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

Good Morning. Welcome, everybody, to the Q1 Princess' call. My name is Cyrill Wipfli from Partners Group, and I would like to introduce you today to Andreea and Federica. Andreea is responsible Senior Product Manager at Partners Group for Princess and knows the product inside out. She will going forward to do Investor Relations together with me, and we will present today the Q1 highlights. Federica is responsible Senior Portfolio Manager at Partners Group for Princess, and will present today the portfolio. With this, I already hand over to Andreea.

Thank you, Cyrill. It is a pleasure being with you and the audience today. Before we start, if you'd like to ask any questions during the webcast, please use the Q&A tool which you can find on your screen. We will make sure to answer you at the end of the presentation. In the interest of time, we will group similar questions and answer in one go. If we run out of time or you have additional questions, please don't hesitate to contact us by email at princess@partnersgroup.com or through the Contact Form available on the website. I am pleased to report that Princess's NAV developed positively during the quarter achieving a NAV total return of 3.6% for the first 3 months. Value creation at portfolio level contributed 4.3%, while currency effects also supported the NAV growth. A number of portfolio companies contributed to the performance with the largest 3 contributors to the NAV increase being top 10 companies for Princess. Namely, the recently announced sale of SRS Distribution. The second largest portfolio company was the largest contributor to the NAV increase, considering the uplift to Princess's prior carrying value. Further, PCI Pharma Services, a global provider of outsourced pharmaceutical services in the U.S., reported double-digit revenue and EBITDA growth across all segments, while Vishal Mega Mart, a franchiser of hypermarkets stores in India continued to report strong financial performance. The share price total return over the quarter mirrored the NAV growth at 3.6%, closing March at EUR 10.75 per share. The discount to NAV remained stable, keeping Princess in line with its peers. Portfolio activity was tilted to investments, with Princess adding Rosen and Velvet CARE to its portfolio. As already informed in the previous update call, Princess has made an additional commitment to Partners Group Direct Equity V Fund during the quarter, bringing the total commitments to EUR 50 million. In terms of distributions, these were predominantly received from its direct investments. And towards the end of the quarter, the realization activity kicked off with the IPO of Galderma and the non-sale of SRS Distribution. As far as the liquidity position is concerned, the cash balance was EUR 1.5 million with an undrawn credit facility of EUR 109.5 million. Now as a reminder to shareholders, Princess maintains a credit facility for short-term liquidity management purposes. Finally, post quarter end, Princess declared the first interim dividend of EUR 0.355 per share, which will be paid to shareholders on 17th of June. Over the quarter, Princess completed the previously announced acquisition of Rosen Group and Velvet CARE. While Rosen will be covered later in the presentation, I would like to mention a couple of words about Velvet CARE. Firstly, Partners Group has developed a rigorous thematic investing approach which involves years of focused research into long-term mega themes underpinned by strong secular growth. One such theme relates to the bifurcation between premium and value offerings in consumer markets, and the private labels growing role in the space. Now one might wonder what is private label? Well, private label refers to products that are produced by one company and subsequently branded and sold by another one. This allows the brand owner and retailer to offer products with their own branding and design without heavy investment in manufacturing. The segment benefits from several secular trends, including growing income and equality, leading to polarization of spend, growth of discount retailers and increased use of outsourced manufacturing by asset-light direct-to-consumer brands. At the same time, private label offerings are increasingly sophisticated in terms of value quality segmentation and are enjoying an overall positive shift in perception. Such an example is Velvet CARE. Headquartered in Poland, Velvet CARE is one of the largest independent manufacturers of branded and private label hygiene paper products in Central and Eastern Europe. Velvet CARE has a diversified product portfolio and a strong market position in its core markets. Moreover, it differentiates itself through superior production capabilities, best-in-class technology and deep relationships with retailers across multiple countries. Partners Group will work with management to build on the company's strong position and drive growth. Key value creation initiatives will include expanding international reach, broadening the product portfolio with a focus on high-growth categories and making targeted acquisitions. In terms of distributions, these were predominantly received from the direct investments. In particular, EUR 1.1 million stemmed from its preferred equity stake in Polyconcept on the back of strong free cash flow generation over recent quarters. By way of reminder, Polyconcept is a global supplier of multi-category promotional products, operating on 5 continents and selling in more than 100 countries. While EUR 1 million was received from its investment in Global Blue, a New York Stock Exchange listed provider of VAT refund and foreign exchange services for international travelers. This was the result of USD 100 million strategic equity investment from Internet and technology company, Tencent, and the refinancing of the company's debt also [ incurring ] in November last year. The remaining balance of EUR 3.1 million was predominantly received from the legacy portfolio and debt investments. With this, I would like to hand over to Cyrill to discuss our investment approach.

Thank you, Andreea. I would like to talk today quickly about Partners Group. And as you know, the Board of Princess realized that Princess is the only product listed at the London Stock Exchange who does not have the name of the manager in the name of the vehicle. Does the Board of Princess asked the Manager of Partners Group whether we are comfortable to insert our name, Partners Group in the name of the product. Of course, we said, yes. Thus, at the next AGM of Princess on the 21st of June, shareholders are asked to vote for or against changing the name from old Princess Private Equity Holding Limited to new Partners Group Private Equity Limited. That's how I thought it makes sense to quickly talk about Partners Group. So, Partners Group was founded in 1996 and today it manages $147 billion of assets under management with over 1,900 employees in 20 offices worldwide. By far, the largest asset class with $76 billion of AUM is private equity. The remainder is in private infrastructure, real estate and debt. Most of our clients are pension plans, and behind these pension plans are 200 million beneficiaries. That is why in the room where we make our investment decisions, which we call the decision room, we have a big banner over the large video conference screens stating we are responsible for dreams. We once interviewed our end clients, meaning the beneficiaries, and we made a media out of it and showed it to all of our employees. We interviewed 30, 40, 50-year-old teachers, firefighters, factory workers, nurses in hospitals, train drivers, bus drivers, you name it, and we asked them what their dreams are when they will retire. We realized the higher the return we achieve in our products, the more dreams our clients can fulfill when they retire. And we realized, we cannot take too high risks because these people absolutely cannot lose their pension. So that is why we decided at Partners Group to have a very prudent, very diligent, highly selective investment approach. For example, last year, we looked at 900 investment opportunities on the private equity direct side. But in the end, we only invested in 9 companies. So that's only 1% of the deal flow. This also means, we decided to broadly diversify our portfolio across vintages, industries, geographies and diversify also across many number of companies, investing typically only 1% to 2% of NAV in one single company. Federica will talk about more of this later. This investment philosophy also applies to Princess, which of course, also gets offered its fair share of pro rata allocation to all new private equity direct investments the PG platform is doing in any given quarter. So Princess shareholders are also pension plans, but many are not, but also the many wealth managers who hold Princess will appreciate their attitude of trying to achieve high returns, but at the lowest risk possible. Every asset manager has one [ side ] showing how good they are, and this is our version of it. Partners Group is a public company itself, and with [ $38 billion ] of assets with market CapEx, we're one of the largest private equity managers now in the world, currently #4 by market cap. But we're not just big. We also have a good track record. And of course, every year, we win many industry awards. But also, for example, [ Preqin ] study resulted in Partners Group [ buyout ] track record post-global financial crisis was the second best in the industry. 10 years ago, Princess portfolio was 80% [ fund-to-fund ] and only 20% private equity direct. So in the past, Princess could not fully actually profit from our track record. But going forward, Princess will focus purely on prior Partners Group private equity direct investments. Thus, the famous slogan in the disclaimer, past performance is no indication of future performance, I think is true here, because I truly believe the future performance will be better because of the focus on Partners Group private equity direct investments going forward, and because also lower fees because no double fee layer anymore on the [ fund-to-fund ] part like in the past. Now private equity means you buy a company for [ $1 billion ] and sell it 5 years later for [ $2 billion ] in what we call a 2x multiple, resulting in a 15% per annum return. If you're holding period is 8 years instead of 5 years, then you need even a 3x multiple to achieve a 15% per annum return. But how do we do this? Now first, you need to find the right company, so you need to have a differentiated thematic sourcing approach. This means, we deep dive into thematic research and identify high conviction sectors. I will talk about this more on the next slide. But doing our homework and performing the most thorough pre-buy due diligence you can possibly do, is not enough. Once you own the company, you need to create value, which we will call entrepreneurial ownership. Before I joined Partners Group 23 years ago and found the love of my life, meaning private equity, I had a short affair with management consulting at McKinsey, but my lesson learned then was, if your goal is to double or triple the enterprise value of a company in 5 years, this is not possible with just reducing the costs. You need to double or triple the revenues, which in turn will double your net profit. If you manage to increase your EBITDA margin and you -- some of the free cash flow you used to pay down some debt, you can even achieve a 3x multiple of the equity value. That is what we call transformational investing. So not just finding measures to achieve a 10% or 20% more EBITDA, no. This will be fine-tuning, but we want to double or triple EBITDA, and this is what we call transformational. Now on thematic sourcing, 20 years ago, a private equity manager who could just wait until their favorite investment banker gives them a call presenting the next private company which is for sale, and you source your next investment. But today, the industry has really changed. Today, sourcing of new investments is much more complicated. At Partners Group, we have 550 investment professionals which leverage their internal and external network expertise to analyze private markets and are trying to identify the best themes to invest. In private equity, we have specialists looking at health care, goods and products, technology and services. We call these our 4 verticals, within the deep dive in these verticals. So within the each vertical, you deep dive into themes like, for example, companies whose business model is to speed up the time to market in the pharmaceutical industry. But this is a multiyear process, so which means several years of preparation before the actual purchase of a company. Now let's have a look at an investment Partners Group as a platform has done in Q1, and thus, of course, also Princess got its fair pro rata share offered and invested as well. Our [ specialists ] in the services vertical started 4 years ago in 2020, looking at the theme called increasing quality and standards, and they identified a subtheme called testing, inspection and certification, in short, TIC. As typical for every subtheme analysis which we do, the investment team mapped out the top 20 companies active in this field and identified Rosen as an ideal match with our criteria, which means it has to be operating in resilient, growing markets with identifying regulatory scrutiny, clear sustainable technology leadership and strong data. Rosen was a founder-owned business, so it's not owned by -- previously by a private equity company. And whilst initially there was no appetite for the family to sell, our continued focus and persistence paid-off, and we signed the investment late last year. But what exactly is Rosen doing? So Rosen Group has 3,800 employees based in Switzerland, clients in over 120 countries all over the world, and they are the clear market leader in mission-critical inspection services for energy and infrastructure assets. So for example, they are using a so-called Smart Pig, which you see on the right-hand -- lower right side of the presentation. So this device is called Smart Pig, which is used to inspect oil and natural gas pipelines and in future hydrogen pipelines. They contain electromagnetic components such as ultrasonic sensors, radio frequency modules, gauge plate and they can measure parameters such as diameter of curvature, thickness of the metal, pressure, metal loss and temperature. In other words, they try to find a crack in a pipeline so that it can be repaired before the pipeline bursts. Now I have no clue about the pipeline inspection business, but in my free time, I'm a passionate private pilot and in the aviation industry we call this preventive maintenance, meaning, you don't wait until the part breaks and therefore, you repair or replace broken part, but instead, you try to anticipate issues and detect and repair problematic parts before they fail. Rosen Group's in-house manufacturing with over 90% of its technologies developed internally and 275 patents has positioned the company as a dominant player, holding 40% market share in North America and Europe, which makes it a clear #1 in its industry. The company's future growth is supported by long-term structural drivers. Pipelines currently serve as the backbone of energy transport in many countries and the aging asset base will require more and more maintenance and inspections. Additionally, with 80% of its revenues guaranteed through take-or-pay contracts, Rosen Group demonstrated a resilient business model, providing a high level of predictability for future cash flows. Just look at one key figure on this slide, 15 years average client tenure says it all. Our investment team has identified potential value creation through the mix shift towards a new technology called EMAT, which stands for Electro-Magnetic Acoustic Transducer, which is an ultrasonic testing technique. With imminent process readjustment, potential monetization of data, which actually belong to Rosen, so the data they inspect belong to Rosen, not the company which is actually paying Rosen to do the inspection, and the possibility to leverage on artificial intelligence and machine learning going forward. So with this, it's my pleasure to hand over to Federica, responsible Senior Portfolio Manager for Princess to talk about the portfolio.

Thank you, Cyrill, and good morning, everyone. I'm Federica Cazzaniga, Senior Portfolio Manager of Partners Group, and I'm responsible for the portfolio construction, implementation and management of Princess portfolio. It's a pleasure for me to be here today, and I will provide an update on Q1 2024 developments. Many of you will already be familiar with Princess portfolio composition, which is designed to reflect the company's goal, that is to provide access to a high-quality portfolio of direct private equity investment with broad sector and geographic diversification. With over 96% of the portfolio in direct private equity investment, Princess has now exposure to more than 70 individual companies operating across most economic sectors, yet with a tilt towards the foundational resilient industry, where Partners Group focuses its thematic research, as Cyrill just outlined. And these are mainly industrials, health care and consumer goods, with these 3 sectors representing now over 70% of the portfolio [ unhidden ]. There have been no changes in our top 10 portfolio companies during the first quarter of the year. These companies continue to represent just over 45% of NAV. From a portfolio construction standpoint, we tend to side investments at approximately 1% to 2% of portfolio in size at entry and any higher exposure, like the one you will see here for our top holdings, is the result of performance that compounds growth, resulting in higher NAV share for these assets. It is, for example, the case of PCI Pharma and SRS Distribution where our investment has grown 5-fold during our ownership period. Another way to look at portfolio composition is through the length of vintage year exposure. This is not only a way to spread risks across macro and market environment, but also a key driver of portfolio liquidity that ultimately underpins portfolio performance over time. As you can see from the pie chart here, the portfolio comprises a very well-balanced and attractive mix of more mature assets as well as companies that are in their prime value creation phase. Approximately 50% of NAV was invested before 2019, and this now represents the part of the portfolio which is closest to its realization phase. These are mostly companies that we have been proactively positioned for exit or even partially realized, like it's the case for PCI Pharma and again, SRS Distribution. Not less important is, however, the other half of the portfolio here on the left-hand side of the pie chart. These are younger assets where we are all hands on deck in our value creation journey. You will see a few examples here, and some of them we've already covered in previous update calls. But one I would briefly highlight is SureWerx, a manufacturer of technical safety gear, tools and equipment that improve workers' safety, productivity and well-being. We invested in the company in December 2022, and during the first 12 months of our ownership, Partners Group has already been working very closely with both management and the Board, focusing on the company's e-commerce capabilities as well as the data-driven approach to increase cross-selling effectiveness and other several operational and supply chain optimization measures. And our work with SureWerx is already playing out with double-digit 2023 EBITDA growth and further margin improvements to over 25% for this company. This is, of course, just one example, but it is [ arguably ] representative of the value we are creating within the portfolio more broadly. And if we turn to the next slide, here, we have a snapshot of the portfolio NAV broken down by the TVPI marks, so our money multiple, which can be seen effectively as a proxy of our value creation initiative and entrepreneurial ownership being reflected in company's values as it is today. First and foremost, I'm pleased to report that the vast majority of our portfolio had strong fundamental growth and over 90% of NAV is currently marked above 1. In fact, the weighted average multiple across the portfolio is even over [ 2x ], which is, again, as Cyrill mentioned earlier, our guiding line in terms of what we aim to do, doubling our -- at least doubling our invested money during ownership. And if we exclude assets whose performance is too early to be assessed, so most recent investments, almost 50% of portfolio NAV is outperforming our base case underwriting plan at the entry, and a further 45% are fully on plan with less than 5% of Princess NAV falling below our initial expectations. It is also worth noting that our underperforming assets represent a limited set of portfolio investments, where negative news has been largely reflected already in the valuation [ marks ], and we do not see these companies significantly impacted performance going forward. Indeed, if we exclude the limited number of companies currently marked below 0.5% instead of 1% of asset NAV, you see here on the left-hand side of the chart, we noticed a clear correlation between the holding period of our assets and their valuation mark, suggested that Partners Group continues to compound growth throughout the holding period all the way through realization. In summary, we take the solid Q1 2024 performance of the portfolio as an encouraging sign of more positive news to come, with good momentum on the exit side, as I will touch on later, that validate our valuation marks, suggesting potential buyers to see at least as much value in our assets as what we see today ourselves. Before moving on to an exit update, it is perhaps worth spending a minute on financing markets. Indeed, higher costs and lower availability of that financing has been one of the drivers of lower transaction volume in the market over the past 18 months. In a time of suppressed investment and exit activity, we have spent time to focus not only on thematic research and on value creation, but also on proactively strengthening the capital structure and resilience of our company so that they can best continue to weather capital market challenges as well as being attractively positioned for exits on the line. This slide here shows a snapshot of the private equity portfolio of Partners Group direct platform, which is a broad reflection of Princess portfolio itself. And as you can see, despite tight financing markets, our teams have been actively managing the maturity profile of our company's debt, refinancing and extending maturities whereby now over 70% of our debt matures beyond 2028. Not only that, but almost 90% of our company's financing is covenant light. And also, we are well hedged in terms of interest rate exposure, and we are now 65% hedged in terms of our interest rate exposure at the portfolio level. Our portfolio is so well positioned in terms of capital structure, also means that our capital market team can spend time assisting the investment teams on new transactions to develop financing solution for new opportunities that we look at. And Rosen is a clear example of this, where we arranged total debt package in excess of $1.5 billion across the term loan and a revolving credit facility. In particular, the term loan saw a strong demand from banking counterparties, resulting in very borrower-friendly terms, but also in a margin that tightened to levels that we have not seen in months, effectively pricing at 350 basis points margin, 75 basis points below our underwriting case, representing over $70 million savings for the company in its initial financing. The strong capital structure is also critical to make our assets attractive to new buyers. And the proof is in the pudding. In the case of Civica as a portfolio company, is a global leader in public sector software, whose exit was signed in Q4 2023 after we refinanced over GBP 1 billion debt by working with a large group of direct lenders to create momentum and be able to drive terms. In the systems, we addressed the upcoming 2024 debt maturity with a covenant-lite unitranche, but we also secured a large unfunded acquisition facility to allow for continued M&A activity. But most importantly, we had made a structure fully portable, meaning that the new acquiror, in this case, [indiscernible] could retain the financing. So in an environment where financing its [ cars ], it provides certainty on terms and facilitates exit processes. And talking about exit, on the following slide I prepared a full breakdown of fully realized private equity direct exits within Princess portfolio since inception, where Partners Group was the majority lead investor. And if you compare this chart to the bar chart I showed just a couple of slides back, you will note in the distribution here is skewed towards higher outcomes, and this is exactly what we want to see when looking at realized exit, so higher money multiple upon realization. In particular, 85% of our realized deficits were above the sort of symbolic [ 2 x ] multiple that we set ourselves to achieve. And the realized investment weighted money multiple was well in excess of [ 3 x]. And while we are very well aware that past performance does not ensure future results, our historic contract record is a testament to Partners Group ability to create value over cycles, but also to realize it when the time is right. And today, we are confident in the high quality of our portfolio companies, their operational and financial strength, and also resilient, just as we've shown before, and this makes them very appealing to potential buyers. Our confidence is also further strengthened by the positive momentum we've seen over the past 12 months, where we have realized either partial monetization or full exits for a number of our portfolio companies. Liquidity events like partial realizations and dividend recaps have been supporting portfolio liquidity with smaller but regular cash flows, while the sales of Hofmann and Civica returned to 3% of portfolio NAV over the past 6 months. Further, during the first quarter of 2024, we announced exits of 2 of Princess' largest holdings, Galderma and SRS Distribution, which together accounted for approximately 9% of Princess' NAV. So let's spend a moment to look at these 2 companies together, their story, but also what their exit means for Princess. Galderma is a recognized global leader in the dermatology space which was formed from the carve-out of Nestle's Pharmaceutical business in 2019. Partners Group had done significant thematic research on the derma market in previous years and invested at the time of the carve-out. Over the past 4 years, the company delivered strong revenue and EBITDA growth of approximately 10% per annum, and continued to grow its market share through product innovation, geographic expansion, channel optimization and leveraging portfolio synergies. Last year in 2023, Partners Group made an add-on commitment to Galderma, which used the additional capital to deleverage and optimize its capital structure, again, creating more opportunity to invest in growth, but also position [indiscernible]. The company's IPO was announced in March 2024 and priced at the top end of the range. [ Stock ] broadly 20% on its first day of trading with a closing price fully aligned with Partners Group latest valuation. Princess will gradually sell down its position over time together with Partners Group and no meaningful cash flows have been received to-date on these exits. However, market pricing as well as current trading further confirm the quality of the asset and also cement our fair valuation approach. The other company we exited this quarter was SRS Distribution, and other assets that grew significantly during our holding period, which started in 2018 when we first invested in what's one of the largest distributor of roofing products, landscaping and full supply product serving, the [ UNI ] stage. SRS has materially outperformed our original investment case and it's a combination of both organic and inorganic growth, supported by margin improvement. The company was acquired by Home Depot for over $18 billion in March 2023, representing a premium of over 30% to our latest valuation mark, and a multiple of money in excess of [ 5 x]. Princess already received distributions from SRS in an amount close to its original investment, also thanks to the partial sale announced in December 2023. The full sale to Home Depot is expected to be concluded by the end of 2024, with Princess receiving approximately EUR 70 million additionally upon completion. We have here 2 very different companies operating in different market segments and sectors with different exit routes, yet they both share a common denominator of proven market leadership and undisputed quality and outperformance that are reflected in the successful exit outcomes that we realized for Princess. As headline grabbing as these 2 processes might be, we should not overlook the significant potential that remains within Princess portfolio as of today. As I mentioned, the portfolio comprised a meaningful number of companies that are both mature and also well performing. These are fundamentally healthy companies where we have continued to compound growth and prepare for exit. I've included here just a few examples where exit processes are well underway, that in aggregate represent approximately 10% of Princess portfolio NAV as of the end of March. A few more processes have also been initiated whereby we expect portfolio realization to gradually revert back to the historical average levels of 15% to 20% NAV per annum. Now rather than focusing on each of the 4 specific companies that I've listed here, I would like to draw your attention to [ point ]. The first one is the consistency of operational growth that we've achieved for these companies in a relatively challenging macroenvironment where these companies have continued to grow a double-digit EBITDA rate. But also the second point is the diversity of our asset pipeline, which spans across sectors, region, exit types, where IPO is perhaps the preferred exit option for a larger, more mature company and trade sale might be the best option, for example, our veterinary clinic platform in this case. We continue to weigh all exit options, depending on size, type and maturity of businesses. I'm aiming to find the right owner to continue the company's success, but also the one that provides the best possible outcome to our investors, continue to realize positive performance at the portfolio level. I will now hand over to Andreea to summarize our discussion today, before we open it up for audience questions.

Thank you, Federica. Now before we move on to the Q&A, I'd like to leave you with the following key points. First of all, Princess provides shareholders with exposure to Partners Group direct private equity investment strategy, participating in transactions alongside some of the world's largest institutional investors. Partners Group is a thematic investor focusing on investments in companies where growth is underpinned by long-term transformative trends. We bring extensive resources with a global team of over 200 investment professionals supported by a global network of external industry advisors and operating directors. Princess portfolio demonstrates diversification, providing investors exposure to companies operating in a variety of industries and jurisdictions. We have built the portfolio over time, and we've done so prudently, achieving a very good vintage diversification. We have an attractive mix of mature assets, but also assets that are newer in value creation stage and that keeps a sustainable performance of our cycles. From an investment perspective, we continue to focus on the disciplined deployment of capital and the identification of companies where we believe we can support management to create value. And recent exit news, such as the IPO of Galderma and the announced sale of SRS Distribution, they show exit activities picking up and that our valuation policy is validated. We believe that the current discount of almost 27% offers value, providing exposure to a well-diversified global private equity portfolio that continues to generate positive NAV performance. Finally, the company's investment objective is to generate long-term capital growth and an attractive dividend yield, and it has achieved double-digit NAV and share price total return performance over the last decade. Now before we start with the Q&A, I would like to remind shareholders that Princess has published on the website a notice of AGM, which will take place on 21st of June. Information about the resolutions is also mentioned in the appendix of the presentation. Now of course, shall you require any clarification regarding the resolutions, please do not hesitate to contact us. With this, let's move on to the Q&A.

I see we already received a number of questions on the webcast, and I think we already have a question for you, Cyrill. This is regarding the MSCI total return over 3 years, which is up 39% versus 14% for Princess. Do you expect to catch up to happen more from valuation multiples in the underlying companies?

Yes. To be honest, before the global financial crisis, actually, if you look at the Princess's monthly reports, we did not even have a comparable index next to the NAV. You just had a NAV development. And then after the global financial crisis, then we started to say, hey, honestly, yes, during the last 5 years, looking back to the global financial crisis, performance was not great, but at least it was better than the public markets. That is when we introduced the MSCI World. Now actually that MSCI World is so much triggered by the Magnificent Seven, as you may call, especially the last 6 months, we are actually even in the Board discussed whether we should actually change the index. So if you look at MSCI World small caps, for example, they have much less performed the last 6 months. In the MSCI World small cap, I think with an end price value of $1 billion is more comparable to our $1 billion kind of enterprise values. If you look at Tesla, it's like $500 billion or so, 500 times bigger than what we do. And so, I'm not sure whether MSCI World is really a good index. So keep us posted -- we will actually think of whether another benchmark will be better. So it's not a benchmark anyhow, it's a comparable index, but I think this is now triggered by a lot of technology and a lot of hope, especially in the U.S., but as our portfolio is much more diversified, for example, if there's a biotechnology bubble, we don't have a big exposure to biotechnology and then profit from that. And if there is a technology bubble, we also don't have a huge technology exposure, don't profit from that. It's much more -- our focus is on industrial companies in Europe and in U.S.A., in that point of view, much more boring, much more stable. So no, I don't think that we will catch up from that very strong development of MSCI World, the last 6 months [ 3 ] could [ buy ] the Magnificent Seven.