted towards the U.S., which is the largest deepest market in the world, but also with the substantial portion in Western Europe with a weighting towards Northern Europe. And finally, in terms of company sectors, again, here, we've changed the composition over time. If you looked at PIP 10 or 15 years ago, the biggest industry sector would have been consumer. And within consumer, it would have been consumer discretionary. Nowadays, our portfolio is very much tilted towards what we see as the most resilient and defensive sectors. So these are information technology and health care. And here, we're investing behind some very long-term secular trends. Digitalization and automation is not going away anytime soon and neither are Asian demographics in the Western world. So we invest in these underlying companies that are benefiting from pretty powerful tailwinds. Overall, our portfolio is in a very busy robust shape. And just to give you an idea, when we look through to the underlying companies, 94% of our direct company investments are profitable. So this is a very robust, strong, resilient portfolio that's able to withstand and even profit from the current environment. Now I talked about how the portfolio has changed over time. This shift towards more direct is really key because it means we're able to select the underlying assets and as a sort of double quality filter here, because we've already selected a manager with whom we want to co-invest. And then on top of it, we can select the underlying assets. And here, we can really direct the portfolio into those areas that we think are particularly interesting. So from a sector point of view, we like areas such as software. So particularly software that's directed towards small and mid-market businesses. We think that's very resilient. And in terms of health care, we like areas such as health care services, which are helping to deliver health care more efficiently across the world. By going more into direct, more into these single companies, we've also been able actually to concentrate the portfolio a little bit more. So 10 years ago, we would have had close to 1,000 companies accounting for 80% of our NAV, and now that's down to just over 500 companies. And we've also rejuvenated the portfolio as well. So by doing more co-investments, which are current vintages, we've been able to reduce the weighted average life of the portfolio to just under 5 years. So I think you can see there are some of the things we've been able to do over the last 10 years, and this is the result of having a very active investment strategy overseen by an independent Board, which I will talk about later. Now I mentioned resilience and the fundamental value in PIP's portfolio. This is really key, and it's what gives us a great deal of confidence in that value in the portfolio, which has really been the fundamental behind us doing the very large buyback. So on average, when we exit our companies, the cost multiple of exits or the multiple of the costs that we need to pay for an individual company is around 3x. The current existing portfolio has a cost multiple of about 1.6x. So you can see that there's an embedded potential uplift, which we are trying to capitalize on over the next few months and years. Also, if you drill down into the underlying portfolio companies, you can see that this is a high-growth portfolio. Over the last 5 years, we've had annualized revenue growth of just under 20% and annualized EBITDA growth of around 20%, so high-growth portfolio. And that growth is coming both organically and inorganically. So organically, because we are invested in very high-growth sectors, which helps provide tailwind, but also inorganically because these companies are often a platform for us to then make add-on acquisitions and consolidate what can be very fragmented end markets. And then talking about robustness and resilience. I mentioned already that 94% of our direct company investments are EBITDA positive. But another interesting statistic is that our loss ratio for all investments, and that's both realized and unrealized losses, is only 2.2%, which we think is really testament to this resilience in the portfolio. You might say, well, if you look back into the financial crisis, would that be very different? If we take it back into the financial crisis and look at it for that longer period of time, our loss ratio is about 2.7%. So we think it's still a very, very good result. So I talked a little bit about exits. Here, you can see the history of exits on the bottom left-hand bar chart, the average annual cost multiple on those exits, which have been realized. And you can see that in 2023, our ex realization multiple costs was 3x, and that's very much in line with the long-term average, which is around 3x. The other statistics that we monitor very closely every time there is an exit on the portfolio, we look at the cash proceeds from that exit on a basis that cash does not lie. And we compare that cash realization with the last full valuation that was done of the underlying portfolio company. And here, you can see that in this financial year, that average uplift on exit was 27%. And that's very much in line with the long-term average, which is 31%. So again, that's a measure of this embedded value inputs portfolio and another reason why we have a great deal of confidence in what we're buying with the buybacks. So just moving now on to the results for the 31st of May. So here, we've got the results over 1, 3, 5, 10 and since inception. And you can see that on a NAV per share basis, the portfolio has performed extremely well over the medium to long term. And you can see there's outperformance there over the FTSE and over the MSCI, certainly over the 3, 5, 10 and since inception. And in general, you should be looking in a private equity portfolio fall between 300 and 400 basis points of outperformance over the relevant public markets. Now you can see as well that, unfortunately, the share price has not performed in the same way. And in fact, because of the prevailing discount that we've seen over a long period of time now, this is why we decided to embark on this last buyback program because of these sorts of discounts. It makes a great essence to acquire our own shares. Just turning down a little bit more into the portfolio into looking at those results over the 12-month period to 31st of May. You can see on the top left-hand side, the NAV per share movement from May '22 to May '23. And you can see there that we were able to register healthy valuation gains, 3.5%, despite what was going on in the macroeconomic environment and in the public market environment. We have a small amount of negative impact from foreign exchange, and that's due to the fact that around 78% of PIP's portfolio is actually U.S. dollar denominated. I mentioned earlier that this is very much a global portfolio, and therefore, there is exposure to the U.S. dollar. And there will be some volatility there from foreign exchange movements. We had a small positive impact from the share buybacks that we've done during the year and the offset from expenses and taxes. But what's quite interesting is if you dig into those valuation movements and you look at it by stage. And what you can see on the right-hand side is the core of the portfolio, which is buyout actually performed very well over the last 12 months. In fact, small and mid-market buyouts, which is 45% of our portfolio, registered a 10% increase in valuation. That was offset by a decrease on the venture side. So probably no surprises there. But the venture portfolio was down by about 21%. But I have to stress again that this is only 3% of PIP's portfolio. So the most risky part of the portfolio is only a very small percentage of it. So far in this financial year, we've reported performance as of 31st of August. It's still very early on in this financial year, but you can see on the right-hand side that we've managed to eke out some valuation gains, again, despite the environment. There's a negative impact from ForEx because of the increase of the pound versus the dollar over that particular period. That might have changed over the last few weeks, given the fact that the U.S. dollar has strengthened a little bit. But again, you can see that impact on the NAV per share and you can see again the long-term outperformance over the public markets. Now I mentioned the fact that the portfolio is in a good position. Historically, it's been an extremely cash flow positive portfolio over the 10 years since 2014. PIP's portfolio has actually generated GBP 1.7 billion of cash, so around about GBP 117 million on average per annum. Now that does ebb and flow according to activity in the M&A market. And at the moment, M&A activity is somewhat suppressed, which means that new deals are somewhat slow. So the rate of doing new deals has fallen off, and you can see that in the core rates on the top right-hand side. And the distribution rates or the exit rates have also been at a lower level. It's quite a similar distribution rate at the moment to the way that things were in the financial crisis. So we have been here before. One of the advantages of PIP is that it has lived through all these different macroeconomic periods over the last 36 years. Now the strong cash position has given rise to a very robust balance sheet, which again gives us the confidence to execute on this capital allocation policy. So at the end of August, we had GBP 65 million of cash on the balance sheet. We also had a completely undrawn multicurrency facility of GBP 500 million. So available financing once it's translated back of GBP 546 million, and that compares with undrawn commitments of around GBP 756 million. So if you take the available financing, you're adding 10% of the portfolio. And that's typically the least we would expect to see in terms of distributions over a 12-month period, and we are more than 100% drawn -- covered over our underperformance. So a very robust and very strong position in terms of the balance sheet, and that's what gives us the confidence to seize this current opportunity. Now moving on to say a couple of more words about ESG. I mentioned at the beginning, so PIP and Pantheon have a very long history in terms of embedding the right ESG practices into our portfolio. You can see here some of the milestones over the last period. I mentioned that we've been a signatory for a very long period of time. We've really been at the forefront of leading the industry. So serving on advisory committees, both for the industry associations but also more widely with our general partners trying to get them to embed the right ESG practices into that portfolio. And talking about the G or governance, on the next slide, I'd like to say a few words about the Board. So first of all, this is a fully independent Board. There's nobody from the management, nobody from Pantheon who sits on the Board. It's fully independent. It's also a very diverse Board in terms of experience. People are bringing a lot of different backgrounds and experience to the PIP Board. And we also have diversity in terms of the sort of the profile of the people on the Board. Importantly, too, there's extremely strong alignment of interest. So all Directors and shares, there's quite a lot of skin in the game, they earn 3.7 million shares as of the 22nd of September. And talking about the management, the management also owns a large number of shares. We can't report on the broader Pantheon Holding, but we can report -- compliance allows us to report on Pantheon Partners Holdings, and we own about 2.7 million shares. So definitely alignment of interest, both at the Board level, but also at the management level. And that really brings me to my final slide and also that I'll be able to take some questions, which is really a summary. I think this sums it up. PIP has been around for a very long period of time, has lived through a number of different macroeconomic environments, including COVID in 2020, 2021, including the GFC, including the dot-com [ boom and bust ], and if you go back far enough, the first Asian crisis. So has dealt with and has managed to, in some ways, actually profit through these different periods. Long-term outperformance, close to 12% annualized growth in the NAV since 1987. But it happens to still in that time. It's a very actively managed portfolio. It's globally diversified, and we have moved PIP pretty substantially, particularly over the last 10 years into being more of a direct vehicle and having more exposure to these very resilient and defensive sectors. We think there's a great deal of evidence here of the embedded value in the portfolio. And you can see the disconnect here on the right-hand side of the slide with the NAV and then the ordinary share price, and I think you'll see there why we have tweaked our capital allocation policy and why we have so much faith actually in PIP and in this opportunity for the future. And with that, I'd be very happy to take any questions.

That's great, Helen. Thank you very much indeed for updating investors this afternoon. [Operator Instructions] I'd just 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 Meet Company dashboard. Helen, we have received a number of questions ahead of today's event as well as a number throughout your presentation. So firstly, thank you to everybody for your engagement. But perhaps if I may, Helen, just start with the first one, which reads as follows. What gives you confidence in the underlying valuations?

That's a great question, and it's a very topical question clearly because of the buyback activity and the tender offer that we announced last week. I think, first of all, we've got proof. You can see the uplifts at which each online company is solved, and you can compare that with the last valuation in the portfolio. And as I mentioned, we've had an average uplift there over the last 10 years at 31%. And even over the last year, which was not as favorable an environment for exit, we've had a 27% uplift in values. So I think we feel very confident about those valuations and confident that we'll be able to carry on producing these sorts of results.

That's great. Thank you very much indeed. Next question, could you elaborate on the deal structure for a manager-led secondaries? How does this differ from primary or co-invest? And how do you make sure that there is transaction alignment across company management, sponsor and secretary investor? Lots in that question, Helen.

There's a lot in that question. So maybe I'll go each of deal sites. And I realize that in that portfolio charts, I went over it relatively quickly. So a primary investment is where we're investing in the fund when it's been newly established by the manager. So often we'll be a pretty large or reference investor in that fund. We've known the management for quite some period of time. And we will have an influence on the terms of that fund. So that's really primary. And we will certainly seek to gain alignment there between the investors and the fund and the manager, and that's started by looking at things like how much are they investing in the fund, what's their GP, commit more to the terms in terms of the carried interest arrangement. So all of that will form a very important part of our due diligence on a new fund. While we invest in a co-investment, that's slightly different because there, we're investing directly into the company alongside one of these managers that we know very well. Now I probably didn't mention actually in the presentation, so it's good to have an opportunity to talk about it now. But in 90% to 95% of cases, we don't pay any fees or carry to the manager at all. So those co-investments are free of any economics. Now we still have to get the alignment right. The way that we do that is to make sure that we're getting in on the same terms and conditions as the manager. So we're buying the same securities in the underlying company as a manager. And when we exit, we want to exit at the same time and on the same terms of conditions as the manager. So if they sell the company, we want to sell our shares at the same time. So that's co-investments. Secondary, so think of asset secondaries or where we invest in a single asset that's been taken out of a fund that the manager is managing. Now single-asset secondaries occur where a fund manager really wants to get some liquidity back to its underlying investors. It's under some pressure to do that, but it doesn't want to sell this particular company because it believes in the future of the company and think there's a lot more wood to chop and a lot more sort of interesting results. It can get more value to be created from this company. And therefore, the manager is looking for a way in which you can hold on to this company for longer, but also return cash to those investors that want it. So we can help with that by creating a new continuation vehicle. We take the asset out of the old fund, brought it into the new continuation vehicle and then we reset the economics with the private equity manager who carries on managing the business. Now those economics are really important. That goes to another of this question because we want to make sure that the manager is completely aligned, and therefore, they roll into that new deal any capital they have, any commitment they have in the original deal. They also need to roll all of that accumulated carried interest into that new deal and ideally put more cash in as well. So the actual terms can vary a great deal from deal to deal. They're very bespoke, very customized. But the idea is that if the company does well in the future, we make money and the manager makes money as well. I should say that our approval rate for these deals is actually quite low. It's around 11%, 12%. And that's because a lot of the opportunities that we see, and it's now about half of the secondary market, don't meet these alignments, these really important alignment questions and alignment criteria that we're looking for.

Thank you. Let's move on to the next question. Again, there's a couple of angles to the question. So forgive me for throwing them all at once. But in previous presentation, you said that the use of primary investments to complement the portfolio with assets that are otherwise hard to access via direct or secondary investments. Could you give some concrete examples? And are these primary funds mostly invitation-only?

Yes. I think I mentioned actually in this presentation as well. So it's a good question. So yes, first of all, these are access constrained. For the most part, invitation-only, top of our funds that is extremely difficult for even large institutional investors to get into. So these are very high-quality names that are basically closed to new investors. So I think right there, we're offering value to our shareholders. But also, in the case of, for example, some of the venture funds, it's extremely difficult to find those sorts of venture funds on the secondary market. They just don't get transacted on the secondary market. And we don't do any co-investments in venture companies. We think it's too volatile. So you don't get exposure through co-investments or through secondaries. And therefore, to get access to what are some of the best venture managers in the world, so really top decile venture managers, the only way to really do it is through primary investments. The other sort of area, which I think is quite interesting, is small and mid-market buyouts. A lot of these are quite small funds, again, access constrained, invitation-only. And those funds just do not come up on secondary market. They never come up. You can't buy them in the secondary market. And often, those managers are sticking very much to their guns in terms of deal sizes. So they don't do bigger deals, which means they don't invite co-investors into those deals either. So the only way to get those assets essentially is through a primary fund investment. But the bar is very high for some, and we see literally hundreds of the funds a year. And we select a very, very, very small number to go into PIP's portfolio.

Thanks, Helen. Let's turn to deal financing, if we may. What are the current credit spreads that the sponsors have to pay when financing a deal? How does that compare to pre-interest hike period? And are they in line with historical norms or slightly elevated?

That's a great question. So I would say the feedback from the market is that the spreads are actually quite similar now, spreads that comes out. Spreads are quite similar now to where they were before sort of the current more difficult period. So probably 300 to 400 basis points over base. What has changed clearly is the base rate. So the base rate from being close to 0 or 0 has now opt to much higher levels. So the overall cost of debt is higher, but the spreads are probably not too just similar. In terms of the impact on the portfolio, so the current portfolio, we had very detailed discussions with our managers as you can probably imagine. A lot of the interest rate exposure is actually hedged in the portfolio. So the managers have been quite canny about hedging that ahead of time. Probably yes, around 70% is probably hedged, maybe different from manager to manager. With new deals. So for example, this on our co-investment committee, so I see all the new deals coming through into the underlying portfolio companies. And clearly, the higher cost of debt is baked into the investment rationale and the business models. And essentially, there, the managers need to be able to get the growth in order to be able to pay the higher interest costs in those underlying businesses. And I think what it means is the bar is higher, so it's really only the best deals that we are investing that are getting financed at the moment.

Thank you. A question here from Julian. Thank you, Julian, for your question. Where is the impetus for more direct come from, investment team or Board members with the experience in direct investing?

That's a really good question, actually. I would say that -- I mean, Pantheon has been investing in direct co-investments for quite a long period of time. There's not a new activity for Pantheon, and Pantheon has other clients that do, do co-investments. So the -- I suppose the knowledge base has been there, and the experience and the expertise has been there for quite some period of time. And the Board has been enthusiastic about increasing the level of co-investments. I mean seeing Pantheon's overall expertise and experience and performance in co-investments, the Board has been quite keen to incorporate it. So that's really a joint decision really between the Board and the manager. Where did the impetus come from? So I mentioned during the presentation that when you do a direct investment like this, you've essentially got this double quality [ for to ]. So the deal in question has already come through one of our top managers. So it's already been through all of their checks and balances. And then we have the luxury of being able to pick the best deals from those deals that come from some of our office managers. So for us, it feels as though we're actually very privileged. We're able to pick sort of the [indiscernible] of these deals. It also means that we're able to direct the portfolio. So if, for example, you want more health care services, we can choose health care services. If we want to do more in financial services, for example, we've got some insurance brokerages in the U.S. in the portfolio. We've actually got some wealth management in the U.S. in the portfolio. We can do more of those types of deals. So I think particularly within the current environment with our -- with the stress that we're putting on resilience and defensiveness is really important for us to be able to select those underlying assets.

Thank you very much indeed. Let's move to around hedging policies and the question from [indiscernible] follows. Would you ever consider hedging your FX exposure?

Yes. So I would say that this has been a question which has been around for a very long time actually. We've looked at hedging. It's extremely difficult to hedge in private equity because, unfortunately, you don't know your cash flows in advance on asset-by-asset basis. So you don't know exactly when an asset is going to exit the portfolio, in which currency and where. So I think it's extremely difficult to have that visibility. It's also extremely expensive to hedge at that level. So we looked at it. It's difficult. I think, over time, it balances out. So sometimes in having U.S. dollars will be a headwind as it was in the period that I just described. Sometimes a little bit tailwind. The other thing I would say is that if you look right through the assets, I mean, clearly, many of these assets are actually global and are present in a number of countries and have revenues and earnings in a number of different currencies. So I think in a way, you're getting a lot of diversification there at the underlying asset level. The other thing I would say is we have learned over time rather crucially to make sure that we have a natural hedge between our financing and our portfolio. So our portfolio is about 78% U.S. dollar. And if you look at our financing, clearly, we've got cash on the balance sheet that is held in a mixture of pounds, euros and dollars. And then our debt facility, our RCF is denominated also in a mixture of U.S. dollars. That's the major part, euros and pounds. So we got a matching there between assets and liability, if you like.

Great. Thank you. Let's move on, if I may, to Martin's question. Does PIP have the capacity to lead its own direct transactions? Or is it always reliant to pumping deals being introduced by managers?

That's a good question, too. So the answer is no, we will not go independently into a deal. Now the reason for that is it's actually partly philosophical. We don't want to compete with our best managers. So we are very much a relationship-driven organization. We like to work in partnership with our private equity managers so that when they have a deal, they feel quite confident that they can come to us and we can add the additional capital they need as a co-investor. If we were going to do direct deals, we would find ourselves actually in competition with some of our managers, and that might make for them less willing to show us the deals that we want to see on the co-investment side. So I think for us, it's all about partnership. It's all about being able to work with those top managers rather than become a direct investment organization.

Thank you. What's the typical hold period for a single asset manager secondary?

It varies. So a little bit like a co-investment. I mean we've had some co-investments, which have exited very quickly after sort of 2.5 years. That's probably too quick because in order to implement the value creation program, you probably want a bit more time than that. And sometimes we've held co-investments for 6 or 7 years. So it really depends on the underlying asset. And the same thing goes with single asset secondaries because if you're in the middle of a buildup program, so say you're consolidating a fragmented market, it might take 3 or 4 years to actually target all those add-on acquisitions that you want to add to the platform and then integrate them into the platform and obtain synergies there. So I can't really give one number. It just varies very much on the underlying asset.

Thanks, Helen. There's a couple of questions around the same kind of thing. But if I summarize, it's as follows. Are there any particular sectors or themes that, I guess, you're excited about at the moment?

So I mentioned the long-term secular trends. I think that's really important because this is a long-term investment vehicle. And therefore, we didn't sort of spend with the wind. We like to identify trends that we think are going to be around for several years. So I mentioned digitalization and automation. I think with that, still at the early innings of that because although people always automatically think about information technology, when they think about digitalization and automation, it's also about the application of that -- of those digital techniques to other sectors. So for example, we invested in a company called [indiscernible]. We invested with a company that supplies software for medical practices, medical clinics. It was a co-investment actually. And that's all to do with the digitalization of medical records and allowing patients to be able to have more access, easier access to records and for clinics to be able to run themselves more efficiently. So that's an application of digital in health care services. There's also application of digital in industrial practices. So Internet of Things, connecting more devices and applying that also in more of an industrial setting. So I think all of that, we find really, really interesting. In terms of -- I talk about Asian demographics, I think, unfortunately, with the aging of the world and with the prevalence of very chronic diseases, which tend to afflict older generations, more chronic diseases -- there's a prevalence of cancer diabetes and minor things like cataracts. We're investors in a chain of clinics in the U.S. that provides cataract surgery. Also anything that helps to make the delivery of health care more efficient. So another example, we've invested in a chain of sort of image diagnostic clinics in the U.S. out of hospitals, which are a lot cheaper to run and more accessible for patients. So it's a number of different themes, but there are themes that won't go away. So people would say, what about artificial intelligence? Yes, I mean that is embedded in so many different things in the portfolio. Companies are using artificial intelligence, for example, to target consumers more intelligently to be able to respond to their needs. And that's affecting companies, not just in the consumer sector, but also in the industrial sector, even in financial services. So these are more sort of long-term themes than sort of individual micro sectors, I would say.

That's great. Thank you very much indeed. Well, Helen, thank you very much indeed for your generosity and your time this afternoon. If any more further questions that we haven't got around during the presentation, we will make this available to the company post today's meeting. We'll add any responses where it's appropriate to do so. And Helen, I know investor feedback is always relevant and particularly important to you and to the Board. So I'll shortly redirect investors to give you their feedback. But I wonder before doing so, if I may just ask you for a couple of closing comments.

Well, first of all, thank you very much indeed for giving us this opportunity to present to you, and thank you very much for your questions, which were really interesting questions actually. So thank you for that. And I think I would just like to end with saying that we're very confident about PIP. It's a fantastic way to access private markets in a globally diversified way. You can see the number of underlying portfolio companies. You can see the fact that it's invested actually in some very resilient defense sectors. We've got very low loss ratios. It's a buyout portfolio. It's a mature portfolio. It's not a venture portfolio. And we think this makes it a really interesting vehicle for investor shareholders to consider committing to you for the long term. So thank you.

Thank you once again for updating investors this afternoon. Can I please ask investors not to close this session as it will now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations. It's going to take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of Pantheon International PLC, I would like to thank you for attending today's presentation. Good afternoon to you all.