Partners Group Private Equity Limited (PEY) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Princess Private Equity Holding Q4 2021 Investor Conference Call and Live Webcast. I am Paul, the Chorus Call operator. [Operator Instructions] At this time, it's my pleasure to hand over to Felix Haldner. Please go ahead, sir.

Thank you. Good morning. Good morning, ladies and gentlemen. Welcome to our Q4 presentation of Princess Private Equity Holding. Following the presentation, we'll have a Q&A session. The presentation is based on unaudited figures. I'm pleased to be accompanied by a colleague of mine, Adrien Paul Lambillon, he's a member of our ESG & Sustainability team based in Zug in Switzerland and the topic is going to be like a focused topic of today's call. Before discussing the quarterly figures, I'll provide a short introduction to Princess and its investment manager. So Princess provides shareholders with exposure to Partners Group's direct private equity investments in transactions alongside our institutional investors. The investment strategy focuses on identification of transformative trends across sectors and then on investing into attractive companies with a clear development potential. As a Group, we have defined a number of bigger themes such as digitization, automation, new living, decarbonization, and within these giga themes, at any time, we define probably about 40 to 60 investment teams and sub-teams across our 4 private equity sector verticals, be it technology, goods and products, health and life and services. Once we identify companies within these investment themes, we build leading companies through platform building and business transformation. And in this journey, we fully integrate ESG factors in the investment process, both to drive value creation and mitigate risk. Partners Group has deep resources. We are a leading global private markets firm. And we have invested over $87 billion in private equity across a number of market cycles. 170 direct equity professionals supported by a global network of 360 more industry experts and operating directors with very deep industry expertise help them transform the portfolio companies. Finally, Princess' objective is to generate long-term capital growth and an attractive dividend yield. And so the NAV total return stands at 11.4% per annum over the last 10 years. and even better share price total return of 16.6% per annum over the last 10 years. Dividend objective remains at 5% per annum of opening net asset value by the semiannual payments. This brings me already to Page 5 to the NAV and share price performance. So whilst we had a slight dip in the fourth quarter, which I'll comment on in a bit more detail in a minute, the whole year brought a total return of 19.4% and a share price total return of -- short of 30%. This compares with the MSCI world with year-to-date of '21 performance of 31%. The year was very active for realizations and investments, and this also holds true for the fourth quarter where, in particular, we had realizations of Foncia, and we call it here Foncia Roman I because we reinvested, but then also Pacific Bells and Straive, the former SPi Global. We invested in DiversiTech, Breitling and BluSky, and we also allocated some money to senior loans, basically bringing the total to about EUR 135 million in that year. That's basically money parked to be invested in the midterm in private equity direct investments. And finally, we distributed the second interim dividend of EUR 0.335 in December, which brought the total dividend in 2021 of EUR 0.67 per share in line with the company's objective to distribute 5% of the opening net asset value. On the next page, #6, we observe that the Princess NAV and share price continued to perform positively and maintained the long-term outperformance of public markets. Whilst on the next Page 7, we observed that the discount to net asset value opened from around 5% to 6% at year-end to almost 17%, 18% as we speak as a consequence of the market volatility, which I'm sure we have all observed these days. This brings me to the key figures on Page 8. The net asset value by now is well over EUR 1 billion which brings the investment level, including the cash we deployed into senior loans to almost 100%. We actually, for technical reasons, drew on the credit line over the year-end as we expected some distributions from some transactions that were then delayed. We just drew on the credit line, which is expected to be paid back in these days, actually. The commitments to underlying funds is basically to Partners Group flagship programs stand at EUR 116.6 million. However, as we have repeatedly said in these calls, technically, you would only call about EUR 72 million of them as really active unfunded commitments, as they are anticipated to be called over the next couple of years whilst the balance is its commitments to mature funds that are not anticipated to be called certainly not in full. This already brings me to the portfolio review on the Page 10, where you can see the revaluations for the 10 largest portfolio companies in the fourth quarter and in financial year 2021. The largest move at least in the last quarter, on the positive side, it was by SRS Distribution. This is the U.S.-based company, which distributes roofing products and provides with residential and commercial roofing designs to the roofing and building contractors. So this was valued upwards due to very strong financial performance by on the U.S. building market paired with a very strong management team that very actively acquired businesses in the last financial year. So there were about 17 and 26 greenfield branches opened compared to about 12 and 16 greenfield the year before. The second company, Foncia, on this list, I'll cover in more detail a bit later in this presentation. Although AMMEGA benefited from valuation, benefited from higher revenue and EBITDA, there was a significant pickup in sales in all relevant regions, including in EMEA, Americas and China. PCI was slightly declined in the fourth quarter due to technical reasons, had a good year, particularly increased its reach by a landmark acquisition in the last quarter. Lyophilization Services of New England was closed another well at the premier contract development and manufacturing organization. Vishal benefited from reopening and particularly from sales, strong same-store sales growth, particularly during the festive month of October, November, supplemented by the launch of new stores. So as of the end of December last year, the company has opened 62 new franchises in the fiscal year despite some restrictions owing to COVID-19 in India. Vishal actually is part of its strategic initiatives to increase its share of private label brands and general merchandise sales, continues actively suitable vendors in countries other than China, including Vietnam and India and also has been able actually to build up its fabric consolidation and garmenting capacity as a part of its actual diversification assets. Civica increased in valuation, again due to strong increase in revenue and EBITDA. Civica is U.K.-based kind of, I would say, critical software solution provider, increased in tandem with its strong financial performance. Civica has also made progress on extending its platform and completed actually 4 acquisitions in 2021, including Docs Software, a digital medical record specialist in Australia, which was added just in December last year. The next on the list is EyeCare Partners, the largest vertically integrated medical vision services provider in the U.S. that offers patients kind of medical optometry, ophthalmology and certain subspecialties. So both revenue and EBITDA over the last 12-month period increased year-on-year as the business continued to develop well. In November, EyeCare Partners closed the acquisition of CEI Vision Partners, a network of ophthalmology practices in the Midwest and Mid-Atlantic. And the addition actually will result now really in EyeCare being the largest combined group in this clinically integrated eye care field in the U.S. Fermaca is on the negative side, particularly in the last quarter, but also in Q3. This has mainly to do with delays basically. It's basically a revised midterm outlook that drove valuations downwards. We suffered delays or Fermaca suffered delays in certain government permits, but also delays in construction. We very much hope this is going to reverse in due course. But as we are swift in adjusting the devaluations for changes in EBITDA expectations, there was this downward valuation. Noteworthy to say that we are still well on track to exceed our underwriting assumptions in this transaction. Noteworthy to see that we -- the top 10 companies are just about 33%, which compares to maybe closer to 50% in maybe as little as a year ago, where we had more -- some larger positions and by that a bit more of concentration. So by that, we need to go to the next 10 to reach more than 50% or to the next to a total of 25 to be at about 60% of the NAV of the total portfolio. This brings us well into the next page, where you can also see how well diversified the portfolio is by now across investments by sectors, across investments by region and by vintage years. So by that, investors in Princess Private Equity have kind of an old weather direct private equity portfolio that distinguishes also against some of the peers in the market. If you look at the portfolio metrics, we can observe a significant increase in revenue growth over the last 12 months and actually in EBITDA growth, so which basically is part of the reason or the most important reason probably for the total NAV increase in total in NAV for the company. The EBITDA margins are at solid around 18.9%, and valuation and debt metrics only slightly changed. Noteworthy also a very sustainable capital structure comprising on average of more than 60% of equity across the portfolio. This brings me more generally on how we invest. And I would bring it or shorten it here into a very short formula that we start with our thematic sourcing. Again, the overarching giga themes and then the definition of sub-teams and sectors at any time between 40 and 60 of them which is a result of deep thematic research to then ultimately identify high conviction sub-sectors. Typically, this is well in advance of the investing in specific companies. And we then buy that, send our troops, so to speak, to search for the gems or for the middle market or upper middle market companies that are active in these teams and sub-teams, and we need this time to familiarize ourselves with the asset, with the management team, with the current owners and so on. Once we own them, our entrepreneurial ownership and governance playbook comes into the game. So we run our businesses as entrepreneurs, and we drive fundamental value creation. And by that, we want to achieve a sustainable EBITDA growth in our portfolios, including by factoring in strategically our ESG factors. And by that ultimately lead to a kind of a transformational investing as we have seen, for example, in GlobalLogic, which we exited last year. Foncia, again, we'll be exiting this last quarter and then reentered or PCI similarly that we exited last year and then reentered in one way. And all of them actually resulted in gross total value over paid-in or gross multiples between 3 and a bit more than 5. This brings me to maybe a more specific example, as we just talked about Foncia, how does this transformational investing then really look like in a bit more detail? So Foncia, as investors -- long-standing investors will know, is by now a European leader in property management and services. It's actually the market leader in France. It's by now the market leader actually in Germany, in Belgium and the #2 in Switzerland. And it provides just joint property and lease management, letting services, some brokerage and some complementary services. By now, it actually employs more than 12,000 people. And it has the sales figures as depicted on this slide. Now if you come to the sourcing, so the thematic sourcing, I mean, we were certainly attracted by this stable, resilient services business for a number of reasons. So it fits very well in our digitization and business efficiency theme. It suits -- it fits into kind of a theme that there's an increasing regulation in the market and it fits into the theme of environmental sustainability. The addressable market in terms of dwellings, for example, in France alone, is steadily growing. And Foncia's dwellings under management have reached close to EUR 2 million out of that. So we tracked this asset for quite some time from 2015 onwards. We developed actively at a relationship with the CEO in the year to process launch, we developed a relationship with TT, then owner, Bridgepoint Eurazeo. And then we also were investor actually in Foncia's debt between 2011 and 2016. And by that, have a very profound and deep insight. Regulation, as I said, as a major driver for outsourcing in this market. There are a number of laws, which I can't even spell, but ultimately drove people to outsourcing which you can see then in the lease management, the private landlords figures that steadily go up. Once owning the asset, one of the landmark projects apart from the M&A activity, where we added more than 260 smaller property managers, we actually went into a digital transformation project. So we established the team, the strategy. We actually employed software engineers. We developed partially in-house, our own software. That's not because we like to develop software just because there's nothing else on the market that was suitable. And we are now in the midst of actually implementing a new organization and rolling out the software. So we continue the journey with Foncia as we reinvested the chunk of our proceeds out of a third-party transaction where we welcomed the TA Associates, a renowned sound fund with 25% in equity. Then other realization activities in the fourth quarter, and we're now on Page 18, is Pacific Bells, that's the kind of a franchisee of Taco Bell's, brand of the Taco Bell's brand in the U.S. Terms were not disclosed. But the exit is very much in line with our underwriting assumptions. What we did in brief in the 6 years to 7 years is we engaged in tuck-on acquisitions, so M&A activity, and then in integrating the new businesses. We invested in technology, particularly to fasten the delivery times and to increase customer satisfaction. Another exit in this period was Straive. This formerly also known as SPi Global, a leading independent content and data solutions providers whose clients are basically publishing houses and similar organizations. So in relation to Straive, we transformed it into a technology-driven business. So with strong positions in the research, content and in the ed-tech data solutions market. And finally, Hortifruti, Brazil's largest fresh food retail chain was sold. And during our holding period, what we did is basically, we doubled the store base, we created and expanded Hortifruti's online capabilities. We optimize its delivery of fresh products to homes and so on. In relation to investments in the last quarter, we invested in DiversiTech, which I'll cover in a minute. We invested in Breitling alongside actually CVC, it’s a leading Swiss watchmaker, what do we want to add? We want to help management team to further accelerate growth, for example, in the direct-to-consumer space, but also to build an own retail network, particularly in Asia and the U.S. In this period, we also experienced an add-on, a follow-on investment in PCI, which I mentioned before. And we added or closed on BluSky. BluSky is a provider of remediation and restoration service for commercial, industrial, healthcare, multifamily real estate, hence, probably the name BluSky. So after some rain and [ hazards ] and wind and emergencies, you want to see the BluSky. So this is a company with almost 1,000 employees, serving more than 5,000 customers across the U.S. Many of the customers, insurance companies actually and landlords with multi-site buildings. So what we want to achieve with them certainly enter new markets, expand on the services capabilities, and partnering with customers on certain ESG and workplace safety measures. With that, maybe a focus on DiversiTech. DiversiTech, is a manufacturer of equipment pads and air conditioning condenser pads. You may remember, we acquired Reedy some quarters ago, which is more a services provider in the HVAC space, which we like particularly. Now this is a manufacturer with over 6,000 customers with 30,000 storekeeping units with 1,250 employees in 20 locations in the U.S., in Canada and U.K. And what we would like to achieve with DiversiTech and its management team is certainly we want to transform sales and marketing through new product development, digital platform enablement, pricing optimization and so on, some operational expansion and certainly scale the M&A capabilities and velocities. There's also a plan to expand in European markets. This brings me to the near-term pipeline. So the next, let's say, 6 months, particularly for investors who may fear that we can't deploy the money, that's all on the contrary, whilst we are very disciplined, there are a number of transactions actually in final stages, actually one of them here on the right -- upper right-hand side, upper and deep dermatology practice that is basically now acquired. It's a forefront dermatology, and I will be happy then to expand on that story next time in May probably. There's also -- actually in all of the -- of our vertical sectors, we've got a very promising acquisition targets, which we will then certainly be commenting on in the next quarters to come. With that, I'll hand over to my colleague, Adrien Paul, as we have in last quarters only briefly touched on kind of on what we are doing in relation to ESG and its integration, we want to give you some more meat to the bone and expand on some examples. So please, Adrien.

Thank you, Felix. Yes. Thank you very much. Hello from my side, and thank you for joining today's session. In the next couple of minutes, I really want to give an overview of our experience in the ESG sustainability space, our governance in Partners Group and really explain how our ESG approach is strategic and really focuses on value creation within our portfolio companies. So if we turn to slide, Page 23, what you can see is our experience as a responsible investor. While ESG and sustainability has become a very trendy topic in the past 2 to 3 years, while we have been implementing and considering ESG within our investment approach for almost 15 years. We have been in 2008 one of the first private market investors signing the UN principles for responsible investment. And over the past 6 years, we have consistently earned the highest rating on their annual benchmarking for our ESG strategy and governance, but also for our direct private equity approach. We have developed internal tools, ESG due diligence tools based on industry-leading frameworks such as the SASB Sustainability Accounting Standards Board and really integrated these industry-leading frameworks and standards into our processes. In 2020, as you can see, we launched our climate change strategy, which is also aligned with the industry-leading task force on climate-related financial disclosure. So it's really realigned with industry standards for financial -- for the financial industry in terms of climate change. One achievement that we -- from 2021, which we are very proud of, is that Partners Group Holding has been included in the Dow Jones Sustainability Index. So we are the only global private markets to be part of this index, which includes the most sustainable 320 firms worldwide. And this really confirms our position as a corporate sustainability leader in private markets and it really allows us to lead by example for our portfolio companies because we can only drive change within our portfolio companies if we, ourselves, commit to the highest ESG standards, right? So we cannot expect anything from our companies that we ourselves do not implement. So this was a big achievement and helps us really work along with our portfolio companies and share the know-how that we have gained in the past years to become such a corporate sustainability [ dealer ]. If we turn to the next slide, you see an overview of our governance of ESG and sustainability within our company because we believe basically we need to drive ESG within a firm, we need a clear governance, clear ownership of sustainability topics at each level of decision-making. So what you might have read last year is that our former Co-CEO, Andre Frei, who has led Partners Group for 8 years, and has transitioned into a role of Chairman of Sustainability, so he is now leading with the same passion and drive our overall sustainability strategy for Partners Group Holdings, so the corporate and our portfolio and working together with the executive team and the Board of Directors on improving sustainability at our firm and that portfolio. Furthermore, you see on the right, we have a dedicated ESG & Sustainability team headed by Carmela Mondino in which I'm part of. It's a global team, and we are basically in daily interaction with our portfolio companies. And our focus is to design the processes that our investment professionals use when doing due diligence on investment opportunities and then supporting them in cases of material ESG risks or opportunities they have identified and then driving ESG value creation as soon as we've acquired the company. The Page 25 really aims to summarize our approach, our strategic ESG approach based on active ownership and put it a bit into perspective into what we know or what the market knows from public markets or traditional fund investments. So on the left, you see what public markets commonly refer to as a stewardship with terms such as ESG integration or engagement, and these are processes or approaches which are very much focused on risk mitigation, right? So investors in this space try to avoid certain investments, screen investments for ESG risks pre-investment. And then when they're invested, they engage with these companies so they try to challenge them on certain ESG risks. But at Partners Group, since we are active owners, we have the governance rights and we are in the driver's seat, we have not only the possibility, but also the responsibility to drive change and improvement within our portfolio. So we go beyond this risk mitigation approach, commonly referred to as stewardship in public markets. and really focus on creating value by enhancing and transforming our portfolio companies. So what do we do? Well, we have, on the one side, a top-down approach where we impose and implement minimum ESG standards across our entire portfolio. So we want there to be a clear ESG governance, clear ESG responsibility at every level of decision-making just as it is the case within our own firm, right? So we lead by example with our ESG governance and help the companies implement the same governance within their company. And then we look with the management of these firms to develop tailored ESG journeys. So really strategic ESG initiatives which address the topics that are material for the specific company because this is obviously the topics relevant for each firm differ depending on the firm and the industry. In some cases, we even try to really transform the company to best-in-class companies within their industry, within their sector. So these are the strategic ESG priorities owned by the Board and advised continuously by the ESG team. So if we turn to the next page, you see how this -- our approach translates into the ESG -- the investment process, so how ESG considerations are really part of every single step of the investment process. So on the pre-investment side, the sourcing and the due diligence, you see that on the sourcing side, we've developed a responsible investment framework for our investment professionals to guide them into which investment opportunities we like and which ones we want to avoid. And what I mentioned before, we have developed proprietary ESG due diligence tools to support our investment professionals in their analysis of material ESG topics for the company. But the real angle where we really drive change within companies is during ownership. And our strategic ESG approach during ownership is based on 2 pillars, which is the ESG journey, so our initiatives within the companies and ESG dashboard, which is our approach to measuring the ESG progress and identifying further areas of improvement. So this has been a lot of theory, let's turn to the practical side and to concrete examples. So over the next 2 pages, we have included 2 examples of companies that we've invested in 2017 and 2018, respectively, which you should all know, and I'm sure Felix has told you about them. So the first company is Techem. It's a German company. It's a leading provider of submetering services and energy efficiency solutions. And there we have -- let me start with the G component because that's the one that really allows for improvements in the environmental and the social dimension is, as I mentioned, the first step of the ESG journey is really to roll out Partners Group's ESG governance framework within Techem so that we assign the Board Director and Executive Committee member and we hire at management level an ESG or corporate sustainability responsible, which owns the sustainability strategy on a daily level. And we have successfully done this. We've hired a sustainability manager, which is really in charge of driving the sustainability strategy, which does workshops with senior management. We've done the first workshops when we onboarded the company. But now this sustainability manager works with us on a daily basis to really implement what we have identified. What have we identified? Well, at the beginning during the due diligence process, we knew we have to focus on climate change. So the company when we invested did not know how much it emitted. So we conducted what we call our climate change suite, which is a systematic approach to identifying and managing climate-related risks and really helping the company to measure its carbon footprint and define specific actions to reduce the carbon emission and also fortify their business model against climate-related risks. So we've done this with the company over the past 3 years. We've measured the Scope 1, 2 and 3 emissions. The company has published its first corporate sustainability report last year, showing its emissions and showing really in detail all the work we've done with them and they've committed to defining a climate road map this year and setting a target date to climate neutrality. Health and safety was also an important topic, which we've improved at the company, especially on the supplier side. Let me turn to the next example, which is an American leader or a leading provider of infrastructure locating services, it's an investment we've done in 2017. So it should be known -- it should be well known by our investors by now. And there, the focus, obviously, the first step was also establishing the governance, but the key focus on this side was really employee health and safety, given the nature of the business. This is the key topic we had identified during due diligence, and it's where we started our ESG journey. The company has grown through a lot of M&A in the years before we acquired it. So there was no harmonized health and safety protocols across offices and sites. So this was the first thing that we established. We held over 140 interviews with senior management, field technicians, supervisors to harmonize them to improve them, to establish and adopt a 0 tolerance safety program for the 9,000 field technicians. And this successfully then eliminated also over 1/3 of motor vehicle accidents and reduced the injuries rate by 50%. So these 2 examples really highlight how during the ESG journey, we focus on the topics that are most material to each business. And it is really a tailored strategic approach that we do at every company within our portfolio. These are all nice words, but we're a data-driven society. We want to see achievements, improvements. And if we turn to the next page, you see our second pillar of our strategic ESG approach, which is our dashboard. Our dashboard basically consists of 12 KPIs, which we publish in our corporate sustainability report every year for every direct portfolio company. It's the 12 most material ESG KPIs in the environmental, social and governance dimensions across all industries based on the SASB standards. And well, the key aspect is that we send out an annual ESG KPI survey to our portfolio companies to really monitor, track and measure each of these dimensions that we show there. So this is as compared to public markets where you can just get data from MSCI or Sustainalytics, this is really an operational work that we do, where we work with our portfolio companies, helping them to measure each of these dimensions, each of these KPIs and identify together where we've improved and where we still need to work more and focus more, which you see by the different cutters in the dashboard, which are focus areas, priority topics which need to be improved. And if we turn to the last page of my section, basically, we aim to be very transparent and held accountable for what we do with our portfolio companies. We publish ESG K studies, that's the one we've described here and the dashboard in our client communication and are always happy also to set up bilateral calls with investors who are interested to know more about our approach. So Felix, I'm handing back to you.

Well, thank you, Adrien-Paul. By that, this brings me already to the summary of -- and then to the Q&A. On the Page 32, you will reckon we have a very established strategy based on our thematic investment approach. We built companies once we own it through the platform building, through business transformation. And as we now heard in more detail, we fully integrate ESG factors. We have the deep resources that are required that are necessary for these transformations. We work with these companies, with the management teams, bringing in our resources, our network, and then by that, we built actually a very diversified global private equity portfolio, providing exposure to thematic growth trends. So it's well balanced across investments in value creation mode. There are mature investments where we seek to crystallize value and in the ongoing supportive exit environment. So as I also showed, there's an attractive near-term pipeline, investment pipeline across regions and all of our sectors, vertical sectors. And so by that, this all should support the redeployment of the capital and then also, of course, to drive the net asset value in future. By that, this is the end of my presentation, and I would give back to Chorus. So yes, we have...

We'll now begin the question-and-answer session. [Operator Instructions]

Okay. So I'm reading the questions we've received. So I think the first question, I can take Felix. It's about SFDR regulation of Princess. Yes, in the EU, we currently have the upcoming Sustainable Finance Disclosure Regulation, which classifies funds into Articles 6, 8 and 9. And basically, all Partners Group's investment solutions and Princess as well are classified as Article 8. So they really integrate sustainability considerations throughout the entire investment process and can therefore be classified as Article 8. The next question, I think that's for you, Felix. Do you expect significant exit activities in 2022?

Well, given the maturity of the portfolio, I do expect exit activities this year, they are most likely not as active as we have experienced in '21. And part of the reason is also '21 basically experienced -- well, in '21, basically, we exited investments we wanted to exit in '20. So by that, it was a bit of an extraordinary year, so I expect it more to come back to normal levels.

There's actually a next question, maybe related. Given the current market volatility, is it possible to achieve more attractive prices?

Look, I -- we can't observe this right now. We can't observe it as of yet. Typically, it takes a bit longer until kind of market corrections tickle down to valuations. So we still observe high valuations, particularly in the sectors we are because there are sectors, subsectors, the themes, where there is tailwind and where we basically go for attractive companies, and so we fully pay the price. As I mentioned in earlier calls, probably the most important remedy, then over time is basically the buzz word value creation. We need to create the value once we own the asset...

The next question, I think I can take, it's also ESG related. It's -- can you walk us through the onboarding of the investment from ESG perspective. So, as I've shown in the 2 examples for Techem and USIC, the ESG journey at Partners Group starts with what we call a hub day. So our ESG & Sustainability team with our investment professionals meet the senior management of our portfolio company. We onboard them to Partners Group's platform. We show them our strategic ESG approach, what we have realized within our past portfolio companies, examples of what we're working on. And we really show them again what are material ESG risks and opportunities that we have identified during the due diligence process and that we would like to work on with them. But then we really leave the company and our team 6 to 9 months of time to reflect on what are the priorities for the portfolio companies, which one do we want to address first in the ESG journey while also already establishing the ESG governance. So really defining sustainability responsibility at every level of decision-making at the Board, the management and the executive team level.

Now I think that's an easy question. This is for me then. How much is invested in senior loans? Currently, it's EUR 135 million. And maybe I'll take another one. There was a liquidity shortage end of the year that caused us to draw partially on the credit line. As I mentioned, this was a technical issue. We expected certain proceeds from the sale of Voyage Care which was published. And this has, for whatever reason, I don't know exactly, has been delayed to January. Another question, how do we find our portfolio companies are coping with unexpected inflation increases? This is certainly an issue for portfolio companies. Having said so, I would just say that as most of our companies are middle-market companies that enjoy a healthy growth that are in sectors with tailwind. So there is quite a bit of price-setting power, and so by that, I expect our portfolio to be way less affected by potential inflation increases than maybe the general economy. I think by that we are there.

Yes, I think we have no more questions by the audience. We can call it a day.

Thank you very much.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.