Perpetual Limited (PPT) Earnings Call Transcript & Summary

Good morning, everyone. My name is Emma Rumble, and I'm the General Manager of Corporate Affairs and Investor Relations at Perpetual. Today, we are very pleased to welcome you to the Perpetual Annual Investor Day. Today's event is a virtual event, and we will be joined by speakers in both Sydney, Australia and the United States. I would like to acknowledge the traditional owners and custodians of the land on which we meet today here in Sydney, the Gadigal People of the Eora Nation, and recognize their continuing connection to land, water and community. I pay my respects to them, their culture and to their elders past, present and emerging. In terms of the agenda for today's event, we will shortly hear from our Chief Executive Officer, Rob Adams; and Chief Financial Officer, Chris Green, who will provide an update on Perpetual's strategy and key financial information. Then joining us live from the U.S., we will hear from our Trillium Asset management team and our Barrow Hanley team, who will provide an overview about each business, their strategy and key areas of focus. Our final session today, we will be joined by David Lane, Group Executive, Perpetual Asset Management, International; Adam Quaife, Head of Global Distribution; and Chuck Thompson, Head of Distribution and Strategy for the Americas. They will provide an update on our U.S. and global distribution progress and plans. There will be an opportunity for questions for any of our presenters today at the end of the session. This session will be facilitated by our newest group executive, Amanda Gillespie, who is Group Executive of Perpetual Asset Management, Australia. [Operator Instructions] And with that, I'd like to now introduce our Chief Executive Officer and Managing Director, Mr. Rob Adams.

Well, thanks very much, Emma, and welcome, everybody. Thank you so much for joining us either this morning or this evening, wherever you may be. Well, 2020 has been a busy and fast-changing year. There's been plenty happening across the business. Of course, COVID-19 has impacted us all in a range of different ways. And here at Perpetual, of course, we have been busy, too, with the acquisitions of both Trillium and of Barrow Hanley. I'd like to now turn to our strategy. You've seen this slide before. This slide outlines Perpetual's strategic focus over the next 4 years. As you are aware, you would recall from when we first presented this slide about 12 months ago, at Perpetual, there are 3 core pillars to our strategy: client first, future fit and new horizons. So 1 year on, what progress have we made at Perpetual? Well, I'm pleased to report it has been a strong year of positive execution of our strategy across all lines of business and across our 3 core strategic pillars. Briefly running through in relation to our client first pillar. Through the Barrow Hanley and Trillium acquisitions, we now have 25 new investment strategies or capabilities, which we, today, of course, showcasing. We're delighted today to be introducing you to the CEO of Barrow Hanley, Cory Martin; the CEO of Trillium, Matt Patsky; and some of their senior team members as they take you through the business and their core capabilities. So that's obviously been a very significant thing in terms of our client first pillar. We have seen either continued good investment performance or improving performance this financial year across our book of business. In Perpetual Private, we've, of course, seen strong growth in new advisers as we've taken advantage of the dislocation in advice here in the Australian marketplace. And in Perpetual Corporate Trust, we have continued to deliver new products, new services, innovating all the time, on the back of our amazingly strong client relationships across Perpetual Corporate Trust. And as a whole across Perpetual, in a tough year, in a difficult year with COVID-19, our NPS, our Net Promoter Score has actually improved materially over the course of the year. In relation to the future fit pillar, we, as you know, implemented a new operating model across Perpetual. We were fortunate in many ways to have implemented the majority of those changes ahead of the impact of COVID-19, which better positioned us to deal with the challenges associated with COVID-19. And of course, with the Barrow Hanley transaction completed as at 30th of June, and just 3 weeks ago announcing the completion of our acquisition of Barrow Hanley, we have started the work of globalization of our management oversight and governance framework, and started to transform our technology across the business as our footprint broadens. In relation to the new horizons pillar, well, of course, Barrow Hanley and Trillium are magnificent new horizons for us as a firm. Concurrent with the announcement of the intention to acquire Trillium, we talked about our desire to build up our U.S. distribution presence under Chuck Thompson, who you will hear from later today. That work has continued. In Australia, we've launched new funds on behalf of Trillium, 2 new funds, which are performing exceptionally well since they kicked off in early August. And for Perpetual as a whole, as we look forward, these new transactions provide us with significant future capacity for growth. So in many ways, Perpetual is a different business now with materially improved growth prospects across the business. Moving to the next slide now. As you know, Perpetual has been a diversified business for many years. Prior to the Barrow Hanley and Trillium transactions, we were well diversified across Perpetual Investments, Perpetual Corporate Trust and Perpetual Private. After these important transactions, we now have greater diversity at Perpetual. We have greater diversity by business line; we have greater diversity by geography; greater diversity by asset sector; and importantly, greater diversity by client channel. And you'll hear more about that over the course of the next hour or so. So through these transactions, and as mentioned, Perpetual now has a far broader array of positive future growth opportunities. And to manage those opportunities, we now have the right executive committee in place. I'm thrilled to -- I was thrilled just recently to announce the appointment of Amanda Gillespie, as Emma touched on just now, as our Group Executive for Perpetual Asset Management, Australia. Amanda Gillespie has been with Perpetual for over 2 years. Prior to being at Perpetual, she was CEO of Lonsec, the important Australian research house, and over the last 15 months, has worked very closely with me as I dual-headed as Chief Executive whilst also overseeing Perpetual Investments. So she's ideally placed to manage that business going forward. You'll also recall that earlier in the year, back in March, post our operating model review, that Amanda Gazal joined us in the newly created role of Chief Operating Officer. You'll again recall that the centerpiece of our operating model review was a unification of our operations, technology and product functions across our 3 businesses at the time, with an aim to drive positive transformation, to drive further efficiencies across our business and to put us in a better position to be more scalable into the future. And Amanda has now been with us for several months and is starting to tick all those boxes importantly. And so with the most recent Amanda appointment, Amanda Gillespie, our executive committee is now set. And I'm really thrilled with the balance that we have, the blend of experience and a very clear shared ambition regarding the future for Perpetual. And this is, of course, a key part of our foundations for future growth. Those foundations are strong across each of our 4 divisions now. You'll recall that we have renamed Perpetual Investments to Perpetual Asset Management, and now have 2 separate business units: Perpetual Asset Management, Australia, which is overseen by Amanda Gillespie; and Perpetual Asset Management, International, which is overseen by David Lane, who you'll hear from later today. In terms of the foundations for future growth, we are very positive about our opportunities across each line of business. In Perpetual Asset Management, Australia, our credit and fixed income teams have performed incredibly well, again, through very difficult market conditions. We've seen solid growth from that business in recent years, and we are very full in our expectation that will continue. In the nearer term, particularly since the 1st of July, our new financial year, our Australian equities performance has improved materially, which is, of course, in many ways, a relief to see this long run of growth winning out over value possibly come to an end. And the great news is that by sticking to their knitting, doing what they know best, our strategy and equities team are now delivering across all of their capabilities. We see great potential for our multi-asset business, which again has won several industry awards in that important sector with our performance through this difficult volatile time ticking the boxes in terms of its objectives. And of course, in Australia, we will be distributing the very best capabilities of both Trillium and Barrow Hanley, having launched those 2 new Trillium funds back in August. For Perpetual Asset Management, International, this is obviously now a key part of Perpetual and a very material component not only of our revenues and net profitability going forward but also in terms of our growth potential. We have world-class capabilities across critical asset sectors that are in demand, and we have significant capacity through all of those capabilities that you'll hear about more today. In Perpetual Corporate Trust, as I mentioned, continued leadership and growth across all lines of business. Our market position is very solid. Our client relationships are unmatched. And through those unmatched client relationships, we are delivering more innovative products and services, and we remain very positive about the future-looking prospects for PCT. In relation to Perpetual Private, we have a proven advice model that I have described in the past as being a honeypot for the industry's best financial advisers. And we showed that through the growth in adviser numbers in the last 12 months, and we are full in our expectation that honeypot will continue to be just that. But of course, today's focus is on Trillium and Barrow Hanley. We believe that both of these transactions are compelling partnerships, and we regard them very much as partnerships, where our approach to our oversight of these 2 transactions is that we love the people, the process, the performance and the potential of these businesses. And our job is to help them continue to do those things and do them more broadly as we build out our global distribution services. They are bringing to Perpetual truly world-class investment capabilities that are relevant to both retail and institutional investors globally. Significant capacity for future growth, as I've said a number of times. These capabilities are entirely relevant to Australian retail and institutional investors, just as they are in other key markets. We see that we have real alignment with the Trillium and the Barrow Hanley teams regarding our future partnership as we build out those global distribution capabilities. Now I think moving on to the next slide, if it will come up. There we go. I thought it might be useful to provide an updated snapshot in relation to our investment performance. The numbers that I'll take you through briefly now. I won't rest on these, but for you to study afterwards, the most recent numbers that we're able to publish at this juncture. Barrow Hanley, as you know, is a proven value manager with more than 40 years of investment management experience. Similar to Perpetual's value teams, have seen a significant uplift in their relative performance in recent months. As you'll see by the light blue boxes appearing in the shorter time frame. Yes, we'll also see over time, as we drop off poor months and add strong months that positive impact over the medium to longer term can roll out quite quickly. For Trillium, continued exceptional performance across all key strategies. We've seen that right at the pointy end, if you like, in the launch of these 2 Australian vehicles which have performed, I think, in the order of 350 and 550 basis points in excess of index since that time. And their global equities' capability, a terrific performance overall time frames. And as I alluded to earlier, for our Australian Asset Management business, our Australian equities teams generating material alpha since the 1st of July, which is very pleasing to see. Credit and fixed income, continuing their strong performance just as is our multi-asset sector. So that's it for me. You didn't come -- we strongly believe you didn't come to hear more from me nor from Chris. But Chris will give you a brief update in relation to financials and our dividend policy. I really hope you enjoy today's session. And look forward to your questions at the end. Thank you.

Thanks, Rob, and good morning, everyone. Firstly, I'd like to reaffirm the cost guidance we provided at the time we announced Barrow Hanley. We expect underlying expenses to reduce by 2% to 4% on FY '20 as a result of the full year benefits we're seeing from the operating model review, partially offset by continued investment and growth initiatives across the group. The impact of 6 weeks of Barrow Hanley, 6 months of Trillium and the impact of the continued buildout of the global distribution team will add 27% to 29% to expenses we had in FY '20. As previously flagged, the Barrow Hanley acquisition has resulted in a change to our definition of UPAT, and a revised dividend setting, and I'll turn to that now. Firstly, we've revised the definition of UPAT to reflect changes in the group's operating cash flows from both existing, but also to take into consideration future inorganic activity. As a result, NPAT will be adjusted for 4 types of significant items: firstly, material items that don't reflect normal operating activities; secondly, noncash tax-affected amortization of acquired intangibles; thirdly, tax-affected unrealized gains and losses on financial assets, which many of you will be aware that over the last couple of years has added volatility to our earnings and dividends; and finally, the tax-affected fair value movements on the liability associated with the 25% of Barrow Hanley currently owned by employees. In terms of future dividends, they will be paid with reference to that new UPAT definition, and that will be paid on a range of 60% to 90% of UPAT. As previously flagged, this new policy has been designed to strike a balance between maximizing returns to shareholders, retaining cash to fund operations and pay down debt as well as retaining sufficient cash to absorb periods of financial stress going forward. Importantly, dividends beyond FY '21 may not be fully franked, given a significant amount of our earnings are now derived offshore. And are subject to foreign tax requirements. In relation to acquisition metrics, we are paying 293 -- we have paid USD 293 million to BrightSphere, with 87% of clients having consented to the deal at the time of closing. When the consent period closes in 150 days post closing, total consideration will not exceed USD 319 million. The deal was funded by a combination of the proceeds of the AUD 225 million placement; the upsized $50 million SPP; a new USD 195 million debt facility for acquisition purposes; as well as from available cash. Importantly, we have a pathway to pay down that acquisition debt to 0 over 5 years. And finally, transaction costs, integration costs and the amortization of that acquired intangibles will be treated as significant items and are expected to be in a range of $60 million to $66 million post tax. With that, I'll now introduce you to our next speaker, Matt Patsky, the CEO of Trillium Asset Management. Matt first joined Trillium in 2009, and has over 30 years experience in investment research and investment management. He began his career at Lehman Brothers in 1984 as a technology analyst. In 1989, while covering emerging market growth companies for Lehman, he began to incorporate environmental, social and governance factors into his research. And he became the first sell-side analyst in the U.S. to publish on the topic of socially responsible investing in 1994. He also held senior roles at Harkness & Hill as well as Winslow Asset Management in Boston. And with that, I'll hand over to Matt.

Good morning. I appreciate the opportunity to present to you today. I am joined today with both Cheryl Smith, our Chief Economist; and John Quealy, our Chief Investment Officer, and I'm thrilled to be with you. The -- just to start, I want to just point out that Trillium joined the Perpetual family on June 30, and we've been very excited about the effort that we've seen Perpetual make to bring -- to fulfill what the -- what we were looking for with this deal, which was to bring our strategies global and to take what we've been doing and sort of start to have global impact. And so we'll talk about that further. But the build-out of the distribution in North America has been faster than we could have ever expected. Likewise, we're already seeing activity of inquiries from Europe. And we've been doing -- seeing incredible opportunities in Australia and have launched already 2 strategies in Australia, but just off to an incredible start. Given the challenge of COVID, this has been remarkable how quickly everything has been happening. Just to start, I want to talk about the -- give you a little history of Trillium. The organization was founded in 1982. And the beauty of the founding -- Joan Bavaria, who was the founder, was she understood the materiality of environmental, social and governance information basically in addition to fundamental financial information and founded the firm with the objective of providing for the financial needs of our clients while leveraging their capital for positive social and environmental impact and alignment with their values. And we'll get into more detail about what we mean by that. But she was a very early adopter of what we're now seeing going mainstream, which is looking at environmental, social and governance data as being very material, and very important in terms of risk mitigation in the investment process. She believed that would -- that this would go mainstream and try to build the infrastructure to allow it to go mainstream with the co-founding of the Social Investment Forum back in the early '80s. It was incubated in our office space. They were in our offices for their first 4 years. Social Investment Forum is now US SIF and helped spawn organizations around the globe, including, of course, in Australia, they're Responsible Investment Association of Australasia. So I'm going to now introduce you to our Chief Advocacy Officer, Jonas Kron. And the initiative that we led for 11 years with our -- one of our largest clients, the Oneida Nation of Wisconsin, which is one of the first peoples of the Americas. This initiative, again, was 11 years for us, but 25 years for the Oneida Nation and was concluded successfully after that lengthy 25 years. But I wanted to just simply introduce Jonas Kron now via video.

Trillium's commitment to engaging the companies that we invest in on behalf of our clients, it's always been part of our DNA. Our job day in, day out is to engage the companies that we hold in our portfolios to try to get them, to persuade them, cajole them to become better ESG performers.

Trillium has been one of our long-time asset managers. That relationship goes back decades as well. The Oneida Nation is a Native American tribe. We're located just outside of Green Bay, Wisconsin, and we have a little over 17,000 members right now.

In 2009, Susan White, who was the Director of the Oneida Trust, came to us with her concerns about the Washington football team name and why she and many Native Americans around the country thought it was a racist name.

Unfortunately, she passed away far too early back in 2018. And that's when my time with the Oneida Trust began.

One of the key levers that Trillium and Oneida and other investors that were involved found was that the Washington football team, while it was a privately held company, it had sponsors, it had relationships with all sorts of businesses that the Oneida Trust was a shareholder of. And that was a leverage point that we could take advantage of to try to drive a name change.

And we were able to ask them to consider their sponsorship practices in terms of do you want to support the name and logo as it stands today.

We would have meetings with the companies. We would file letters with the companies from a long list of investors. And we did that from 2009, 2010, 2011, all the way through. It was a slow process that didn't yield the ultimate result that we wanted right away. But what it did do was it primed the pump. So in 2020, with the murder of George Floyd in late May, there was a renewed emphasis throughout the country on racial justice issues.

It was a very fast movement of events there. I think we sent out the letters to FedEx and Pepsi and Nike. It was picked up by the national media within a week.

And then it happened all at once. And all of a sudden, the whole thing fell apart. [Presentation]

When I heard the name was being dropped, it was a sense of an amazement, and finally.

There were countless occasions to be frustrated. But we're deeply committed to these issues, and we're not going to let challenges deter us or stop us from working hard for our clients and for the issues that are important to them bring them to reality.

So thank you. That -- I think that helps explain why I'm excited to get up and go to work every day. We are working on a number of issues. This was certainly one of the longer campaigns we've had. We've had many successes. We'll get into a couple more during the next -- during Cheryl's part of the talk, but it is what differentiates us is what I really want to talk about now, what makes us different. And so the -- we are certainly an early player in looking at environmental, social and governance factors and the materiality that is in that information in terms of risk mitigation and in terms of trying to look for more positive characteristics in the portfolio. It's obviously becoming more mainstream, we're seeing most major asset managers look at incorporating environmental, social and governance data. What makes us different is that we've been doing it for almost 4 decades, and that we've also been focused on investing in positive environment, social and governance characteristics as opposed to just exclusionary. In addition, we talk about active ownership. And in active ownership, we are talking about engaging corporates that we have invested in, in changing behavior and improving their environmental, social and governance profile. And that process also leads us occasionally to filing shareholder resolutions, and we'll talk about that briefly. In addition, we're very active on public policy. And so you will see us talking to municipal, state, federal government. We're also talking to stock exchanges. We're trying to create the condition, the policies that are supportive, sustainable and responsible investing globally. So in terms of what do we mean by active ownership and what are we talking about with corporate engagement, I just want to sort of talk briefly about that. Our efforts can be directly with corporates with -- in partnership with NGOs. And it could be a letter writing campaign. It might be ourselves going direct to the senior management to ask for positive environmental, social, governance changes that we think are going to translate into better performance for the company long term. Most of it's -- of our engagements now lead to successful changes. In 2019, we had 350 engagements with companies and, in most cases, there was a positive action. We had -- we use the shareholder resolution as a tool when we have failed in reaching agreement through dialogue, and that is really to raise awareness both with the public, media, shareholders broadly, the companies, its employee base and its Board. We often find that just simply the active filing that shareholder resolution does bring about positive resolution. And last year, just as an example, half of the shareholder resolutions we've filed, the company came back to us and said, we'd like you to withdraw it. We agree that it's a reasonable request, and we're going to implement what you've suggested. So increasingly, you're also seeing that when we do go to a shareholder vote, that we're getting higher and higher votes. And so we're starting to get into the 40s and 50s sometimes on the first ballot on some of our efforts. And that's because there's a growing understanding that these issues do matter for long-term performance. So in addition, obviously, we have a very focused proxy voting policy that is around, again, supporting the increasing -- the better environment for sustainable and responsible investing broadly. I'm now going to turn it over to Cheryl Smith, who is our Chief Economist and Portfolio Manager of our large-cap core strategy. Cheryl actually started with Trillium back in 1987 and is one of the early architects of our integrated ESG approach. With that, I'd like to turn it over to Cheryl.

Thank you, Matt, and good morning. I am pleased to present a case study describing Trillium's integrated investment approach in the context of our U.S. large-cap core strategy. Our investment philosophy has 3 pillars: We combine fundamental integrated ESG analysis from our dedicated team of highly qualified portfolio managers and research analysts, combined with our proprietary review and analysis of material environmental, social and governance factors. To do this, we combine multiple sources of ESG data with our own internal research on key performance indicators and insights. The process is designed to uncover investment potential and provide insight to portfolio managers, this analysis is conducted on an industry-by-industry basis because what is material vary significantly from sector to sector and from industry to industry. In addition to this, we add our shareholder advocacy, as was shown in the video of Jonas Kron on the name change for the Washington football team, and as discussed by Matt. And I will also discuss a history of our advocacy with Starbucks, which has been a long-term large-cap core holding. So turning next to an overview of the large-cap core strategy at Trillium Asset Management. This strategy was started 28 years ago in 1992, and I've been on the strategy for the past 23 years, since 1997. It is designed as a central building block of a client's U.S. dollar-based equity portfolio. The eligible assets for the portfolio are U.S. equities and American depository receipts. And these are large companies with an average market capitalization of USD 372 billion. Our core positioning has a slight emphasis on growth with higher profitability and high-quality companies but keeping the reasonable valuations. It is diversified by design covering a broad range of economic sectors. Together with my co-Portfolio Manager, Elizabeth Levy, we have over 50 years experience combined exclusively in the sustainable investment field. Our process is collaborative, but the final call is made by me as the lead portfolio manager with 65 to 80 names in the portfolio. Turning to our strategy construction or how the portfolio is put together. This is a risk-controlled strategy, and we target tracking error of 3% to 4% versus our S&P 500 benchmark. We have an active share of about 70%, a sector deviation of 5% or less. We use optimization software to manage our desired characteristics and factor exposures, and use scenario analysis to review our exposures to a variety of economic and market outcomes. Maximum initial position size is 5% or less, and turnover is limited to 20% to 40%. The snapshot as of September 30, 2020, for the large-cap core shows that there are active sector allocations but they are within constrained limits. Overall, as you can see from the characteristics at the right, this is a growth at a reasonable price footprint. And our top 10 companies shown on the bottom left recently emphasized the achievable steady growth found in technology companies, payments processors and well positioned consumer companies, Target and Nike. And then as I mentioned, I'd like to take you through an example of our engagement with Starbucks. This is a very long-term holding in our large-cap core strategy since 1997. It is a solid growth company with an attractive consumer brand, which benefits from its profile as a company with a conscience, even though it is based on a very ecologically sensitive commodity, coffee. Trillium is engaged with Starbucks on numerous issues over the past 20 years using multiple tools from our shareholder advocacy toolkit. Using direct engagement, we started in 2001 making the argument to Starbucks that it is important for them to keep a strong, healthy, desirable consumer profile. We argued that phasing out genetically modified organisms, even though not required under U.S. law, would strengthen their brand, and Starbucks agreed to do so in 2007. Working in coalition with other stakeholders, we encouraged Starbucks to release an annual corporate social responsibility report, with specific quantitative targets, which it began to do in 2004, which made it an early adopter among U.S. corporations and unusual in its specific quantitative targets. We also worked in coalition to encourage Starbucks in 2007 to end a long-running trademark dispute and to give greater control to its Ethiopian coffee farmer partners. Thinking about the shareholder resolution tool, we did a shareholder resolution with Starbucks after numerous attempts to get them to release the data. We did a shareholder resolution in 2017, which received 37 -- excuse me, 34% of the vote. The company responded with detailed information on gender and minority status for all employees by 2018. Again, putting Starbucks in the category of a leader among U.S. corporations in the release of this data. We also did a shareholder resolution with them on sustainable packaging and plastics use in 2019, which received 44.5% of the vote. This asks the company to assess its progress on recycling programs. So you can see that we've had this long history of engagement with Starbucks. And at each opportunity, we feel that we've improved the business prospects of the company, and it has indeed been an excellent company over this time period for our strategy. Now as I mentioned, our research process includes a proprietary materiality review based on our own analysis. And we don't use MSCI Ratings to manage our strategies. But for comparison purposes, I'd like to give you a sense of how the companies in our large-cap core strategy stacked up against MSCI ratings for the S&P 500 as of September 30, 2020. The Trillium strategy, shown in green, has 21% more companies in the top 3 categories of AAA, AA and A, while the S&P 500 benchmark shown in turquoise, has 20% more of its companies in the bottom 4 categories of BBB, BB, B and CCC. And finally, on performance. Our performance record shows our ability to generate strong, competitive risk-adjusted returns through good markets and bad markets. The fund version of our large-cap core strategy offered by Manulife subsidiary, John Hancock, as the John Hancock ESG large-cap core strategy is currently rated 5 stars by Morningstar with a 5 globe sustainability rating. And now I'd like to turn the presentation over to Trillium's Chief Investment Officer, John Quealy, for more discussion on Trillium's team, our structure and our strategy offerings. Thank you so much.

Thanks, Cheryl. Good morning, everybody. It's a pleasure to be with you, albeit remotely, today. So I am John Quealy, Chief Investment Officer here at Trillium Asset Management. And over the next 7 to 8 minutes, I hope to provide you with an overview of our team, how we work, a little bit of our culture. As Cheryl alluded to, I'm going to walk you through an introduction to our strategies, some of our equity characteristics as well as performance metrics and then, lastly, give you an update on our newest venture that you heard Rob talk about, just 4 months after the acquisition of Perpetual, some fairly compelling, in our view, initial returns out of the Australian vehicles managed by Trillium. So first, let me start. We're very fortunate at Trillium to have nearly 40 years of dedicated focus on sustainable and responsible investing. Over that time, we've accumulated significant experience, significant domain knowledge, proprietary databases, processes that have allowed us to get a significant head start in what we think is a very competitive advantage as the broader investment marketplace worldwide begins to acknowledge, accept and, perhaps, finally integrate environmental, social and governance factors into both equity, fixed income analysis, whether you're an active or a passive manager. It's also quite fortuitous, here we are as part of the Perpetual family, when we had humble beginnings in 1982 as a Boston-based boutique. Here, we are being able to offer our strategies at scale, really for the very first time in North America, in Australia and New Zealand. And as you'll hear later from other members of the distribution team later on in other geographies. So we're very excited about that potential. So first, let me talk to you about the team. Our portfolio managers work in a team-based structure. Our lead portfolio managers, the vast majority of which have between 20 and 30 years exclusively focused on sustainable and responsible investing, whether they grew up here with us at Trillium or they came from other ESG specialists. Not only do they protect, promote and perform on behalf of clients and generating positive financial and environmental, social, governance returns, but they're very important to mentor, teach and give learnings to a lot of the other members of the team that are earlier in their journey. So when Matt says we're a pioneer, that we have a pedigree of sustainable and responsible performance, what it means when we say we have a high-quality bar, what it means when we say we have strict ESG criteria, keeping that culture together is paramount. And that's one of our key commitments from a people organization side. Let me introduce you now to the broader investment team. 17 investment professionals spread out over 3 offices in the United States, Boston, Massachusetts, where most of us are based; San Francisco, California; and Portland, Oregon. To give you just a glimpse of diversity, we are about 50-50 male-female in the investment team as it sits today. We have a player-coach structure here at Trillium. So as you heard Cheryl talk about her large-cap core portfolio, she's also our Chief Economist. Many of our portfolio managers have equity research analyst responsibilities. So they are the key linchpin in our integrated process, where they rate and rank every stock in our approved list, both from a fundamental and from an ESG perspective. They also head up our materiality processes that Cheryl also mentioned, forward-looking, built by Trillium with 4 decades of experience and what we think the key questions are to ask management teams, how do those teams respond over time? What do we think about those responses? Very similar to what fundamental folks have done exclusively, we're lucky to have that intellectual property in-house. Also, Matt referenced being focused on advocacy and even to public policy. So not only do we ask our -- all members of our investment team to contribute to returns on behalf of clients, we're asking them to be committed to pushing the field of sustainable and responsible investing forward. So that means participating in NGO activities. Here in the United States, an organization called SASB is trying to standardize and promulgate standards around ESG reporting and disclosure. All of you, by this point, I'm sure, are well aware of the UNPRI. Not only was Trillium involved with that organization as it took off as an early signatory, but also we're active today, worldwide. What does it mean for those organizations to consider formalizing guidance to all of us in the asset management world? We want to make sure at Trillium we have our voices heard, that these processes stay authentic as the mass market takes hold. Let me now switch gears into our strategies, if you will. So we have 7 equity strategies. We're very pleased with performance. As you saw, Rob give you a little snapshot of our performance cumulatively over both a short tenor and a longer tenor. Throughout market cycles, our portfolios have performed as they've been designed. And as I mentioned, we're pleased with those performances. Seven equity strategies. I'll give you a little bit of an eye chart here. But back to diversity for a moment, 70% of our portfolios are run by females. So whether that's all-female team, is that a lead PM that's female on another strategy, it's important to us. Diversity, we fully believe, adds to better returns. We've seen it in our product, and we're demonstrating it to you today. Three strategies I want to talk about here are fossil fuel free strategy. So as Cheryl mentioned, we have a variety of SMA products, the Trillium Mutual Funds as well as the number of sub -- relationships including Manulife and John Hancock in North America, Green Century in North America and now our latest relationship with Perpetual. Two of the strategies in the fossil fuel free area are very long-time constituent members for us in our platform. Our flagship Trillium ESG Global Equity product, one of the first fossil fuel free mutual funds launched in North America, inception date 1999. You see the performance in front of you, not only maintaining its strict environmental criteria and separate investment process, but also generating returns in different market cycles, different cadences, broadly diversified its core. It's looking bottoms-up for quality companies that hit the portfolio management's high bar for inclusion in that portfolio, broadly diversified at about 125 names currently, very respectable active share, very strong risk control management. On the other hand, sustainable opportunities, it's a bit of a satellite for us at Trillium. It's our most concentrated product. 50 stocks, much higher active share into the mid-90s, very alpha-seeking, thematic. We're looking for climate change solutions, economic empowerment, healthy living. This is a strategy that many of our clients look to map to the UN Sustainable Development Goals. Two different strategies, always been fossil fuel free. We're quite pleased and very proud of the legacy that those teams over time have built. Let me stop here and just give you a glimpse of what life has like been -- life has been like after Perpetual. Just 30 days after close, we launched these 2 vehicles in the Australian dollar form in the Australian marketplace, August 4. The Trillium ESG Global Equity Fund, the Trillium ESG Global Sustainable Opportunities Fund. So not only are we very encouraged by the reception, the returns, as I won't repeat what Rob said, have been, I'd say, we're very pleased right out of the gate with what those PM teams have done. So Matt, Cheryl and I are very excited to, perhaps, take your questions in a little while. But until then, I'll pass it over to Emma. Thanks so much for your time.

Thank you, Matt, Cheryl and John. I would now like to introduce you to Cory Martin, Chief Executive Officer of Barrow Hanley and key members of his team. Brad Kinkelaar, Senior Managing Director and Portfolio Manager; and Rand Wrighton, Senior Managing Director, Equity Portfolio Manager. Cory joined Barrow Hanley in 1999 and has been instrumental in the creation, development and implementation of the organization's nonvalue -- non-U.S., sorry, value, global value and emerging market equity strategies. In 2017, Cory became Chief Executive, Director and CEO. Cory has over 30 years of industry experience. Prior to joining Barrow Hanley, Cory served as Vice President at Templeton Investment Counsel in Fort Lauderdale, Florida. And prior to that, he served as an institutional investment consultant at LCG Associates. But before we hear from Cory today, I would like to start with a short video introducing you to the Barrow Hanley team. Thank you. [Presentation]

Well, thank you, Emma. Well, good morning, everyone. Thank you for your time this morning in Australia and New Zealand and other APAC regions, and this afternoon, for those of you calling in from the U.S. It's a pleasure to join you virtually here from Dallas. And I want to thank each and every one of you for this opportunity to share just a short glimpse into our firm, which is Barrow Hanley. Joining me today are 2 of my colleagues and senior -- fellow senior leaders of the firm Brad Kinkelaar, lead Portfolio Manager in our Global Value Strategy; and Rand Wrighton, lead PM on our Emerging Markets Value Strategy. And our goal really is over the next few minutes, we'd like to introduce the firm to you, let Brad and Rand really highlight 2 of our 21 fixed income and equity strategies, given the time frame, and really talk about the key elements that really differentiate our firm and make it a truly unique place to work. So looking at the first slide, who is Barrow Hanley? Let me first begin by hitting on a few of the high points, which will give you an overview of our firm. First and foremost, we're a 42 year-old firm managing both equity and fixed income portfolios. Since 1979, Barrow Hanley has had really one singular focus, and that is value investing in both equity and credit markets. We don't -- in equities, we don't manage core. We don't manage growth. We only manage absolute or what some would call traditional value. And regardless of the market environment -- and trust me, as everyone knows, it's been a challenging environment for value. However, we never waver. We've remained true to our style because that is what our clients expect us to do. It's why they hire us. So our key strength is our people and the resulting culture that we've built around those people, which has created a stable environment. You heard that word a lot. Stability is the hallmark of Barrow Hanley, both in terms of low employee turnover and in terms of long-term client partnerships. And Barrow Hanley is viewed as a final destination professionally, not as a stepping stone, and also as a valued and principal partner with our clients. What results is an enduring and disciplined process conducted in a respectful and accountable way, which really leads to beneficial client outcomes. Lastly, we have been a signatory of UNPRI and currently hold an A rating from them. Our approach to ESG and responsible investing, we believe that impacting change begins by engaging and working with company management teams to unlock value and improvement for all stakeholders. Moving on to the next slide, our clients and our product offerings. As a firm, we currently manage over USD 45 billion, approximately AUD 60 billion for the benefit of our clients. The split of our asset base is roughly 3/4 to equity, the remainder to fixed income. And as you might expect, in the middle pie chart, our client footprint has historically been fairly U.S.-centric because of our legacy, and yet we've improved that mix over the past few decades. And we're very excited to be partnering with Perpetual's global distribution ambitions to further alter that mix further, and we've got a lot of traction outside the U.S. right now. And lastly, on the right side of the slide, you see a variety of client types, which we hope, too, will flourish with Perpetual's distribution initiatives, but really working in combination with our current distribution team in Hong Kong, London and the U.S. Taking a look at the next slide, what is our ultimate goal? Well, investment managers' ultimate goal is self-explanatory. However, we strive to achieve -- what we strive to achieve for our clients, in addition to competitive performance, is the delivery of unique and highly differentiated portfolios relative to our peer group that exceed the return targets of our clients' objectives and which we have done both in global emerging markets, all of our fixed income strategies and most equity strategies over time. On the next slide, we're often asked, what is our competitive edge? Why is it that we can achieve our stated goal? What is it that differentiates Barrow Hanley from the herd? First, our team and culture. I touched earlier on the stability of the team, and I should expand on that. This is a stat that is not widely known, but true. We've had only 1 senior investment team member leave our firm to a competitor in the entire history of the firm. That is an unheard-of statistic in the industry, and it tells our clients a lot about the culture and our environment. That unique stability is very critical in our business. It's critical for every investment management firm. But in our firm, it's very critical because what it gives you is it gives you continuity of thought. It gives you continuity of philosophy. It gives you continuity of process, and importantly, that is what gets translated down to future generations of Barrow Hanley investors. And we're now on our fourth generation of investors here at the firm. It's almost as if there's an institutional memory or a library resides at the firm. We sort of view it like Barrow Hanley is like a painting that is never finished. When you join the firm, you pick up the paint brush, you add your strokes to the painting to make it the very best it can be. And when you leave the firm, you lay the paint brush down and the next people pick it up and add their own strokes. Experience. We have significant experience. There's no substitute for experience in our industry, especially when you're buying securities on a fundamental bottom-up basis. Nothing rivals really the knowledge of success or the scars of failure of having witnessed, endured, learned from a variety of mark cycles. And I'm guessing that if it's happened in the markets, someone at Barrow Hanley can relate to it. Even in this most recent period brought on by the pandemic in March, April and May, very aggressive, both in fixed income and equities, repositioning the portfolios, rightsizing and making a lot of moves to get the portfolios in the shape they need to be for the expected future return and a rebound, which we knew would come. Alignment. One of our founders, Jim Barrow, would say every person, every firm has a one-trick pony that they're good at. And they just need to figure out what that is. And so for Barrow Hanley, our one-trick pony is value and buying undervalued securities, both in equity and credit markets. It's what we do. It's embedded in our DNA. Our process in both fixed income and equities, it's time tested. It's disciplined. It's proven, and we believe historically has been repeatable. When we're looking at an investment opportunity, we're not looking at quarterly earnings, rarely looking at 1 year. We're looking at true earnings power of a company over a full 3- to 5-year period. And that has resulted in -- that is done by our team together and our deep research platform. It is this persistent use of the process that has resulted in over 42 years of consistently adding value above the benchmarks for our clients. Moving on to the next slide, I'll mention a short bit about our investment philosophy. Our philosophy is straightforward, Rand and Brad will talk more about this in a moment. We seek to identify dislocations in the investable marketplace, where security is down for reasons that we can identify, understand and believe are temporary. In addition to that, we want to see several catalysts to win from a re-rating perspective. On the next slide, I mentioned DNA, our philosophy is executed through a very rigorous fundamental security analysis. As you see here, the ideal stock profile will exhibit the traits that you see on the right of the slide. Attractive valuation, stable to improving fundamentals with multiple ways to win. We'll talk more about that in a minute. And finally, really finding the intersection between these 3 considerations creates the opportunity for our success as security analysts. So in closing, our security-level research is the premise of our firm. It permeates everything that we do, including in both global value and emerging markets here. You'll hear about this from Brad and Rand in a moment. Both strategies, you'll hear about, have very strong records, large capacity to grow and are unique and diversifying in terms of holdings relative to many of our peers. I'd like now to turn the floor over to my colleague Brad, who will share some of the key features of our global value strategy. Brad is the lead PM on the global team. He's been with the firm for over 3 years. Prior to Barrow Hanley, Brad spent quite -- built quite a record at both PIMCO and Thornburg, where he's involved in equity portfolio management efforts there, building strong performance records and significant asset growth at those 2 firms. So Brad, I'll hand it over to you.

Thanks, Cory. For those of you who don't know Cory, he's one of the true good guys in the business. He's a high-character leader and he's really a foundation for Barrow Hanley, making it an enjoyable place to work. So I hope that each of you will get a chance to meet with him and get to know him well through the years. I'm excited to be here today to talk to you about our global value equity strategy. And with our new partnership with Perpetual, we're really excited about the opportunities going forward. The global value equity strategy is differentiated in the marketplace. It's a true traditional value portfolio. Think of it as an all-weather value strategy, hopefully, a foundation of your global value exposures. Primary benchmarks are going to be MSCI World Value Index or the ACWI Value Index. And we hope to generate alpha over those benchmarks in any market environment. And that's to differentiate it from what's typically thought of as a boom-bust cycle of value investing. For example, we're not deep value, which tends to be more pro-cyclical. We're not defensive value, which tends to be countercyclical. We're definitely not relative value, which has had strong returns in growth-led markets. But as a true traditional value portfolio, we want to migrate to where the value is, where the widest opportunity sets are. We think of it as a Barrow Hanley best ideas portfolio. So what does that mean? Over the last 3 years, our analysts have generated about 270 new stock recommendations. About 180 of those stocks are owned in Barrow Hanley portfolios, but only 50 to 70 of those are owned in the global value strategy. So it is the most selective strategy of the firm, hopefully being able to select from the widest assortment, the widest opportunity set and take advantage of the greatest market inefficiencies. So over time, I talked about migrating the portfolio, so we want to be able to migrate between the more pro-cyclical stocks and the more defensive stocks between U.S., non-U.S. and emerging markets, between industries and sectors and even between market caps. For example, in the first half of this year, we saw large-cap growth companies outperform by about 20%. We saw small and mid-cap value stocks underperform by about 20%. So the portfolio naturally migrated to what was unloved in the marketplace. Now we have about half of the portfolio in small and mid-cap stocks. It's a high-conviction portfolio. I've mentioned with 50 to 70 names. What we're really looking for is high active share. We're significantly over 90% versus the benchmarks right now. Importantly, at about $5.4 billion of U.S. assets under management, we still have a lot of capacity remaining to raise assets if performance remains strong. Looking at the next slide, we really want to try to overcome inherent biases that are inherent throughout the investment process. We do that through focusing on fundamental stock analysis, bottom-up analysis, thinking about the risk rewards of each of the opportunities in the stock. We want to generate asymmetrical returns in your portfolio over time. And so for example, over the last 3 years, we captured about 120% of the upside in the market of the value index. But we've only captured about 95% of the downside in the market. So that's good asymmetry. But we do that stock-by-stock. Looking at the upside optionality versus downside risk of every opportunity that we're contemplating investing in. So we really want to understand those risks, the trapped doors that are there, even though we may not expect them to happen. Because we're not going to be able to predict all of the things that are going to happen in the future. So we talked about the domino theory of risks. It's really hard to predict the first bad thing that happens. And when bad things happen, it tends to happen in sequences. So it's really hard to predict the first domino to fall. It's almost impossible to predict dominoes 3 and 4 that fall. But if we can manage those risks without making big binomial predictions, we think that we can manage the portfolio a little bit more effectively and give you a smoother ride over time. So rather than thinking about the big predictions, think about it more like an insurance company, where insurance companies aren't in the business of predicting where the next hurricane will hit, or how bad will the next tornado be. Rather, they're simply saying, "something bad's going to happen in the future." When it happens, what's our potential exposure? Are we diversified enough? Do we have the balance sheets to support us? And are we pricing that risk appropriately? And if we can do all those things right, we're going to be okay. And that's how we think about this portfolio. We want to have that adequate diversification by securities and sectors, and regions and make conviction-based weights in the portfolio not just based on how much money we think we can make. But also just as importantly, how much money can we lose when we're wrong. Because having a 3% position in a stock that can go down 100% is very different from having a 3% position in stock that we think can go down 30%. So we want to risk-weight our opportunities and understand that balance. Understand that asymmetry in the portfolio, and try to ensure that we always have attractive asymmetry on a stock-by-stock basis aggregated to the portfolio. When we look at the portfolio constraints, I'll focus on emerging markets as another example. In 2017, we had 1% of the portfolio in emerging markets, 1% by country of domicile. Since that time, over the last 3 years, emerging markets has underperformed. And the portfolio has migrated to more emerging markets exposure to where we now have about 8% of the portfolio. Once again, just highlighting the flexibility of the strategy. When we look at past performance, we look at the year-to-date, we're outperforming world value by 480 basis points; 3 years by over 300 basis points; 5 years by almost 300 basis points. So that's been strong. But if we look at the last 4 years, 2017, '18, '19 and '20, we have 4 very different market environments with different drivers, with different risks and this strategy has kept you in the game every single year and added alpha. 2017 was a deep-value year. Very pro-cyclical portfolios did extremely well. This portfolio outperformed by 760 basis points. 2018 was the exact opposite. If you remember, fourth quarter of '18, markets took a nosedive down 25%. Defensive value was the best-performing flavor of value that year. This portfolio continued to outperform by 80 basis points. 2019 relative value took over. We're not relative value managers, but we outperformed by 440 basis points. 2020, we've seen everything. First part of the year was defensive value. Last part of the year has been deep value. Relative value has outperformed the entire year. Our portfolio has outperformed by 480 basis points this year. So 4 very different market environments. Most value strategies don't keep you in the game year after year after year regardless of what's going on. So with that, I'm going to turn it over to Rand Wrighton. Rand joined Barrow Hanley 16 years ago. And honesty, Rand and Cory have really led Barrow Hanley's expansion into non-U.S. markets, and building out our non-U.S. platform. Rand's been a real pioneer. He's done a lot of the heavy lifting of building our research capabilities outside the U.S., and he's a great analyst. He's a great portfolio manager, and he's a real competitor. Rand Wrighton.

Thank you, Brad, and good morning, everyone. It's great to be with you today. I am Rand Wrighton, the lead PM for the EM strategy, and I'm thrilled to be in my 16th year with the firm. And even more thrilled with the new partnership with Perpetual. All of us at Barrow Hanley are extremely excited about what the next few years will bring. And I think it's just an ideal fit between the cultures, the companies and the business plans. When we started the emerging markets product back in 2012, we noticed that the EM markets stocked up incredibly well against how Barrow Hanley had been investing for 4 decades, for a couple of primary reasons. The emerging markets are prone to swings in volatility. It's a big downside volatility. Markets, whether they'd be in Latin America, Asia, EMEA, routinely sell off, violently in panic sell offs at the country level, the sector level, stock-specific level. The valuations of stocks in these markets compress to levels we almost never see in developed markets, single-digit PEs, double-digit dividend yields, strong balance sheets. If you have the investment expertise, courage and discipline to weigh in, there's some phenomenal bargain that has to be held, and that's what Barrow Hanley's calling card has been for so many years investing in those kinds of stocks. The second reason is that there are a lot of great dividend payers, more than 80% of your opportunity set pays dividends in the emerging markets. And Barrow Hanley has made a tremendous track record in building dividend portfolios and having high dividend-yielding portfolios as part of the core strategy. When you look at the emerging markets, the long-term impact of dividend compounding is almost half of your total shareholder return, which is similar to the U.S. market, so very similar. So the product itself has about $220 million today. I'm pleased to report at the end of November, we funded a new mandate so that number should move up to more like $380 million by the end of the year, and we've got a great pipeline moving forward. We do have 2 variants of the emerging markets product that diversified, which has 50 to 70 stocks, and a more concentrated version, which runs at 20 to 40 stocks. It is an all-cap value strategy as well. We look to exploit opportunities regardless of them being in this mid-cap or the large-cap area. We think that you do have a more constrained university emerging markets, and it's very important to have the broadest opportunity set you can. It's a high-conviction strategy. The portfolio is run at an average of 90% active share versus both the EM value and the EM core index. Currently, the portfolios are around 96% active share. We have a world-class investment team running the product. Average years have experienced 17 years. And the team has seen up cycles, down cycles and everything in between, and has done a marvelous job adapting and investing. So we feel like we have a top rate team. Cory mentioned this, but we have a highly consistent philosophy and process. You have -- due to the unique stability of Barrow Hanley, you have -- largely have the same investment team, applying the same investment process and discipline over a long period of time, which lowers any risk of style drift but more importantly, ensures that you have repeatable returns over time as you're executing that process through the cycles. The last part I'd emphasize here on this page is a unique portfolio, and this was touched on before. But if you look at our emerging markets product, the portfolio of stocks that we have actually has less than 15% overlap with even our closest peers. And so we've received great feedback from our clients in terms of the diversifying nature that it provides to their allocation in EM, in terms of giving them extra exposure in areas that they don't have with the existing platform managers. If we move on to portfolio construction on Page 51. At core, what we're looking to do here is to build a portfolio comprised of idiosyncratic stocks that we believe have a highly attractive and asymmetric risk/reward profile with the downside protected by chief valuation, attractive but sustainable dividend yield to pay us while we wait, and upside catalyst, driven by factors that we can understand and predict over the next 18 to 24 months. A few key tenets. If you're going to invest the way that we do, look for stocks that have been maybe through some choppy waters, have been beaten down and are trading at very discounted multiples. You need to have confidence that the company can make it through the other side of the difficulties without a disruptive capital event. Unlike the developed markets, capital markets can open and close overnight in emerging markets. So therefore, we really shape our portfolio and focus on companies that have stronger-than-average balance sheets. We also are circumspect around the lower quality of disclosure that you get in emerging markets, the management and governance challenges, you see the different accounting conventions. And so we also focus a lot on cash flow as opposed to reported earnings. In our experience, cash flow is much more difficult to manipulate than stated earnings. And so there's a heavy bias in our investment portfolios towards high cash conversion companies, if you will. A hallmark of Barrow Hanley, since we were founded over 40 years ago, was to advance with companies that had management teams that we could believe in, management teams that we thought had a coherent strategic vision for the business, that always paid appropriate attention to minority shareholder concerns and that had acceptable, if not, best-in-class governance policies. This has been a hallmark of our investment style in the U.S. for so many years, and it's a hallmark of our investment style in the emerging markets. We do not employ what we would call dirty value, which would be to look past open corruption, theft and graft that occurs, unfortunately, in many state-owned enterprise companies. So that leaves our portfolio to be somewhat SOE-light, if you will, versus many of our competitors, but we think that's what's most appropriate for the clients. The last key tenet in portfolio construction is around diversification. This is especially important in emerging markets because the rules of business can change overnight in some instances, and you need to be very careful that you don't back into too much of the same exposure. We would never, for example, own more than 2 stocks in the same sub industry in the same country. There's just simply too much business risk there. Back in 2012, the Brazilian utility regulators changed the concession rules over the weekend. On that Monday morning, the whole entire sector was down 30%. And these things happen in emerging markets. It's just part of the territory, and we manage the risk of the portfolio appropriately, insurance diversification. A couple of other key aspects that we focus on. We're very centered around the cost of capital in the portfolio. We want to make sure that we have the largest weights in the portfolio in the highest risk-adjusted upside stocks. We want to make sure that we maintain strict discipline around our price targets. In terms of constraints, we don't allow any position to go over 5% in cash or an individual stock, and we won't go more than 40% in a single sector. So how has it worked out for you -- or for us? If you look at performance, you can see that on a 1-, 3-, 5-year and since-inception basis, we've got a very nice margin against the EM value index. In fact, if you were to look at since inception through the end of calendar year '19, you'd see that we actually had beaten the core index despite never owning any of the growth champions that have had such a marvelous run. If you think about our product in terms of calendar years, since launching the product in 2012, we've bested the EM Value Index 6 out of 7 calendar years, and I'm happy to report that in 2020, it looks highly likely, like, we'll do make that 7 out of 8 years with a nice lead now that we have year-to-date versus the EM value index. I'd say in recent months, as we've seen value really start to take off a little bit and take back some gains versus growth, our portfolio has done even better. So you never can call the turn in value and growth. But when that does occur, it will be a very substantial tailwind for us. And we think that our clients will want to be well positioned for that. So that's a lot of talking, and I'll leave it there. I thank you for your attention. I look forward to any questions.

Well, thank you, Rand and Brad. We hope the last 30 minutes has demonstrated a feel for who we are as a firm. We obviously have 21 total strategies and not enough time to talk about it, including over 10 in fixed income. But -- and also why we're excited about the current market environment, as Rand mentioned, we do feel like things are turning. And particularly, our new partnership with Perpetual, which we couldn't be any more pleased with. So on behalf of Rand, Brad, and myself and the rest of Barrow Hanley, I want to thank each of you for your time this morning. I would now like to introduce David Lane. David recently was appointed Group Executive of Perpetual Asset Management, International and will lead the newly created division. That's where we will be within Perpetual, both Trillium and Barrow Hanley. Prior to this, David was Group Executive of Mergers and Acquisitions, and originally joined Perpetual in 2017 as Group Executive, Perpetual Investments. David has more than 20 years of experience in asset management, wealth management, investment banking and has a very deep understanding of your local market, but also global financial services landscape in general. Prior to joining perpetual, David was CEO of Count Financial. Then held several other positions, senior positions at CBA, Neuberger Berman, Aetos Capital, JPMorgan and Goldman in New York. So thank you, and I'll hand it over to you, David.

Thanks, Cory. My name is David Lane, and I'm the Group Executive for Perpetual Asset Management, International, or PAMI as we've been calling it. I will hand it over in a little bit to Adam Quaife, who's the global Head of Distribution for Perpetual; and then to Chuck Thompson, who's the Head of Distribution for the Americas as well. As many of you know, perpetual has been talking to the market for some time about our global growth strategy. There are 5 key planks to our strategy. The first is that we're seeking world-class investment capabilities that have both global demand and significant capacity. Second is we fundamentally believe in boutique structures. And if you run these businesses consistent with a manner that have made them successful, with the existing management team, investment process, culture and brand, they will continue to flourish. We believe world-class distribution talent is just as hard to find as world-class investment capabilities, and we are fortunate to have both Adam and Chuck, who are proven world-class distribution leaders. Importantly, both have worked with Rob Adams, our CEO in the past. Adam's CV includes setting up Franklin Templeton's business in Sydney, and he has managed successful distribution teams in Europe, the Middle East and Asia. Chuck started as the third employee at Henderson in the U.S. And during his 17-year career there, he raised over USD 20 billion in AUM. We believe that large, sophisticated clients are seeking deeper relationships with fewer asset managers to help them find solutions to the complex challenges they face. And we think that the capabilities we are putting in place are going to allow us to have those conversations. And while we focus on bedding down Barrow Hanley and Trillium in the near term, we will also look at bolt-on acquisitions for both of them. But we'll -- over the medium to longer term, we will look at more meaningful acquisitions in different asset classes to help further diversify and grow the business. Turning to Trillium. Trillium was established in 1982, and it is a deep, integrated and authentic ESG asset manager. Since closing on the 30th of June, we have helped Trillium to refresh their branding, to complete 15 RFPs and to establish 2 Australian-based funds, which John talked about, and we're really pleased with the start they've had. One of which has had a 3% outperformance, the other 5% outperformance since inception. Always good to start with a very strong start. But more importantly, the near- and long-term performance across all of Trillium strategies is strong and shows that you can both generate alpha and help change the world. Our goal is to transform Trillium into one of the preeminent ESG managers of the world, if not, the preeminent one. To do this, we plan on enhancing their global brand awareness, develop -- further develop relationships with consultants and investors and leverage Perpetual's growing global capabilities, distribution capabilities. Turning to Barrow Hanley. Barrow Hanley is a true-to-label value manager with a story brand name in the U.S. It has a strong 40-year track record and an institutional grade investment process. With the market shift towards value, Barrow Hanley's recent performance has been particularly strong. And as Cory mentioned, they have deep long-term client relationships. In fact, they have over 40 clients with in excess of 20 years having been with Barrow Hanley. But as important is the quality of these clients. They are some of the most well-respected financial services firms across the world. Over the last month or so, we have shifted the management of the Perpetual global fund to Barrow Hanley and look forward to watching it grow. In terms of next steps, we will help Barrow Hanley access growing channels including targeted retail in the U.S. We'll leverage Perpetual's growing global distribution capabilities, and importantly, we plan on broadening Barrow Hanley's suite of offerings into new retail products such as mutual funds and ETFs. And with that, I'll hand it over to Adam to discuss distribution in more detail. Thanks.

Thanks, David. It's exciting times for Perpetual, transformational times, if you like. If we look at what our business mix looks like today, you can see now we have a multiple world-class investment capability. Also, we've also now got a global distribution and client footprint, and that's really important. And having spent time with Barrow Hanley and Trillium, there's one common theme with Perpetual as well is that -- its client centricity, and really putting clients first which is paramount these days. You'll see our asset mix by client domicile. Australia's always going to be important for us as a market. It's always going to be a focus market. It's the fourth largest pension fund market in the world. But that being said, to set the business up for success and for growth, we really needed to look at going offshore. So 60% of our client business now is in the United States of America, and that's the largest market in the world, an $85 trillion market. There's more advisers with Morgan Stanley in that market than the entire financial planning business in the market in Australia. So also at our doorstep is Asia. And Asia has 50% of the world population, and represents 50% of the world economic output. So that's very, very important for our business as we grow region-by-region. We might take a look at how our distribution footprint currently stands today. I -- we've got 38 distribution people in North America. I'll let Chuck Thompson talk a little bit more detail about his business. But in Australia and New Zealand, we've got a very strong pedigree. We've got a team of 34 and growing. And so we are growing our institutional business because with the acquisition of Barrow Hanley and Trillium, we've finally got a, I would call it, an institutional-class global equity capability with Barrow Hanley in the value space, but also Trillium on the -- in the ESG core space as well, which is resonating with our clients here in Australia and New Zealand, which is also an important market. In Asia, we currently have a presence in Hong Kong with a key distribution person in -- currently in place. And with Singapore, we're going to use our existing office and footprint in Singapore to start hiring out to target other institutional clients in Asia. And just on the topic of institutional, that is really key for our business mix going forward. 53% of our assets are now in the institutional space. And the reason that's significant is that you've seen a megatrend of the rise and the continual rise of the professional investor, so that sovereign wealth funds, central banks, insurance companies and obviously, pension funds as well. At the same time, you're seeing the institutionalization of the retail market as well, where our private banks are getting larger and larger. And they're really requiring a more sophisticated level of client servicing. And that really bodes well with our distribution model because it is a multi-boutique distribution model focusing on institutional and, where appropriate and where opportunistic, that retail segment in terms of the professional buyout. And then if I look at in the EMEA market, in the U.K., we're making some significant inroads there as we're transitioning our London office over to Perpetual. At the same time, we're also going to be putting people in place in Continental Europe. And that's very, very important. In a post-Brexit world, you can't just rely on London to fly in, fly out. So in that world, you really need to be closer to the client and be based in Continental Europe. And that really is -- it also allows us to capitalize on a huge megatrend on ESG. So if we take a little bit closer look at ESG, it's well understood in the Australian market. But maybe more importantly, in Europe, that's an $8.8 trillion market. And that is very much a trend that is client-led. But at the same time, you've got some regulation there, governed by the EU, which really stipulates that by March of next year, all asset owners, insurance companies, distributors, pension funds are really going to have to articulate in the public domain what their sustainability policy is in the investment decision-making process. And if they don't have that process, they need to explain why they don't and when they will have that. So we think that megatrend is effectively now table stakes in Europe, and that really places us in good stead with Barrow Hanley, Trillium and Perpetual in that market as we build out our distribution platform. Maybe a couple of final points, we've mentioned North America as a key market. And over time, we really see that as a great opportunity to extend into new distribution channels. If you look at retail, even a sub channel such as the wirehouses is 3x the size of the entire market in Australia. We've talked about the institutionalization of retail and the rise and continual rise of the professional investor and also that megatrend of ESG and building out a synchronized client-centric distribution platform is the key to success, and we're well underway in making that happen. So at the end, we've now got a world-class investment capabilities combined with leading industry distribution, and that's really going to lead to sustained quality and growth. Without further ado, I'll now hand over to my colleague, Chuck Thompson, to take a deeper dive on America. Thank you.

Thank you very much, Adam. I'm just very pleased to be with you here today, symbolically in Dallas, Texas, with the Barrow Hanley team. And we're talking to you today about the U.S. market and the opportunity for the Americas market that would include Latin America and Canada in the future. Just a bit about me. This is my 26th year in distribution. I've had the opportunity to work for 2 great firms, Van Kampen, now Invesco in the '90s, and a 16-year career with Henderson Global Investors on-shoring their product line into the U.S. market, which is now Janus Henderson. So this is a third opportunity to work with a global asset manager on-shoring capabilities and distribution personnel and really taking first-class engagement with our clients. So it's a real pleasure to have waited 17 years to become the first Perpetual employee in the Americas, which I'm very proud and thankful for the backing of Rob Adams, David Lane, Adam Quaife and the entire executive committee at Perpetual. What an amazing year in introduction. I think that the accomplishments of 2 transactions with the Trillium team that have worked so hard behind the scenes to accomplish that on June 30; and the Barrow Hanley team accomplishing that in advance of the November 30 original close in November 18, there are so many unsung heroes. I'm sure I speak for all of us at Perpetual. Thank you to the Trillium and Barrow Hanley teams for all of those hard-working folks that pulled 18-hour days across 2 continents to make this a $50 billion organization of assets under management with clients at the heart of all they do. So today, I'd like to kick into the presentation and give you an overview of both the institutional and the intermediary markets. As David and Adam rightly said, it is a very large market. But we want to be very specific today about where our focuses will be going forward. AUD 85 trillion is a very large opportunity in Australian dollars. However, what I want to show you, the messages of today are -- we have a diversified business with Barrow Hanley, having its legacy in institutional and consultant-led strategies. And in the box, you'll see that they have spent a lot of time in the last 40 years working on making sure they've earned clients' trust and staying true to their investment process of intrinsic discipline. And the opportunity for value to return and the road to recovery for value investing is immense, and we look forward to the opportunity of engaging with consultants, advisers and clients about the rebalanced potential they have after a decade of growth equity outperforming in their portfolios. And we'll talk about later some of the search activity that we see amongst those categories. On the institutional market channel potential for diversification, Trillium has an immense potential in the ESG space, being the second oldest integrated ESG impact manager in the Americas market. We think there are opportunity to be introduced to consultants who have never heard of them. And I'm very happy to say, in early days, we've had over 15 RFPs since June 30, about 30% higher than all of 2019 in just 5 short months, and we've already been in several finals. So thank you to those consultants who've really taken a look hard at Trillium's capabilities and their dedication to impact investing. This is an opportunity for Trillium to diversify their own book of business where they have a lot of endowment and foundation exposure, but institutional consultants are going to be introduced and very impressed with the team who is ready to engage them. The intermediary market, excuse me, is also a very large market. As Adam described, just one of these circles of the hybrid registered investment adviser or independent market are as large as the Australian entire capitalization of the market. And we need to be very focused in our efforts because intermediary channels take a lot of individuals to cover. And so we're going to do this very efficiently with a high-quality and first-class approach. And Trillium has a very good pedigree and many platform inclusions among the national brands in the Americas with their -- all across their product placements and strategies -- of the 7 strategies that they have. So we're very excited for the opportunity to introduce Barrow Hanley to the intermediary market in certain places where they don't sub-advise mutual funds of '40 Act sponsors or to those national brands that don't know Barrow Hanley. It's often been said that the Barrow Hanley brand is a story brand that many on the intermediary market have never heard of. So we intend, as a global distribution team, to introduce them to the intermediary markets. Therefore, you have a diversified business between Trillium and Barrow Hanley, between the institutional and intermediary markets, with a good team ready to apply the resources that we already have on those areas. As David mentioned, there's 420,000 advisers and consultants across the U.S., and only 1% of those investors use an adviser and consultant. 99% of Americans do not use an adviser and consultant. So that's a lot of advisers and consultants advising 1% of the population of wealth, which holds 53% of the wealth in the Americas. So moving on, we hope to diversify those channels but look at the fastest-growing areas as a team. The fastest-growing areas, as Adam mentioned, are the rise of the professional buyer. And according to Cerulli, the next 5-year estimates are for that generational transfer of wealth. The largest in history in America will happen from the baby boomers to the next generation and will be led by the professional buyers, helping those generations navigate the investments that their fathers and mothers owned. So we intend to bring resource and efficiency and real strategic planning to the professional buyer market, and we look forward to sharing that with you over the coming years as a global distribution team. These pockets of growth are, again, estimated at $4.2 trillion, again, about 20% larger than the entire Australian market, just in the generational transfer of wealth. These include the private banks, home offices of models and sub-advisory. Moving on to the road ahead. The road ahead is very interesting. The ESG universe and strategy demand is expected in the next 2 to 3 years to be extremely strong in those professional buyers in both the institutional and intermediary channels. We think that, that is a real opportunity for Trillium and for us to get out and tell the Trillium story and show their impact. And the performance across the board has been outstanding the last 1, 3, 5, 7 and 10 years. So we look forward to engaging especially foundations and hybrid registered investment advisers in the U.S. who have demonstrated by the dark blue bar the highest demand potential. And we look forward to engaging them and telling them about Trillium's impact, an integrated ESG style of investing, as you've heard from John, Cheryl and Matt. Moving on, there's an opportunity. So this is the headline that, we believe, may come out of this first meeting that there are over 100 categories in eVestment, which is the database used by over 90% of the consultant community in the Americas. You can wait years for a category to become the largest searched category, indicating future potential activity, and the Perpetual affiliates in Americas with Trillium and Barrow Handling strategies have 8 out of the 10 most searched universes year-to-date in 2020. Individually, you've heard from 3 of those today, which are large-cap core equity, the emerging markets universe and global value. We also think that U.S. large-cap value, after a decade of underperformance of growth, is well poised to begin to see consultants be concerned with growth equity outperformance and an opportunity to rebalance their equity portfolios to value. In fact, I've spent time today with Mark Giambrone, Lewis Ropp and Brian Quinn of the large-cap value and the dividend-focused value teams, and they've given me several quotes. One, year-to-date, the market had 30% of the days were value outperformed and 70% were growth. But just the last 45 days of the quarter, that is now 50%. And those days had an average outperformance 3x what growth outperformed value in the first 238 days of the year. So this may not be the turn. We hope it is. And we hope to engage our clients to really rethink their portfolios that have gotten out of balance with growth. So with that, having 2 affiliates, there brings a great deal of capabilities. And this road ahead, you have been watching the screen with the Trillium folks and seeing the rebrand that was done by Trillium. And the Barrow Hanley rebrand is well underway. I'm happy to say, in the first quarter, Barrow Hanley will be reintroduced with a very first-class look and global brand. We look forward to bringing the capability sets, and here's what I promised in February when I was with you last, that we would build out a global distribution team or Americas distribution team by the end of the year, and I'm very happy and pleased to announce that we had done exactly that. 31 Barrow Hanley individuals in distribution will be joining the 7 Perpetual U.S. services team, and I've hired 6 individuals. So by the end of first quarter of 2021, there will be 38 individuals coming to Barrow Hanley in the U.S. distribution market, both institutional and intermediary. So we've all seen the autobiography of a highly concentrated, thinly focused market, and that has thrown out all rational valuations and ignored the warning signs of a slowing economy. We believe that Perpetual's Americas business is diversified now by channel and focused on the uncovering of intrinsic value and impact investing with an integrated ESG process through Barrow Hanley and Trillium. And we look forward to introducing you to the rest of the team that all these capabilities represent. So this is a demonstration that we have a full distribution team that will go into '21 with a focused energy, collaboration and a collegial approach to bring these storied brands to our clients, advisers and consultants. With that, I'd like to turn it over to Amanda Gillespie for the question-and-answer session. And Amanda has 20 years of investment experience. She joined Perpetual in 2018 as the General Manager of Client Solutions. She has supported Rob in the last year, supporting the Perpetual Investments group since August 2019. She sits on me -- on the Board with me at Trillium's Board of Directors and has been invaluable in assessing and giving feedback for the institutional community for Trillium's impact globally. And as Rob highlighted earlier, Amanda is the most recent addition to the Perpetual Executive Committee. So congratulations, Amanda. And over to you. Thank you, all.

Thanks so much, Chuck. Well, for the last 2 hours, it's been a great opportunity to hear about global foundations that now position Perpetual for strong growth looking ahead. You've heard from Trillium and Barrow Hanley, 2 truly world-class investment managers, and they will be key pillars of that growth as we'll build out of our global distribution footprints that you've also heard about today. It's now time to open it up for question and answers. [Operator Instructions]

All of our speakers will be online and available for this session. So let's kick it off for the first question. And this one is from [ John Church ], and I would hand this across to Trillium and probably ask Matt to respond in the first instance. In your ESG approach, how do you deal with companies and their approach to labor rights and environmental sustainability? Do you search for Living Wage commitment and Modern Slavery Statement? And how have companies dealt with staff during COVID?

Thank you. Yes. We do look for Living Wage and actually have had dialogue with many companies about raising the starting wages for their employees, which, obviously, on the surface, people will say, well, that will depress margins, but actually, we know that the conditions are created for lower turnover and lower training costs. And so we've had a lot of dialogue around raising minimum wage and around setting higher -- without that setting a higher starting wage for employees and traditionally low-wage jobs. And in addition, we indeed have asked for commitments on slave labor. And we've -- obviously, there's -- in addition to reputational risks, there's a lot of reasons why we want to make sure that companies are being very conscious about looking at the supply chain and the labor standards in the supply chain. And I know there was another part of the question, and the answer is COVID. We have been very proactive in trying to reach out to companies to make sure that they're treating their employees as an essential part of the business, particularly as you look long term, and not treat the employees as disposable during what has been obviously a very dramatic downturn in economic activity globally. And so we've been very pleased that the companies we've invested in have generally reacted very well towards keeping employees on, keeping them on health care and -- which is obviously critical in a country like the United States where we don't have universal health care.

Thanks very much, Matt. The next question is from Brendan Carrig, and I'll probably direct this one to you, Rob. I noticed the performance for Perpetual and Barrow Hanley is to November, but Trillium is to September. Can you comment on Trillium's performance since September, most notably in November?

Yes, sure. Thanks, Brendan. Good pickup. Yes, we had a last-minute hiccup on those numbers, and we will provide you with the 30th of November numbers very shortly. But suffice to say, in summary, the solid performance across the board for the Trillium capabilities has continued. You'll see that when we publish those numbers very shortly. So apologies that we didn't have those numbers up to 30th of November. We will. But the good news is the strong investment performance across the board has continued for those Trillium capabilities. And I'm sure if we get the opportunity, John Quealy might be able to provide some further comments in relation to the last 2 or 3 months.

Thanks, Rob. Next question has come through from Nigel Pittaway. And I think it's probably one for you, Cory. Over recent times, what have been the key challenges in attracting flows into Barrow Hanley? And which of these do you think have been eased by the Perpetual acquisition?

Yes. I think from my perspective, I think the flows have been just challenged performance for value in general. And there has not been a lot of motivation given this 10-year cycle for growth to make a switch from one active value manager to another. I'm very pleased to see now a greatly increased chatter on -- by asset owners, including sovereign wealth funds, on -- they're all interested in value now. And I think they're getting a little bit nervous about record valuation spreads, record performance spreads between value and growth under exposure. You look at the cyclically narrow market, the most narrow market in history, basically. Globally, about the 20 -- top 20 of 25 stocks are driving global performance. Within the U.S., it's even worse. If you look at the cyclically adjusted 10-year P/E of the S&P 500, it's back to 1999 levels, if not higher. And so I think there was a complacency in the past in terms of a lot of activity. But I think that that's running the scores. And it was mentioned earlier, it's -- you can't call a change in style. You can only hear through what you do. It does appear to me that all the signs are aligned, that you will see an increased interest and flows into value. I think it's just dependent upon the vaccine, and that's already shown up. I mean as soon as the 2 or 3 or 4 vaccines came out, there's such a disparity and a dislocation globally, particularly in global, less in Europe or [ EFA ], but in the U.S. and EM also, that you're going to see that pick up. I don't think -- I do believe that there was an impact from uncertainty with the BrightSphere holding company on just what the plan was since they had changed their strategy a little bit. I think that's been clear now to the marketplace that they have changed the strategy. And I don't think it had anything to do with Perpetual. I do believe that the new alignment with Perpetual is a perfect, not only investment philosophical fit, but complementary fit between capabilities, as mentioned by Rob and others today. We were a client -- Perpetual was a client of ours for over 5 years. We have a high degree of respect for the sophistication and the respect that they have within Australia. And we are confident that, that will be very helpful in terms of new opportunities, particularly immediately in Australia, where we already have some recognition, but also in other parts of the world as we work together, develop global distribution.

Thanks, Cory. Next question is from Calum Burns, and it's on distribution. I might pass to Adam in the first instance and perhaps a comment from Chuck. How is the existing Barrow Hanley distribution team being integrated into the global distribution team? Or will they work separately?

Yes. Thanks. Yes, thank you. Look, I think it's important to note that especially for institutional, the way Barrow Hanley has set up, a lot of it is consultant-led. And they've really built out a best-in-class centralized client portfolio management team. We're in constant dialogue with that team. We, being the Australian sales team, and also the London salesperson that was ex Barrow Hanley, has moved over to Perpetual. So it's all about communication. And I'm pleasantly surprised how it's currently working. It is still admittedly early days, but you are really seeing a decent level of global synchronicity as we respond to RFPs in Europe, in Asia and in the States, where everyone's being kept informed on what's going on. So I'm excited about bringing that team together, and Chuck might have an additional comment.

Yes. Thanks. I would just say and chip in that it's all about global collaboration, as Adam mentioned. And with his background at Franklin Templeton for almost as many years as I was at Henderson, we understand how to do that collegially and collaboratively. And that was the message here in Dallas today to the Barrow Hanley team, which I believe was well received. So we're very -- looking very forward to working collaboratively together to engage clients, advisers. And channel diversification will be our top priority.

Thanks very much, Chuck. Another question from Nigel Pittaway, which I'll probably pass to you, David. What do you think are the key competitive advantages and differentiators of PAMI? And what will they be? And how do you cope -- we can stand out from the level of competition to target markets -- in the target markets?

Great. Thanks. Great question, Nigel. I think when you think about it, it goes back to our strategy. And in some ways, it sounds simple. But I think it's really important and actually much more difficult in practice to put together, which is, if you can fundamentally put together world-class investment capabilities with in-demand products and have capacity and you can match that up with world-class distribution capabilities, you can do something pretty special. Now obviously, getting that to work is the challenge. And from my perspective -- and I should probably warn Rand and John, I'm going to ask for their views as well. But from my perspective, when you think about Trillium, we have really one of the authentic founders of integrated ESG. And it is working with some -- not only does it have terrific performance over all time periods, but it also has fantastic tailwinds when you think about the kind of the macro trends that are going on, whether it's the growth and the focus on ESG as well as the transition from the baby boomers to their children and the amount of money that is shifting to a more ESG-focused community. And then when you think about Barrow Hanley, it is such a deep and long-standing kind of value process that has really withstood the test of time. But I think we have some really interesting differentiated products that are really going to attract demand. But I'd be interested, first, in hearing, John, you talk about your perspective from an ESG perspective and then, Rand, because I think you have a very differentiated product, particularly in EM, and I think that would be interesting for people to hear more about it.

Yes. Thanks, David. So I would say we benefited from intentionality from the beginning. So with our private wealth direct business, as we call it here in the United States, we are touching a lot of clients, endowments, foundations, high net worth that are translating exactly what their values and intentions are, and that's been since 1982. So that filters very quickly to the investment team and what that means for our portfolios, what that means in 3 to 5 years, our average holding period. What are some of those consistent durations? Are they personal preferences? Or do they impact portfolios and performance? And so that's where we think we shine. So having that legacy of sort of getting to that last mile, if you will, has really benefited us as this market now is starting to multiply. So I hope that answered it a little bit, David. I'll pass it over to Rand for his perspectives.

Yes. Great. Thanks, John. And thanks, David. Appreciate the question. Barrow Hanley, and we touched on this, from the very beginning, has focused our team on stability and discipline. And one of the things that I always thought was great about the firm is most folks for their first year or so at the firm would actually sit right next to Jim Barrow on the trading desk. And there's that kind of rigid adherence to discipline through cycles up and down. And we also -- that's helped by the tiered experience that flows over from team, generation to generation. And so we're a true value manager. We don't change our stripes. We don't break in the face of a lot of pressure. When you've been, say, at a 10-year growth market and there's a lot of pressure to creep up, maybe [ cheating ] the names, we stick to what we do best. We stick to our knitting. And that often brings us to different stocks. And so I touched on this a little bit in the EM presentation, but our portfolios have very little overlap with competitors. We think that they have a high degree of overlap though with the philosophy and process of Barrow Hanley for 40 years. And so when you marry that all into a product, we think it's a highly reliable value product for our clients, highly differentiated in terms of the portfolio holdings and extremely well researched by a world-class investment team with many decades of experience. So we don't think there are a lot of firms out there that can claim that kind of consistency and offering for the marketplace.

Thanks very much, Rand. Next question is from Brendan Carrig, and it's -- probably I'll pass it to you, Cheryl, over in Trillium. I would be interested to hear about the process in assessing modern slavery risks in Nike given it's a top 10 holding of Trillium's?

Thank you. That is a great question. And we would say that overall, we could assess Nike as good overall, but we feel that it can be better through advocacy. There is a long history with Nike in terms of it having a great deal of contract labor in its processes over time. First, in 1996, they were one of the first companies to really face a sort of awake press on this, and they did quite a bit of work. They were one of the very first companies to do a full audit and disclosure to faculties -- of other factories. So really a poster child for the concerns about reputational risk. So the current issue is about Uyghur labor in China, specifically in the XUAR, Xinjiang Uyghur Autonomous Region. Nike has stated that it has confirmed with its contact suppliers that they're not using textiles or spun yarn from this region. But because that's just a statement from Nike, our assessment goes much further than that. So we are working with other partners through a group in the United States called the Interface Center on Corporate Responsibility, which has worked with us in coalition among a number of things. And we're specifically asking Nike for 3 things: to complete a mapping of the supply chain in and outside of China to identify its direct and indirect business relationships that are connected to the XUAR; to demonstrate its steps to disengage any business relationships with suppliers connected with forced labor on this; to demonstrate any steps of -- to disengage any business relationships with suppliers that are connected with force labor in and from the XUAR, particularly those that have been identified through reports in the press; and then to publicly disclose efforts and progress on the above, including how the company is working with affected rights holders in determining the remedy for this. Our feeling is we've worked with Nike before. They've been through this before. They understand how important reputation is in this. They also understand the importance from a human rights perspective of this. So we are working with partners to provide greater transparency about this, so we can be assured that they don't have business relationships with suppliers connected with forced labor. So I guess the long -- the short answer is it's a very long answer, and it involves multiple steps working with partners and pushing for greater transparency with Nike and other companies doing business in the region.

Thanks very much, Cheryl. Next question is from Andrei Stadnik. I will pass probably to Rob in the first instance and perhaps Trillium as well to comment. Client engagement and pipeline and mandate opportunities following value rotation in both Australia and the U.S., could you comment on that? And then secondly, an update on U.S. administration's thoughts on ESG in retail portfolios?

Thanks, Amanda, and thanks, Andrei. Good questions. Heads up, Matt Patsky, I might pass the second component of that question on to you. That's the update on U.S. administration thoughts on ESG in retail products. Andrei, in relation to the first component of the question, yes, I think the early signs in terms of pipeline are encouraging, both for Perpetual's Aussie equities business, which, as everybody knows, has a 50-year history of value investing and indeed for the Barrow Hanley pipeline. I think in relation to Barrow Hanley, Chuck put up a slide that talked about the most searched for categories on eVestment. I think that's pretty strong evidence that -- and also Cory's words just earlier, pretty strong evidence that -- to use Cory's phrase, there's a lot of chatter about value, and that's clearly a positive for us across the board. I think here in Australia, that near-term investment performance, as I touched on earlier, and as we showed you in one of the earlier slides, has come back very nicely. One swallow doesn't make a summer, but we're very encouraged by the client conversations that we're having right now. So Matt, over to you in relation to U.S. administration's thoughts on ESG in retail products. Thanks.

Thank you. Yes. There is -- certainly, you know there's been tremendous momentum in ESG products. And what we've seen in the U.S. is there being increased attention from the SEC and from the Department of Labor on the issues around ESG. I think what you're going to see with the shift in administration coming in January that we're going to see some of the -- and I would say impediments that were put in place in the Department of Labor, a new rule, which sort of was, I would say, slowing down the growth of ESG investment opportunities, particularly within 401(k) plans, retirement plans. I think we'll see that reverse. And in addition, I think you'll see just a greater effort, which was already conveyed from the Biden transition team to try to standardize ESG data. So we're going to see there being a push to standardize the data. And then I would imagine from the SEC more requirements on disclosure. So better quality of data, more standardization of data and more requirements about it being disclosed. All good news for those who are looking for this data to be incorporated into their investment process.

Great. Thanks, Matt. Next question from Nicolas Burgess. Probably a few people can comment. I might pass to Rob in the first instance. On Trillium, with most traditional asset managers launching ESG and ethical products, how do you intend to combat the increasing competition? The sector may be growing, but it's likely competition will intensify.

Yes. Thanks, Amanda. Chuck, I'll give you a heads up. I might pass to you just for the U.S. perspective, and it might be worthwhile then to pass to, say, John Quealy depending on time. Very briefly from me. I think what we really need to stress here is, well, one recognition of the megatrend towards ESG investing, that's clear. Money flows, and a level of interest globally is showing that. The other thing that I must stress is that Trillium is in an entirely unique position. One of the first founders of integrated ESG investing, a 41-year track record of doing so. That is what will differentiate us, differentiate Trillium when compared to a lot of other businesses that are applying perhaps positive and/or negative screens or applying a different approach just in recent years. 40 years' worth of foundation investing in ESG, I think, separates out Trillium to the vast majority of the pack. Chuck, maybe a few comments from a U.S. perspective, and feel free to hand on to maybe John or Cheryl on that.

Sure. Thanks, Rob. Matt and Cheryl, both at the top of the hour, used a slide that was very key to the Trillium process, which shows that many use ESG exclusionary screens, positive screens. But what makes Trillium different is the shareholder advocacy that you heard from Jonas Kron and the public policy implementation that they do with especially shareholder proposals. This has made, pound for pound, Trillium a small boutique, very strong in the industry and a leader. In fact, some of those groups like the Social investment Forum, U.S. SIF, many of the portfolio managers sit on those boards and have extreme influence in the true ESG impact investing group and aren't greenwashing. There are many firms out there that are greenwashing that don't have the capabilities that Trillium has spent 20 years building with shareholder advocacy efforts. So I hope to send that message through our distribution efforts to consultants who may not realize the depth of Trillium's knowledge and expertise. And there's one other key piece before I hand it over to John, which I think they're very, very humble about, is they have a 40-year database, proprietary database that goes beyond MSCI and Sustainalytics that they access and have a long, deep knowledge and history of these companies' efforts to become better social governance and environmental impactors. And by drawing on that depth of knowledge and experience and that deep database, they get augmented in their investment process to generate alpha and returns. And so that's a great place to put it over to John, who is the key person bringing the teams together on that process of integration with fundamental investing to seek alpha for our clients. John?

Yes. Thanks, Chuck. Very quickly, I'll just mention, it does start with the people and the team. They are experienced professionals. They're very good at what they do. My job is trying to put them in a position where they can succeed every day. So it starts with people. The process is consistent, but we're always looking to evolve it. We could take this discussion in a million different ways around data, the coming on clave of data science into the space. We're preparing for it today. But it's performance. So those 3 things, I would answer. It really starts with people, the process has proven, but we have to prove ourselves in the marketplace. And we're up for the challenge.

Great. Thanks. Thanks, John. Next question from [ Andrew Disia ]. And I'll pass this one to you, David. Referring to Slides 17 and 37 in the pack. Barrow Hanley assets are up since the deal closed to USD 46 billion, inclusive of those who have intended to announce termination. So is it fair to conclude that more of Barrow Hanley's clients have consented to the transaction? And second part, would you ever look to acquire the remainder of BrightSphere's affiliates?

Thanks, Andrew. Yes. So to your first question, the numbers that we announced at closing were end of October numbers. The numbers that you see today with the $46 billion are end of November numbers. And largely, the difference, in fact, substantially, the difference is in regard to both alpha and beta. They -- it's been a terrific month for performance across most of, if not all, of the Barrow Hanley funds, and the assets under management have gone up. There hasn't been any material difference in regard to consents. And I think at this point, you should assume the consents are effectively baked into those numbers. In terms of the second question, the remainder of the BSIG assets, we've said and we continue to say that the most important thing we can do for the foreseeable future, for the near term, is to focus on making sure that we bed down appropriately Barrow Hanley and Trillium. And that's what we plan on doing. And aside from perhaps some small add-on acquisitions, which might make sense within the context of either Trillium or Barrow Hanley, I wouldn't envision that in the near term, we'll be looking at any larger acquisitions.

Thanks, David. Next question from James Cordukes for you, Rob. Can you talk about the M&A strategy to broaden the capability? Where do you see the key gaps? And would you consider diversifying into unlisted assets?

Yes. Thanks, James. Good question. David touched on it briefly in the back end of his response to the previous question. I think for the short term, we are entirely focused on bedding down our relationships with both Trillium and Barrow Hanley. I think it's important to show up some proof points in terms of the thesis that sits behind the 2 acquisitions and Adam and Chuck and team building the global distribution, U.S. distribution capability and seeing some of those proof points come forward. So that is an absolute focus for us. Having said that, we will always keep an open mind to the right sort of opportunities for Perpetual in the asset management space. I think it's more likely to expect us to look at sensible bolt-ons for either business that are good adjacencies, and then that may fill some gaps that we have. In terms of your question in relation to specific gaps, listed assets, in the longer-term sense, we are thinking about those opportunities. I mean I certainly do believe that we are in a -- at the start of what was -- it is likely to be a heightened period of M&A in financial services and asset management in particular. So with that in mind, yes, we will continue to keep our finger on all the relevant pulses. Sometimes you can't pick your timing and opportunity. And if something does happen to arrive that we think makes particular sense to us, if we have already made the ground we want to make in relation to Barrow Hanley and Trillium and I guess a bunch of other boxes are ticked, then we may well consider it. But for now, our focus is on bedding down our relationship and those proof points for Barrow Hanley and Trillium.

Thanks, Rob. Another question from James. I might pass it firstly to Chuck, and maybe Brad might comment as well. Performance has improved with the recent rotation. Chuck provided some good industry-level color. But how has this changed the dialogue for value strategies with clients in the U.S. and Australia?

That's an excellent question and a good opportunity for me here in Dallas after spending a day with the Barrow Hanley team yesterday and today talking about just that. We're starting to see those conversations increase. Those are usual early signs, especially that search activity I shared on eVestment. Flows usually lag that search activity, but the conversations are beginning, and that is very healthy after a period of fallow times where conversations were more around retention and not about rebalancing. So over to Brad, who might have a viewpoint on this from his previous experience.

Yes. Thanks, Chuck. It's always an interesting experience where flows follow performance. We've had a healthy pipeline of interest in the global value strategy as well as our emerging market strategy and non-U.S. strategies for the last several years. There's always a FOMO, fear of missing out, for even institutional investors though. And that FOMO has led many to tell us that they know that value is the next place to go, but they don't want to miss out on the continued strength of growth. And so now that we've had a little bit of a leg up for value, we think that we'll have some people who actually get over that tipping point and understand that value is not dead.

Great. Thank you, Brad. We might keep pushing through because we've got a few more questions to get through. Another question from Andrei, which perhaps I'll ask Adam to comment on. What are Perpetual's thoughts on entering the active ETF channel given growth from peer products in both Australia and the U.S.?

Yes. Thanks, Andrei. I think for the Australian market, it's definitely Perpetual's plan next calendar year to launch a number of active ETF products. And that's really client-led, right, because there's quite a lot of clients that are requiring that type of structure. I might hand over to Chuck on the U.S. -- to answer the U.S. piece though.

Thanks, Adam. We are evaluating all strategic product priorities with Trillium and Barrow Hanley and certainly are aware of the megatrend towards the structure and the wrapper of the ETF vehicle, both nontransparent, semitransparent and fully transparent. So we've brought on capabilities and hired with a person who joins us as of last Tuesday with over 80 products in development in his career, meaning tens of billions. And so I look forward to introducing the distribution team to you and some of those capability sets, which will demonstrate that we definitely have the capability and the strategic planning process. At Henderson, I was involved in 2 dozen product launches, bringing onshore the Henderson capabilities. So I look forward to the opportunity to work in concert and in partnership with Barrow Hanley and Trillium to find the right vehicles for clients as they become needed. So thank you.

That's great. Thank you, Chuck and Adam. Another question from Nigel. Cory, I might pass this one across to you. You obviously referred to the value index as being the key one for Barrow Hanley. How do your clients typically think about this index versus the more widely used index-based benchmarks?

Yes. I would say that the majority of our clients are really large, very sophisticated institutional clients, multiple sovereign wealth funds. They do tend to bucket -- the primary benchmark will be relative to our style. And so it's not that way everywhere. Australia is not as prone to do that. I understand that. But in Asia, where we have clients, Europe, the U.S., it's really not dependent upon the strategy. I mean I would say 90% of the clients, our benchmark gets the value benchmarks, with a secondary benchmark being the core. And I think there's always an understanding over long periods of time. We do need [ DigiCore ] index. I think there's period of gross dominance. It's possibly a once-in-a-lifetime period for anyone in the investment business. But the answer is 90-plus percent of our client base compares us to value benchmarks over both 3 and 5 years, and with the secondary benchmark at the core, understanding what's happening within that dynamic of growth and value.

Thanks, Cory. Another question on distribution from Anthony, who -- Adam, I might ask you to comment first on that. On global distribution, you've talked about opportunities in the Americas, Asia and EMEA. In which region do you see low-hanging fruit? And which region do you think will be most challenging?

Great question. I might start off on EMEA first and talking about that megatrend that we touched on before on ESG investing. So the Benelux and Scandinavian countries, Switzerland and France, are all very, very big markets for ESG investing. So we've already seen some decent RFP activity, search activity from consultants in that market, which is really exciting. So I think that's a great market. The Middle East is very much -- and Africa is very much governed by sovereign wealth funds and central banks. And we are seeing some good opportunities there. Obviously, U.K. pension fund market, another large market, one of the largest markets in the world, heavily consultant-driven. I had that as a priority market. If I look closer to home in Asia, Barrow Hanley has been successful at raising money and having some long-standing clients in Asia already, where there's 5% of the global book is in Asia, split covering South Korea and Japan. So that's a good starting point. Japan is one of the largest, if not the largest, market in APAC. So I think we've got -- that's a good starting point, already having relationships in that market. And then I think we've covered the U.S. market, just that size of market. And given that both Trillium and Barrow Hanley are already in that market with a formidable distribution team, I see that as a low-hanging fruit. Challenging markets are markets like China, where it is a sophisticated market, it's a large market, but it's a little bit opaque at the moment. So there's those types of markets that can be a little bit challenging. But it's a good question.

Thank you, Adam. Another question from Brendan for you, Rob. Following the Barrow Hanley acquisition, you've doubled down on value. While the timing could be spot on, if we see the recent rotation continue -- sorry, if -- while the timing could be spot on if we see the recent rotation continue, can you provide some comments around the potential for future diversification into more growth-oriented equity strategies?

Yes. Thanks, Brendan. I mean I think as I mentioned earlier, one swallow doesn't make a summer. So it's been really pleasing to see the near-term rotation into value. We've made comments about that. The Barrow Hanley team have made some comments about that. I think time will tell. One thing to stress, in answer to your question, Brendan, is that as we search the world for world-class investment capabilities, world-class investment capabilities that could be sold around the world to both the institutional and the retail markets, that was our focus point. The style of the manager, whether they be growth or gap or value, was actually just a residual of finding the very best quality individuals that could find. And we found them in Trillium and we found them in Barrow Hanley. And Barrow Hanley just happens to be a value manager. So it was very much a residual of that intention to partner up with world-class investment capabilities, world-class investors. So I think as we think into the future, would we look to a greater diversification of styles? I'd say our approach would be exactly the same at it was for the 2 transactions that we've bedded down this year. And that is an absolute focus on the very best quality money managers we can find who we can help with distribution and growth ambitions over time. And their investments though would be a residual of that process.

Thank you, Rob, very much. Next question from James Cordukes. On the launch of Trillium in Australia, can you provide more color on the marketing efforts in both the institutional and retail channels? Sorry, Adam, I'll be passing this to you. And is there a pathway to get it added to model portfolios? I'd probably comment initially and say since the funds launched in August, there's been a huge amount of activity engaging with the market as well as looking to start the ratings process. And obviously, very strong initial performance has been a great tailwind. But I'll hand to Adam to comment as well.

Thanks, Amanda. Look, there's a top-down and bottom-up approach in a sense that Australia is a consultant-led market, both at the institutional and the retail level. So the consultants institutionally but also the research house has been a main gatekeeper to the retail market. So we've engaged at all levels, and the feedback has been very, very positive. And the bottom-up really comes from our sales team of 34, interacting with actual -- with clients and getting that message out. And again, feedback from the broader consultants and research houses has been very, very positive.

Thank you, Adam. And a last question for today is on global distribution again. Chuck, I might ask you to comment first. Looking at global distribution footprints, can you see some near-term wins? Or is this multiyear journey to generate increased sales? In that, can you touch on growth in the intermediary channel for Barrow Hanley? And how long do you anticipate before you gain traction?

Yes. Thank you. So it is both. Adam and I intend and are off to a great start building a globally -- we would like to use the word global synchronicity, a globally collaborating team. We -- our clients already demand this. Mercer, for instance, has ESG head in London, but the research house for ESG is in New York and Chicago. Sydney has an office where they are evaluating ESG all the time. So our clients and consultants and gatekeepers are already global. And Adam and I intend to make sure our team really understands the power and the potential of globally collaborating. On the intermediary market, which I have spent the better part of my 26 years addressing, it takes time. But it is not insurmountable when you bring on talent that have the relationships at the gatekeeper level and understand the research process that's required that is very institutional to evaluate managers and get them platform inclusion. So it's a similar market in that regard, Adam tells me, as Australia. And we have that experience, in fact, the management team that we are forming with the 38 folks in the U.S. now under distribution. The management team of 5 has 93 cumulative years of experience in distribution. And we look forward to the opportunity to address Barrow Hanley into the intermediary markets and Trillium into the institutional consulting market.

Fantastic. Thank you, Chuck. So we've run out of time for questions live today, and thank you very much for all the questions that you sent through. If a question hasn't been answered or you do have one, you can e-mail them through to Perpetual Investor Relations team. And the e-mail address should be appearing on the screen now. And with that, I'd now like to hand back over to Rob to close out today.

Well, thanks, thanks very much, Amanda. And first of all, let me say thank you to everybody who's attended this session over the last now almost 2.5 hours. Thank you for your patience. A lot of people, a lot of presentations but a lot of capability there. So we really do hope that this morning's session has been of use to you. As Amanda said, she's very happy with any follow-up questions. Thank you to everybody for your questions that were flowing through thick and fast. We look forward to answering any outstanding questions you have. I do hope that this session has helped you develop a better understanding of Trillium, of Barrow Hanley, the build-out of our global distribution model under Adam and Chuck in the U.S. And hopefully, throughout the course of this morning or this evening, wherever you may be, you can see why we are so excited here at Perpetual about the opportunities that are ahead of us in relation to both our domestic asset management business and our international asset management business. And even more broadly, of course, the focus today has been on asset management and on those 2 important partnerships where we are equally excited about the ongoing opportunities in Perpetual Private and Perpetual Corporate Trust. As I said at the outset, our business today is even more diversified with even more growth options for the future. We are, as I said, thrilled to be partnering, both Trillium and Barrow Hanley. They are providing us with the opportunity to distribute world-class global investment capabilities with significant capacity in each of those capabilities to provide us with great growth opportunities into the future for many, many years. As I said at the outset, we will continue to be very focused on positive execution of our stated strategy, the 3 core pillars of client-first, future-fit and new horizons. We are genuinely excited about our growth prospects. And I would like to, once again, thank you for your time this morning, to wish all of you a very safe and happy festive season. And we look forward to speaking with you again in the near future. Thank you.