Perpetual Limited (PPT) Earnings Call Transcript & Summary

Good morning, and a very warm welcome to everyone joining us today for Perpetual's 2021 Investor Day. I am Susie Reinhardt, Perpetual's Head of Investor Relations, and it gives me great pleasure to introduce our speakers today. Before we commence, 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, to their culture and to their elders past and present. And I also acknowledge the traditional custodians of the various lands on which you will work today. In terms of today's agenda, we will shortly hear from our CEO, Rob Adams, who will provide an update on Perpetual's strategy. You will then hear from the executives of each of Perpetual's businesses, starting with Richard McCarthy, Group Executive of Perpetual Corporate Trust. Richard will be followed by Mark Smith, who leads the Perpetual Private business and then Amanda Gillespie, Group Executive of Perpetual Asset Management, Australia. Following Amanda will be David Lane, who leads Perpetual Asset Management International, and then we will provide an update from our distribution team led by Adam Quaife, Executive General Manager, Distribution. Adam will be joined by Chuck Thompson, Head of Distribution and Corporate Strategy, Americas. He will be joining us live from the U.S. Finally, Rob Adams will share some closing remarks, and then we will open up to Q&A. So we hope you find today's event informative. Please make sure to ask questions, and I look forward to any feedback you may have post the event. I'll now hand over to Rob.

Many thanks, Susie, and thank you, everybody, for joining us. Good morning or indeed good evening from wherever you may be joining us. We really do appreciate your time, particularly at what is usually a pretty busy time of year. Our aim today is to give you a good business update across all lines of Perpetual -- all business lines of Perpetual. As Susie mentioned, we're going to have a canter through each of our businesses. We're going to have a slightly greater focus on Perpetual Corporate Trust and our global distribution efforts managed by our Global Head of Distribution, Adam Quaife, given the particular interest in those 2 parts of our business and their importance to us going forward. As Susie mentioned, we will have an open Q&A at the back end of the presentation. So we welcome your questions on any topic. I'm certainly really pleased to provide our senior team with a bit more exposure to the market for you to see the quality of our senior executive team here at Perpetual. And of course, we're focusing on our business lines today. Our Chief Operating Officer, Amanda Gazal; our Chief Risk Officer, Sam Mosse, provide us with the operational and risk management framework to enable our lines of business to do what they do so well within sensible frameworks. And so we are really pleased to introduce everybody to the market again today. I do hope that the output that you see as a result of this morning or this evening session is that we are delivering positively on strategy. We have positive momentum across all of our businesses. And as a team, we are very confident of driving our growth into the future. So I'll provide a brief overlay in terms of our strategy and how we're running as a business before handing over to the team. You might recall that I first outlined our forward-looking strategy for Perpetual back at my first results announcements for the half in February 2019. The key components of that strategy were for us to better leverage our strong brand and our strong balance sheet at Perpetual. We were extremely keen and it was a priority for us to add world-class investment capability to Perpetual and to commence the build-out of a global distribution team for our Asset Management business. We also, for Perpetual Private, wanted to take advantage of the dislocation that was occurring in a post-Royal Commission world in Australian advice sector. And for PCT, Perpetual Corporate Trust, we wanted to further leverage PCT's strong market position to create new revenue streams over time. Since that time, we have completed 6 transactions at Perpetual, 2 transactions for each of our main business units. Each of these opportunities has created new revenue streams for Perpetual and provides us with new growth opportunities that we're executing on. And importantly, we have significant balance sheet strength to do more. Pleasingly, as I've mentioned already, we do have positive momentum across the board, and we feel that the forward-looking environment is well suited to driving growth at Perpetual across our lines of businesses. As you're aware, you've seen versions of this slide before, particularly at the most recent full year. We do at Perpetual have a unique combination of businesses. And through our Asset Management transactions over the last 18 months, we've created a new unit, Perpetual Asset Management International, which on the right-hand side of the chart is presented by the green bar, adding further diversity to what is already a diversified set of revenue streams, which importantly includes exposure to nonmarket-linked revenues predominantly through Perpetual Corporate Trust. If you compare the revenue profile as at 30th of June 2019, 2 years ago, some months after we first talked about our forward-looking strategy, to 30th of June this year, you can see the impact that our Asset Management acquisitions have had. And that is even when we only have [ 0.583% ] of a contribution from the Barrow Hanley transaction, which, as you know, was completed in November of last year. When we combine those acquisitions with our organic growth, these transactions drove our FY '21 UPAT to rise 20% -- 26%, I beg your pardon, over the prior corresponding period, whilst our NPAT reflected the one-off transaction costs and our return on equity rose slightly over the period. Importantly, the backdrop for each of our businesses is positive. We are operating in markets that have solid underlying growth, and our aim over time is to grow faster than market in every segment that we operate in. The global Asset Management industry represented on the left-hand side of the chart here, is expected to continue to grow, with ESG predicted to be the strongest contributor to that growth. In the middle of the chart -- sorry, the middle chart here, you'll see the Australian wealth sector, showing that adviser numbers will -- are expected to continue to decline sharply in a post-Royal Commission world. However, the high net worth and that is $1 million plus of investable assets, that sector is expected to outstrip the system growth. And for Perpetual Corporate Trust, the backdrop is also positive with the Managed Funds sector expected to grow at around 9% per annum. And the residential housing market, which we're using here as a proxy for the mortgage market, is predicted to grow at around the same rate. So a nice market backdrop to be operating in, again, with our expectation and our aim and our ambition to exceed that growth in each of our lines of business over time. Moving now to our strategy. I'm sure you will recall this strategy on a page that we presented back in 2019 for the first time. And I think we tend to refer to this strategy on a page each time we talk to the market. It describes our focus points to drive future growth that we expect from each of our businesses. Our purpose is enduring prosperity and our vision is to be the most trusted in financial services. You'll recall that our 3 core pillars, our client first, where we want to be really focused on contemporary delivery of contemporary products and outstanding service. Our future fit pillar is about the creation of an efficient platform that scales with growth and allows us to grow beyond our borders in a globally relevant way. And finally, new horizons, is all about extending our reach and adding growth platforms to the business. And as mentioned, our progress on each of these pillars has been strong. In this slide, I have pulled out some quotes from that February 2019 results presentation where I described some of the things that we were aiming to do as a business. And I'd like to give you a brief update in these 4 areas to let you know how we've been traveling. Back in 2019, I said that we wanted to deepen our client relationships and improve our client experiences. Since that time, as you know, we've now established a global distribution presence in the U.S., the U.K. and Europe. We have added around 35 additional globally relevant investment capabilities through the acquisitions of Trillium and Barrow Hanley. And despite the impacts of COVID and the difficulty that COVID creates in terms of communication and client relationships, we have still continued to produce through our clients a Net Promoter Score that is amongst -- would be the envy of many of our competitors of plus 45 and plus 44 over the last 2 years. Back in 2019, I said that we wanted to create a culture of innovation and empowerment of our people. We needed to be nimble and increase our productivity. You'll recall that since then, we executed an operating model review in the business. Importantly, we've relaunched our diversity and inclusion strategy, with a top-to-tail review of that important strategy. We've globalized, as I mentioned at the outset, our risk management and governance framework because we now are a global business. And we've designed future fit work places to really support people through COVID-19, but importantly, in the redefinition of the workplace post-COVID-19. And really importantly, particularly from the full year presentation for the year just gone, we are getting on the front foot more in terms of the recognition of our ESG capabilities, our ESG heritage across all of our divisions. Back in 2019, I talked about our desire to embed digital solutions and how we work together and how we interact with our clients. We've made some good ground there, more work to come, but we have partnered with global vendors such as Microsoft. We now have a Microsoft first strategy across our business platforms. We've launched myPerpetual, a new client portal for investors and for financial advisers. And in PCT, we've developed and launched the Fiduciary Intelligence platform that Richard McCarthy -- Dickie McCarthy will talk about it a little bit later, and he will expand upon the important business unit developing within PCT and that's Perpetual Digital. And finally, back in 2019, I said that we were going to identify and execute the right inorganic opportunities to deliver quality growth. I've already mentioned since that time, we've delivered 6 transactions, 2 for each of our business divisions in Asset Management, most notably Barrow Hanley and Trillium Asset Management. Priority Life and Jacaranda Financial Planning, the 2 transactions having a positive impact on Perpetual Private. And for PCT, our RFi Analytics was actually completed slightly before that February '19 announcement. I think it was December '18 from memory. And very recently, we just completed a really important transaction for us, and that was the acquisition of Laminar Capital. Again, Dickie will talk to that. So I think from across the board, that sort of positive progress is hopefully a good sign about positive execution of stated strategy. And that execution of strategy is now leading to positive momentum, as I've touched on across all of our businesses. I think most of these numbers the market's seen before, so I won't labor the point. Suffice to say that the extremely strong investment performance in our Asset Management business here in Australia has been a really strong driver for us. Amanda Gillespie will talk about that. And we were delighted as a result of that strong performance across asset sectors to be awarded the Fund Manager of the Year by Zenith, which is an exciting external recognition for the firm. Finally, I might just comment on the 40-plus new products, services and capabilities. I mentioned the majority of those new capabilities coming via the acquisitions of both Trillium and Barrow Hanley. David Lane will give you a good update about how those businesses are traveling. But it's also been great to see new services, particularly across Perpetual Private and Corporate Trust really adding value for our clients. Again, you'll hear more about that later on today. A brief comment from me on Trillium and Barrow Hanley. Again, David will provide you more detail here, but the performance backdrop of both businesses, when combined with our growing global distribution effort is really starting to make a positive impact. It's been terrific to see Trillium have consecutive quarters of record net flows, and we remain very positive about further delivery for Trillium. And Barrow's exceptional investment performance pretty much since the week we acquired the business. They've generated substantial alpha across all capabilities. That strong performance is starting to drive high interest across all equity strategies. And whilst we have been disappointed with the loss of some large U.S. fixed income mandates, we do feel very confident about the future growth, particularly across some of the global equity strategies and U.S. equity strategies of the group. Importantly, through these transactions, we've added substantial capacity for future growth. This next slide is trying to illustrate that capacity very briefly. Back in FY '19, 2.5 years ago, our capacity was constrained by our domestic capabilities. In FY '20 through the back end of that financial year through the acquisition of Trillium, our capacity grew from $70 billion to around $120 billion. And then, of course, through the acquisition of Barrow Hanley with their multiple capabilities, we've seen a substantial increase in the capacity of our investment capabilities across the board. And as we look forward into FY '22 and beyond with our strong balance sheet and our desire to add more investment capability in relevant areas, yes, we can see that capacity expand more over time. So a big runway for growth in our Asset Management businesses both here at home and offshore indeed, through PAMI, our International Asset Management business. Importantly, as we consider our acquisition opportunity, one area of focus for us is ESG. Across the board, we're thinking about ESG and how we manage people's assets and that privilege that we have and then the reliance they have on us to be taking ESG elements into account in our risk assessment across the board. We do already have a very strong ESG heritage across all parts of Perpetual. Some of these points I made at the full year, where you can see across each of our lines of business that we have a strong ESG focus in Perpetual Asset Management international, Trillium's 40-year history and Trillium ESG investing is unmatched. Barrow Hanley have been managing responsible investment mandates for over 30 years and have a proprietary ESG scoring system that they apply to every single security they hold. Perpetual here at home has been managing ethical portfolios for 20 years now. And we also apply here, whether it be our Australian equities team or our credit and fixed income team, we also apply a proprietary ESG analysis across every security that we're investing in or considering investing in. The chart to the right, it shows that 16% of our total assets under management of around $100 billion is -- that 16% of that is managed with specialist ESG lens. And the bulk of our assets are subject to a proprietary ESG analysis, which differs from business to business, meaning that less than 1% of our total assets are effectively on ESG -- sorry, ESG unaware. In PP, Perpetual Private is providing our clients across all segments with ESG advice and insights and expects to do more and focus more on that over time. And PCT is providing fiduciary services to the growing ESG segment, both here in Australia and internationally. So as you can see, ESG is fundamentally important across Perpetual and has been for many years. And as a corporate, we've got the same focus. Again, I won't labor all of these points. This is an updated slide, same sort of format from the full year, where, of course, we're heavily focused on enduring prosperity for our clients, for our people, for the communities in which we operate and for the environment more broadly. And I'll pull out maybe 1 or 2 points here. I think the external recognition people are giving us, whether it be PCT winning trustee of the year for the sixth consecutive year, Zenith Fund Manager of the Year Award, that external recognition is shows -- is evidence to us that we're doing good things for our clients. Our client advocacy teams expanded to improve the way we manage client complaints in people, focus on well-being for our staff during difficult times and our redefinition of the workplace is an important focus point, as I mentioned. For communities, our stretch reconciliation action plan is a big focus across the business. And we've just recently launched our modern slavery framework. And for environment, Trillium have just recently pledged to have signed up to the net 0 asset managers initiative, which is an important and exciting development for Trillium. So as you can see, we're very focused on enduring prosperity across each of our core stakeholder bases. And this focus will continue when we launch our corporate sustainability strategy early in 2022. So in terms of looking ahead, before I hand over to Dickie McCarthy, our focus point is all about continued execution of our stated strategy. We want to continue to build out our global distribution team. You'll see where we're up to today. There's always more work to do and a focus on having the relevant product frameworks across key markets, is certainly driving activity right now. We -- that activity itself will combine to drive improvement in net flows across all of our key business lines, not just Asset Management, but PP and PCT as well and for Asset Management across region and channels. You will see a further strengthening of our ESG capabilities across the board. We are very ESG-minded when we're thinking about new opportunities for Perpetual. And we will continue to seek to broaden our capabilities in Asset Management across asset classes, across channels and across geographies. We do have, with that in mind, a very active pipeline of high-quality strategic acquisition opportunities across all of our businesses. Okay. I think I probably outstand my welcome a bit folks. So I'm really keen for you to hear from our senior team. So with that, I'd like to introduce Richard McCarthy, who, as I've said, is known as Dickie. Dickie McCarthy is Group Executive for Perpetual Corporate Trust. Over to you, Dickie.

Thanks, Rob. Perpetual Corporate Trust, our vision is to be the most trusted fiduciary and the leading digital solutions provider to the financial services industry. We've started well. Our FY '21 profit before tax was nearly $64 million with a consistent and sustainable growth of UPBT over the past 10 years of 10%. Our funds under administration are $964 billion and a Net Promoter Score of plus 58 gives us very strong advocacy with our top 20 clients have been with PCT for greater than 10 years. And we've continued to develop over 20 years within our digital solutions capability. We're a market-leading business with scalable services. If you think about PCT, think about the critical infrastructure we perform across the entire financial services ecosystem with broad service offerings supporting significant volume. We processed 1.2 million of payments annually for the value of $387 billion. We have almost 4,000 bank accounts with over 20 banks. We have customer mortgage contracts in over 800,000 and we processed $500 billion worth of loan level data from the institutional client base through to our regulator, the Reserve Bank of Australia and make that data available to investors and intermediaries to support the standardization, transparency and comparability in the securitization market. We also have a unique business which collects and delivers insights and benchmarking on $2.8 trillion worth of retail loans across all asset classes. As you can see, Perpetual is at the heart of the industry, connecting the institutional clients through to the capital markets and regulators to help fund the real economy. Building a future fit business to support new service offerings is critical to us. PCT is a solutions-based business focused on delivering to customer needs today and into the future, while through our unique digital solutions, solving big industry challenges. Our Managed Funds Solutions business now is $359 billion. It has a holistic range of fiduciary services and agency custodian management solutions for the funds market, with unique cross-border capabilities via our Singapore business. Our debt market solutions business supports a very diverse range of clients across banks, nonbanks and fintechs come into market. Again, a very holistic range of solutions to help them be successful. And our digital solutions business has assets under administration of $3.6 trillion. And we're enabling the financial services market to become more effective, efficient and scalable while reducing the ever-increasing cyber risk through innovation and provision of our unique digital solutions. We have a very high-quality business that has continued to deliver strong earnings, focused on service excellence, product innovation and M&A to drive profitable growth. PCT delivered 50% profit growth in the 3 years since FY '18. And you can really see the benefits of acquisition through the TrustCo acquisition back a little while now, but if you think of that from a corporate point of view and what Rob discussed earlier around the new acquisitions, how much that can accelerate future growth. We have a consistent and sustainable year-on-year profitable growth across all our core services. We continue to strengthen our client relationships through service excellence and new products, which we can only be delivered to a large client base through that high trust in our brand, our people and service excellence. And with that, the creation of Perpetual Digital and then acquisition of Laminar Capital provides us those new capabilities and channels we can take for future growth. A trusted brand with an effective, efficient and scalable business for the future. Our Managed Funds Solutions business has been consistently successful in growing assets, delivering to clients as a very high-quality client base with a long tenure. We have very good strong tailwinds. The drivers of growth in industrial logistics and infrastructure assets is attracting offshore capital as well as domestic. The Singapore-listed REIT market is opening up after more than 18 months hiatus due to COVID, with the recent listing of digital core REIT data centers. A pure-play data center REIT sponsored by Digital Realty, a top 10 U.S. listed REIT with a market capitalization of USD 44 billion. The IPO portfolio consisted of 10 freehold data centers located in the United States and Canada with a firm of $2 billion. We have a large book of Singapore REIT client mandates, which are poised to issue in 2022 across a broad range of asset classes, including commercial, logistics, health care and retail. Our Australian listed markets are also looking positive, with increased mandates for listed investment trusts and active ETFs and ETMFs. We have a very large existing book of clients in our custody business, looking to deploy capital via their structures with Perpetual Corporate Trust. The MFS business is poised for growth through those very strong drivers of growth for the future. As we said, we've got a great book of clients from global fund managers like JPMorgan, Aviva, First Sentier, to Canadian Pension Funds, Sovereign Wealth Funds and large domestic managers like Metrics, all clients of MFS. Our Debt Market Solutions business has now $605 billion of funds under administration and over 250 clients, with revenue of $75 million. And you can see the consistent sustainable revenue growth being delivered over the past decade. Again, as Rob mentioned at the beginning, we have some very good tailwinds and drivers of growth. The Australian housing market has now surpassed $9 trillion, with increasing growth across other asset classes such as payday and auto lending. The nonbank sector, a critical sector for PCT, continues to increase market share and now accounts for 7% of all debt financing. DMS broad product offering enables all sectors of the market to be successful. And our long-standing client relationship with that strong tenure and strong advocacy enables us to go to clients with new products because they have great trust in our business and brand. And that's where we leverage our large and diverse client base to cross-sell Perpetual Digital products, including 4 client mandates we have for our new Treasury and Finance Intelligence product being launched in second half 2022. And that's a great statement where we have 4 very good client mandates for a product, which actually hasn't even gone to market yet. So we're very proud and we're very cognizant of the trust our clients have in us to continue to deliver to them. Again, a very strong activity in the nonbank sector, which is driving growth within the DMS business. We saw huge growth in the nonbank sector in 2021 across a whole range of clients and asset classes. But also, we also saw the bank markets start coming back to utilize securitization as a funding mechanism for their business post the closure of the TFF with the RBA. And we see that continuing going forward. The digital world. Significant technology challenges is facing the financial service industry. There are real headwinds in this industry for the entire sector. Perpetual Digital is a fintech, RegTech business with unique digital solutions to solve these industry challenges. Everyone is looking at replacing their legacy technology because the cost of running it and the risks of running it is no longer sustainable. The regulator is demanding it. Through new regulations and the increased risk of cyber security is aligning to the challenges the industry needs to face. Solutions for big data are looking to be solved for. All industries, all executives, all business, all directors are looking to make data-driven decisions. To do that, you need the foundations and the ability to manage big data. Perpetual Digital solves that. While improving the efficiency and scalability of our business and our clients' business as often spreadsheets become a key component of core operating systems with significant data manipulation required and high risk. That's the opportunity in front of us. Our digital journey has been going for 20 years. We have continued innovation and acquisitions, which provides us that unique opportunity to be the leader in the digital solution space to solve these industry challenges. In 2015, the RegTech data services solution for the RBA reporting for the entire market was sold for by Perpetual. We then look to acquire a unique business in the Roundtables to provide unique insights and benchmarking. And we developed our cloud solutions of Perpetual Intelligence. Our Intelligence Platform as a Service, credit risk intelligence product went live in 2019. And now we've acquired Laminar Capital, and we've got Treasury and Finance Intelligence products to be launched in 2022. It's an exciting time for us. And then you can sort of see in the far right, Project Atom. So we were proud to be a partner with the reserve bank and industry to complete a wholesale central bank digital currency research project, Project Atom. The Reserve Bank of Australia, Commonwealth Bank, National Australia Bank, Perpetual, and ConsenSys, with input from King & Wood Mallesons, jointly released a report yesterday to mark the successful conclusion of Project Atom. The proof of concept, CBDC's syndicated loan platform introduces automation and workflow while eliminating manual steps, which creates significant operational efficiencies for each party and across parties to a transaction. Perpetual Digital is at the cutting edge of innovation in this country. Product innovation and acquisitions has delivered double-digit revenue growth for digital solutions over the past 10 years. We have moved from a DMS trustee and investor reporting adjacent product to new products being launched, we're at the center of the market, creating the Australian data warehouse for regulatory, investor and intermediary reporting, followed with the acquisition of Roundtables and the launch of our Perpetual Intelligence product, Credit and Risk Intelligence. And these numbers don't include our Laminar acquisition and our Treasury and Finance Intelligence products, which commenced in FY '22. DAS revenue has grown 60% from FY '19 to FY '21, and we only see future positive momentum in that business. Perpetual Digital provides a unique suite of digital solutions to enable clients to manage the technology challenges we outlined previously. Perpetual data services is unique. It is the Australian data warehouse. Similar to the European data warehouse in Europe, providing the regular reporting, investor reporting and intermediary reporting in 1 single solution. Our Roundtables business is another unique business with a unique data insight and trusted by the market to provide benchmarking and insights to $2.8 trillion worth of assets. Our intelligence platform continues to develop and innovate new products to meet our clients' needs today and in the future. Now Laminar Capital business has a Platform as a Service and services, which helps enable the treasury debt markets -- market. So let's have a deeper look at Perpetual Roundtables. Peer-to-peer forums which really enables strategic, data-driven decision-making by senior managers in the banking and financial services industry across all parts of the economy, commercial lending, credit cards, mortgages, personal loans, auto finance, both in Australia and in New Zealand. We are an industry leader with 15 programs and 20 years of history. It's industry-led and it provides on-hand executive reporting and unique insights and benchmarking across peer groups and industry, which is unique to Perpetual, and us as a trusted independent brand as the custodian of this unique data set. We also provide online analysis platform for real-time access. Our Treasury and Finance Intelligence business is hugely exciting. We are now starting to integrate new products to enable our clients' success with trust management, cash flow/waterfall and funding optimization/pool selection for future transactions, while integrating into our regulatory reporting analytics and creditor risk analytics solutions. The funding optimization and pool selection can actually take up to a week to put together a multitude of spreadsheets e-mailed across the market, across the country, across the globe, which now can be delivered in 1 single solution in 1 cloud environment through automated modeling in seconds. Let me just take you through a video, which explains it in more detail. [Presentation]

We've had some great early adopters of Perpetual Intelligence from fund managers to major banks to the largest of the nonbanks to the new fintech lenders of Nano and Athena. We're hugely excited about the prospect of Perpetual Digital, when we think of Perpetual Digital is designed to solve industry challenges. Laminar Capital. The acquisition really provides the holistic suite of digital solutions and services to help solve those industry challenges and really enable our client success. Laminar Capital really specializes in cash and term deposits for time for CFOs and treasurers across entire industry. It has a very large ESG focus for our middle market investors, and there is no single source of easily obtainable information yet. Developed in partnership with ISS, we actually now have a proprietary ESG scoring solution, which is integrated into Treasury Direct to further deliver value to clients, both on the issuer side and the investor side. The solution is aimed at solving 2 issues: one, providing easy, accessible frameworks for our investors and clients; and providing an ESG and carbon risk score for the public and mutual bank sector to enable future access to funding as investors embrace the ESG factors. Laminar Capital's digital solutions and their great service offering, in addition to this ESG proprietary scoring, really provides a holistic set of digital solutions, unique to Perpetual and unique to Perpetual Digital to basically meet our clients' needs today and in the future and to solve industry challenges. So in summary, we have a high-quality and market-leading business. We have exceptionally strong client advocacy and a trusted brand. Our positive growth across all aspects of the business while investing in digital capabilities and actively developing new products, some of which we've shown you today are being launched in Q1 2022, and a further pipeline of M&A opportunities. And with that, I'd like to hand over to Mark.

Thanks, Dickie, and good morning to you all. Great to be here today. So we're about to go through the Perpetual Private business and talk about some of the key milestones that's achieved and spend some time on the strategic initiatives that have been going on across the business over the last couple of years, as well as talk somewhat about our future initiatives that we are undertaking. Starting with the Perpetual Private business overview, it's a highly respected and trusted, high net worth business in the Australian marketplace today, with some $18.5 billion funds under advice. Importantly, we specialize in some very unique areas of a high net worth market. Our philanthropy, our advisory, our fiduciary and also our accounting and very importantly, the investment research of the business are all key components that make up Perpetual Private overall. We have a proven track record and now over some 8 years of delivering strong inflows across our business and continued growth in our particular areas of specialization. In terms of the business itself, it is highly differentiated from other high net worth businesses in the Australian marketplace. And that really comes about in 3 main ways. The first is our specific highly specialized segments that we focus on in the high net worth market that allow us to know more than a lot of our clients about those segments and how to operate in a very efficient, tax effective and value-accretive way. Be it across philanthropist, the business owner segment, medical, Native Title, high net worth established wealthy clients and pre-retirees, we specialize and no more, as I said, than many other clients in these segments and many other markets. Our wealth journey, which you can see there in the middle of this chart is also a key differentiator as well. When we think about our clients, we think about the way they've accretively added value to their portfolio and to their families portfolio over time. And in many cases, that starts with their own corporate journey. We have the skills and services and capability to start with them and align on that corporate journey. And as the business crosses over and becomes more successful, we can focus in particularly on the actual personal value that's been added to the portfolio and provide significant services for them to add value to their families and personal history over time. The third key area where we differentiate is the sheer extent of our services, which fundamentally differentiates us from any other high net worth business. Our services are truly cradle to grave and in many respects, beyond that in the actual philanthropic services that we can provide today. What that means is that we have very strong significant NPS results coming through from our clients. They are highly sticky to us. They see the value of being with us for the long term overall. And in many respects, our staff that are part of the organization do better and are able to provide greater value to their clients than not what they could if they were with any other organization in Australia today. You see some of that differentiation continuing to play out in the community and social segment network. Perpetual Private is a key link in the chain in between philanthropy, not-for-profits and social giving in Australia today. And that ends up with us having now over some 900 clients in not-for-profit, a book of over $3.6 billion that we run in terms of advice and impact giving in one of the largest and most sophisticated impact giving programs in Australia today, with some $3.6 billion now under advice. And of course, our early segment investment in Native Title has meant that we've taken the lion's share of the Native Title market in terms of fiduciary, investment and advisory services, and that will continue to grow. Again, the NPS in all this is highly significant. And as a result of that, we can see that -- and I'll now -- I'll now turn to a video with 1 of our clients to show how that NPS comes to real life. [Presentation]

And these are the everyday stories that we actually have going on in our business with our clients and the value and the purpose that we can truly add to their lives and their overall aspirations and be it a professional, be it a business owner, be it a medical specialists, be it a community, we're actually there and providing their aspirations and meeting their aspirations with the longer term. Now looking to some of the longer term trends that are occurring in the marketplace right now. We would argue Perpetual Private, but in terms of participation, is actually in the highest growing areas of the marketplace today. That high net worth segment, that Rob talked about earlier today, is by far the largest growing segment of the market. And the numbers that are before you right now are actually pre the asset value growth that has occurred over the last 6 months where, frankly, investors are feeling more wealthy than they ever had before based on the property growth and the growth in share markets that have occurred over the last 6 months. Those fast-growing segments of the high net worth market are actually being also propped up by the number of clients that are actually moving out of that subsegment of $500,000 to $1 million. A lot of that is what I would call the pre-retiree market, and it is actually shooting up into the $1 million plus category of the marketplace at an accelerated rate right now. And we are participating in that growth in -- given our service offering and what we have in place today. The intergenerational wealth side of the business has been something that's captured a large segment of attention, particularly in the AFR over this week, and I saw another couple of articles today. One of those articles quoted a number of around $100 billion of wealth transitioning between the current segments of the market and millennials. And that would really be in line with what we see within our Perpetual Private business on a day-to-day basis. We actually have within Perpetual Private, one of the largest will banks and executive power businesses in Australia today, and we're involved in this intergenerational change on a day-to-day basis. What we would see from our numbers is that for every dollar that passes to another part of the family, approximately 50% of that money is usually utilized to pay down debt, but the other 50% is actually investable and that is where the growth for advisers actually occurring from in the Australian market today. We would see in any 1 year a pipeline north of $100 million in terms of new funds under advice coming from that intergenerational change within our existing client base. And as I say, we continue to expect that to grow over the near term. We're also seeing, from a market perspective, the macro side of a reduced reduction in the total number of advisers in the Australian marketplace. And that's being caused by the qualification changes and accreditation changes that have been -- that have come in place through government law over the last couple of years. So over the last several years, we've seen about a 12% reduction in the number of advisers in the Australian marketplace. At the same time, Perpetual Private through its professional services model that we invested in, and also through the adviser growth strategy is actually growing its number of advisers by 30%. Now we don't necessarily think we'll see that same 30% growth through lift-out over the next period of time. But we do expect the growth to continue within Perpetual Private at a steady rate. And that's as a result of advisers being attracted by a highly qualified partner-based model to our model as a belief that they think they can do better and perform better with the services, an offering that we have versus many other providers in the Australian basis today. So we do see that as a rather large growth opportunity for us moving ahead with time. So when you look at all this and you think about our strategic intent and what we've actually put in place over the last number of years, we've had some pretty handy net flow growth numbers coming through. And that's been really the result of some of the strategic initiatives that we've had going and I've talked about today. The professional services model, the adviser growth strategy, which we've nearly met our stated objective of greater than $1 billion for the total strategy to be put in place. We've now surpassed the $900 million mark, and we'll crack through the $1 billion mark shortly in the new calendar year. So it's very pleasing to hit that milestone. Certainly, on top of that, the Priority Life business has been a great addition to the Perpetual Private business. It's included some 2,500 medical specialists within that business. It did see lower growth in the last year as a result of COVID and the fact that our medical conferences were not running as strongly as what they normally are. But it's already really bouncing back, and we saw that in the last quarter. And we see the opportunity for an extension of services as our clients just talked about before to those medicals over the near to long term. So we have seen quite a bit of growth continuing to come through the portfolio as it stands today. And then when you look about it, when you think through it as well from the extensions of services, we have a lot of new initiatives that are starting to kick off. The first of that is clearly the family office that we have lifted out and brought into the business. Their pipeline is building out well for future years. We obviously had the acquisition of Jacaranda, which has been a strong part of our pre-retiree segment growth that we're looking at right now. In combination with Dickie and the work in acquiring Laminar, that provides a significant opportunity for us to extend out the services to our not-for-profit market, in particular and the aged care segment, who are deeply requiring a treasury solution and thinking about their short- to medium-term cash and debt security needs and the way they actually manage for that. There is a real opportunity between Dickie's business, Laminar and Perpetual Private to expand the level of clients and services that we provide to that market moving ahead over time. Turning to the Jacaranda business. We've been thrilled with Jacaranda coming on board in August of this year. We find ourselves in a very strong position with the licensee transition due to complete sooner around the January '22 date, and we are ahead of plans and expectations in terms of the size of that business, having acquired it at some number around $930 million of funds under advice. That business through organic growth as well as market increase has now surpassed the $1 billion mark. And we've been very impressed with the seminar work that's continued even through the COVID period there and a strong demand for the Jacaranda services moving ahead. So we've got good expectations for the Jacaranda business and future growth over the years that are coming from here. So just to sum up. Perpetual Private is well positioned for the tailwinds that are in place in the high net worth market today. We have a significantly differentiated set of services, products and segmentation knowledge that we think are going to contribute to continued growth in net flows and revenue growth over the years ahead. And with that, I'd like to turn over to Amanda to talk more about the Perpetual Asset Management business in Australia.

Thanks, Mark. Well, thanks for the opportunity to provide an update on Perpetual Asset Management, Australia, or PAMA, and some of the key strategic initiatives we are prioritizing. PAMA finished the September quarter with $25.5 million in assets under management, accounting for around 25% of group assets under management, an underlying profit of $42.2 million. We finished FY '21 with positive momentum from both the fund performance and flows perspective. And pleasingly, that momentum has continued into FY '22, where we posted a second consecutive quarter of positive net flows. In October, as Rob mentioned, we were thrilled that PAMA was announced as Fund Manager of the Year in the Annual Zenith Awards. This award publicly validates the steadfast commitment to remaining true to label across our investment teams and also excellence across multiple capabilities. It highlights the dedication and expertise of our investment teams in delivering strong outcomes for our clients while navigating what everyone would say has been incredibly unprecedented times and reinforces the importance of active management in client portfolios. Just last week, we launched the first of our suite of active ETFs on the ASX, an ESG-focused Australian equity fund and have further launched as planned very soon, in fact, next week. This is a key initiative for us and supports the delivery of contemporary products to meet the needs of our clients, and I'll touch on this in a bit more detail later on. Looking ahead, I'm really excited for the opportunities and initiatives that we have planned. Importantly, we are leveraging more than 50 years of investment experience, a diverse set of more than 25 investment strategies. And combining this with our strong brand and industry-leading distribution to continue building scale and growth across the division. Turning now to the investment capabilities across PAMA, and I thought it was important to highlight the breadth of capability that our Australian-based investment teams are managing on behalf of clients. We have 38 investment professionals across 4 teams. We're well known, of course, for our heritage as 1 of the longest-standing active Australian equity managers. And PAMA continues to be 1 of the largest teams in the market, with more than 15 investment professionals headed up by Paul Skamvougeras. We truly believe there isn't any substitute for experience. Cycles and market crisis will come and go, but the process has continued to stand the test of time and deliver for our clients. We offer a breadth of specialist capabilities within the Australian equity capability set. And we're seeing interest, particularly in our niche capabilities, where investors are really prepared to pay for active skill. This includes long/short, absolute return, ethical or ESG and small caps. No doubt, it's been a challenging few years for active Australian equities, but we're seeing a gradual improvement in flows from advisers, and the trend has been getting better for a while now and net flows are reducing considerably -- net outflows, sorry. Turning to multi-asset and the capability is award-winning and highly rated, having won the Zenith Real Return Manager for 3 years running. We have a team of 7 headed up by Michael O'Dea. The team's experience is diverse and includes hedge fund and options expertise, and it has been externally acknowledged as one of the most experienced in the market. Our multi-asset offering provides investors exposure to a wide range of investments across asset classes. We actively manage these investments to deliver consistent return outcomes, with a focus on managing for the downside risk and ensuring real growth above inflation. PAMA's credit and fixed income team is a pioneer in Australian credit with our head of the team, Michael Korber, having launched the first corporate bond fund in Australia in 1997. The team offers a range of highly active products that intentionally leverage our strength as a specialist in credit. We offer rich product across the spectrum from enhanced cash through the core defensive fixed income all the way up to income and return-generating unconstrained products. This capability set positions us well, and we're tapping into a number of key market themes, particularly the demand for alternative sources of income, the demand for unconstrained credit and also the increasing importance of ESG. And finally, our Sydney-based global equity capability is represented by the Global Innovation Share Fund. This team is a team of 4 headed up by Thomas Rice and is focused on offering a hand-picked concentrated portfolio of global stocks that are tapping into thematics of innovation and change. We've just ticked over a 4-year track record for this fund, and performance since inception has been very strong at more than 11% annualized outperformance. We've organically grown the assets under management to more than $130 million. And then it's having a particularly strong appeal from the family office and high net worth market. And we'll be soon, actually next week, launching this capability in an ETF structure. So the result of this is a suite of capabilities across asset classes that most critically is enabling us to have solutions-based discussions with our clients and importantly, be able to tailor outcomes to meet their particular needs. Over the past year, we've delivered strong performance and outcomes for clients. You can see on the left here that in terms of assets under management, PAMA has $25.5 billion, spread predominantly across credit, fixed income and equities. Within this allocation, we also managed $3.6 billion in multi-assets across both traditional and contemporary real return capabilities. Pleasingly, more than half of the assets under management in multi-asset is now in the growing real return space. And we've been seeing positive flows and strong client interest across both the institutional and wholesale channels. We're also now managing around $2 billion in specialist-dedicated ESG spread across asset classes, and we've seen that grow significantly over the last year with the launch of our ESG Real Return Fund. A critical pillar of our strategy, as Rob mentioned, is client first and delivering to the needs and expectations of our clients. So pleasingly, we have been able to do that with strong performance across the board. Over the past 18 to 24 months, in particular, as you can see on the right-hand side here, more than 96% of our funds outperformed over the year to September, and 92% of them are in the first or second quartile. In particular, it's been fantastic to see the strong results from Australian equity funds after a long period where growth styles have been dominating the league tables. That said, performance has been strong across all asset classes. And I would specifically call out credit and fixed income where we have delivered consistent performance above the benchmark over all time frames. The priority now for us is to remain vigilant and true to our active approach and to ensure we continue meeting the expectations of our clients. Turning now to the strategic priorities and a key focus for us looking ahead is to leverage our expertise across asset classes to deliver solutions that address current and importantly, future needs of our clients. In terms of our product development focus, we're tapping into a number of key themes. The secular demand around income, which I mentioned, retirement and ESG as well as the desire for investors to access -- to have easy access to investment capabilities. In an exciting milestone for Perpetual, just last week, we launched our first active exchange-traded managed funds to the market. The fund we launched has the ASX code GIVE and is a listed class of our long-standing ethical Australian Share Fund. GIVE positions us in the growing ESG sector and also fills the market gap, as there are actually very few actively managed Australian equity ESG ETFs available for investors. And quite unique to give as well is that we will be contributing a portion of any performance fee to charity. PAMA's debut into the ETF space expands choice for investors who are seeking exposure to a portfolio of actively managed shares backed by experience and specialist investment teams. More to come on this front. And as I mentioned, we'll be launching our second ETF to the market next week. Another key priority in terms of contemporary solutions is real return investing, and it's been a key initiative for us, which we see meets a critical need from clients, particularly those approaching and in retirement. Our real return offering focuses on delivering outcomes that provide growth and a hedge against inflation while also protecting downside risk and particularly for retirees, helping to manage against sequencing risk. As I mentioned at the outset, we're now managing around $2 billion in real return strategies and $930 million of that is in our flagship Diversified Real Return Fund, and now just over $1 billion is in our new ESG Real Return Fund. Our flagship fund is now the second largest real return strategy in the market and across the peer group and has seen the strongest net flows by quite margin. The recent launch of the ESG Real Return Fund earlier this year was a fantastic example of working in partnership with the foundation client and leveraging our suite of capabilities to be able to deliver a client-led solution to market. Momentum in this space is continuing to build, and we're having some great conversations with other institutional clients. And thirdly, I mentioned already our heritage in credit and the specialist expertise that we have in this space. To further extend our reach into the specialist credit space and the demand from investors for alternative sources of income, we're looking to offer a private debt capability to market next year. We have an existing track record both in private loans and securitized credit and 2 dedicated portfolio managers who are both specialists in this field. We believe private debt provides significant opportunities for experienced credit managers and you'll hear more from us on this front looking ahead. Another key strategic initiative this year has been to ensure we are fully leveraging our industry-leading brand. This has meant renewed investment from us in refreshing the positioning of some of our core capabilities through new marketing campaigns. On the right-hand side, you can see here, we took -- undertook a campaign showcasing our credit capability and specifically focusing on our diversified income fund. This campaign has proved very successful and has contributed to the strong flow momentum we're seeing year-to-date. And importantly, these flows have been coming from a wide client base. More recently, we also launched our Perpetuality Campaign, which was focused on promoting Australian equities and really aiming to reinforce the depth and uniqueness of our process and also capitalize on the strong performance that the team has delivered and the renewed interest from the market in value investing. Again, this campaign has far exceeded our targets in terms of qualified leads, and I think we're now up to around 1,500. While it's early days, we're optimistic this will help to support flows looking ahead. These campaigns are aimed to drive strong engagement with the advice channel, where we have a wide existing footprint. A dual objective has been to connect with a wider market and, in particular, drive a stronger presence in the direct retail channel. Given the strength of the Perpetual brand and how it has already resonated so strongly with the direct market through these campaigns, we certainly plan to do more on this front. This also ties in nicely with our ETMF launches, which have relevance and appeal to direct investors. Looking ahead, we believe successful asset managers will require a suite of solutions to be able to meet the varying needs of investors. Pleasingly, we now are able to offer a diverse global equity capability set to the Australian market. We continue to see strong demand in Australia for global equities. On average, we've seen around $16 billion in net annual flows over the past 3 years into the wholesale channel across the market. And importantly, of the top 5 managers, 4 of those are active and only 1 is passive. Flows have tended to actually be dominated by a narrow view in the peer group. And a number of these managers are either getting close to capacity or dealing with their own performance headwinds. So there's a significant contestable market in global equities for high-quality active offerings. And so pleasingly, PAMA is now well placed with a strong lineup across innovation, global value and ESG to contest this space. I spoke earlier about our Global Innovation Fund, which now has a 4-year track record and strong performance. We've received inaugural ratings for the fund and platform penetration has been really expanding, and we're now up to 9. And organically, we've grown the fund to over $130 million, and we're seeing particularly strong demand from the high net worth and family office channels. Following our acquisition of Barrow Hanley last November, we rebranded the existing Perpetual Global Share Fund to the Barrow Hanley Global Share Fund. We're well placed in terms of existing market footprint as we already have a wide platform penetration for this fund. And we're seeing good flow momentum already and strong interest from clients, particularly those looking to leverage the improved sentiment towards value. And thirdly, but certainly not least, Trillium has -- it's been fantastic to be able to bring a pioneer in ESG investing to the Australian market. And as we've previously mentioned to you, we launched 2 Trillium's funds into the Australian market last August, a Global Equity Fund and a Global Sustainable Opportunities Fund. Since that time, we've seen strong since inception performance and having some great conversations with clients. One of the other key strategic priorities for us continues to be our focus on ESG, and we're accelerating what is a long-term commitment to ESG. PAMA's journey with ESG actually began 20 years ago with the launch of the Ethical SRI Fund. And we've accelerated that development and importantly, build out a diversified ESG offering across all asset classes. As you can see from this chart in the text in blue, the different products we brought to market are actually across different asset classes, and you can certainly see an acceleration in that product launch over the last 3 to 4 years. In addition to products, I'd also call out the heightened focus we are placing on research and investment perspective and the key initiatives such as the ESG workbook in Australian equities and the ESG risk scores in credit to further embed and integrate ESG into our process. We expect ESG to remain a focus and a priority and in particular, looking to further support this through investments in data. So wrapping up, and I hope that's given you a good sense for where PAMA sits today and importantly, the opportunities we're leveraging to deliver growth across the business. Our priority remains focused on delivering world-class capabilities to investors supported by a trusted brand and the industry-leading distribution. Clients remain at the core of our strategy, and we're pleased to have been delivering strong performance outcomes for those clients. We've renewed investment in our brand and based on the success of these campaigns, we'll certainly continue to do more as we move into 2022. We're listening to our clients and responding with contemporary solutions across ETFs, real fund and specialist credit. I haven't covered it in a lot of detail today, but as Rob mentioned, we have an active M&A pipeline across each of our businesses. And within PAMA, we've been managing that pipeline and have been looking at and probably looked at more than -- more than a dozen over the last year. We continue to see opportunity to further leverage and -- sorry, to further leverage the investment platform, and we will be looking to add complementary capabilities and we'll continue to explore opportunity. ESG has been and remains a foundational aspect for PAMA over the last 20 years, and we only see this accelerating further as we look ahead. So in summary, look, I'm really excited for the next stage of growth. We've got a lot happening across the business, and thanks so much for your time today. I'll now hand across to David.

Thanks, Amanda. And good morning or good afternoon, everyone. Perpetual Asset Management International, or PAMI as we call it, was formed as a new division of Perpetual 13 months ago. With the acquisition of Trillium and Barrow Hanley, both of which have been investing on behalf of their clients for over 40 years, PAMI now has in excess of $75 billion of assets under management. Last fiscal year, PAMI had $40.7 million of UPAT noting that we acquired Barrow Hanley in November. So PAMI's UPAT represented only 7 months of Barrow Hanley ownership. Our strategy is to buy world-class asset management businesses with globally in-demand strategies and significant capacity and marry them with our growing global distribution team. To this end, we are already have an excess of $330 billion of capacity in over 35 strategies, and a global distribution team of 81 people, which we expect will continue to grow. So where are we? How are we traveling and where do we see PAMI going? Let's start at the time of the respective acquisitions. Trillium had one distribution person and was domestically focused in the U.S. Trillium sales were largely driven by its high net worth advice team and client referrals. In fact, with an historic NPS score of over 80, which for comparison purposes, is higher than that of Apple, clients would literally ask for marketing materials to use in discussions with their friends. Turning to Barrow Hanley. They had a distribution team of 31 people, which was largely focused on the U.S. They relied on their former parents limited and declining distribution capabilities outside of the U.S., and they had no Barrow Hanley branded mutual funds. Since acquisition, we have made a number of changes, which positioned Barrow Hanley and Trillium for success. We have repointed Barrow Hanley's distribution team to report to Chuck Thompson, who you'll hear from later, who is our Head of Distribution and Strategy for the Americas. We received the U.K. authorization from the FCA, which is the U.K. regulator, and we established a distribution business to service institutional clients in the U.K. and in the Middle East. We hired Jan Hein Alfrink, who has 25 years of experience of senior leadership in distribution roles across Europe, and Jan is now running our European distribution business. We also established the European headquarters based in Amsterdam and are applying for a European MiFID license to support Jan and his growing team. We have established the Trillium ESG Global Conviction Fund, which has outperformed its benchmark by over 3% to the 30th of November since its inception on the 30th of June. Finally, what do we aspire to be? We expect to have relevant product structures for our clients across the globe, recognizing that globally in-demand strategies require local product wrappers, whether 40 Act funds in the U.S. or UCITS in Europe and Asia. We will add new investment capabilities, whether organically or inorganically to meet our clients' needs. We will support this growth with the expansion of our global distribution team which can support new and existing client channels with solutions-based discussions. In short, we are building a truly global asset management firm. Both businesses have grown ahead of our internal acquisition expectations with Trillium growing exceptionally fast. Performance across both boutiques has been strong across 1, 3 and 5 years, which gives us great optimism about the continued momentum. Importantly, both businesses are and will benefit from our product and distribution efforts. We are already seeing this growth over the first year of ownership. As you all know, ESG is the fastest-growing segment in asset management. To put this in context, flows to sustainable funds in the 5 years from 2015 to 2020 have grown faster than Amazon's revenues grew at its peak growth of 5 years from 1998 to 2003. Global ESG assets are expected to reach $53 trillion, that's a big number, $53 trillion in 2025, representing 1/3 of the projected USD 136 trillion market at that time. And closer to home, Trillium has grown by 56% since acquisition, reflecting this trend. Asset management companies focusing on ESG are being rewarded by their clients in terms of flows and the markets in terms of price to earnings multiples. As evidenced by the multiples afforded to ESG specialist firms such as Impax, which is listed in the U.K. and Australian Ethical, which is listed on the ASX. While ESG has been building significant momentum globally in recent years, Trillium has been exclusively focusing on integrated ESG for 40 years. In fact, it started focusing on ESG and its founding in 1992 and incubated industry funds such as -- or industry advocacy bodies, I should say, such as U.S. SIF and Series within its offices. Trillium was the fourth signatory to the UN PRI, has been running fossil fuel-free strategy since 1999 and recently signed the Net Zero Asset Management initiative. Less known, however, is the store of Barrow Hanley, which began managing socially responsible investments in 1988 on behalf of their clients. And as of 2019, Barrow Hanley had incorporated proprietary ESG scoring across all of its securities. Effective distribution requires the ability to package strategies into locally in-demand products, which is what we are doing across the globe. In the U.S., we have established a registered investment adviser and will launch 2 new Barrow Hanley branded 40 Act funds this year. We have engaged SEI to support the launch of these and other 40 Act funds as well as separately managed accounts and ETFs. This will allow us to access the large and growing intermediary sector in the U.S., a sector which has 400,000 financial advisers as compared to Australian 16,000. And this sector alone in the U.S. has 36 trillion of assets under management or more than 12x that of the entire Australian market. We will support this effort in the intermediary sector, with 35 additional sales and support people over the coming 5 years, and we're going to use data, social media and technology to focus on the most appropriate financial advisers and their clients. This incremental investment in our U.S. intermediary channel strategy comes with incremental flows, making the business case for additional investment quite straightforward. We're also taking advantage of Barrow Hanley's top quartile ranked bank loan and high-yield team to launch a series of collateralized loan obligations or CLOs, the first of which is going to be launched in the second half of fiscal year '22. In the U.K., we are establishing a usage umbrella fund based in Dublin and plan to launch 4 usage products in the next several months. It's right the importance of having both the right products and the ESG trend. One of the usage will be seeded with $500 million by a new Scandinavian client, who wanted a global value equity ESG strategy in use format, and we're creating that for them to meet their needs. In Australia, the 2 trillion funds, which were established shortly after acquisition, have already raised in excess of $230 million in AUM. In addition, we raised about $100 million since the acquisition of Barrow Hanley for the Barrow Hanley Global Equity Strategy by Australian domiciled investors. In summary, we are establishing a global platform, which will position us for long-term success. Now I'd like to turn it over to John Quealy, the CIO of Trillium and Brad Kinkelaar, Portfolio Manager for Global Equities at Barrow Hanley, who will give you their perspective on how we are all working together on future growth.

I'm Brad Kinkelaar lead Global Portfolio Manager for Barrow Hanley Global Investors.

I'm John Quealy, Chief Investment Officer at Trillium Asset Management. So as I reflect on 2021, a few key observations come to mind. First, it's been a very exciting and productive year for all of us at Trillium. From a performance perspective, our results have been encouraging through November. While equity and fixed income markets remain volatile and frequent fluctuations in style and tenor can act as headwinds, our portfolio management and investment analyst teams have prudently and modestly made adjustments to portfolios to protect and grow client assets.

As we reflect on 2021, clearly, we saw a resurgence in value term performance. As a true traditional value manager, Barrow Hanley certainly benefited from that resurgence of performance since the depths of the COVID crisis. With this resurgence, 85% of Barrow Hanley's strategies are now outperforming our value-based benchmarks over a 3- and 5-year period. Interestingly, the biggest predictor of a value managers alpha generation over that time period has been their exposure to technology stocks. Unfortunately, Barrow Hanley has been underweight technology the entire time. We've been wrong. But importantly, what that means is that in contrast to many peers, Barrow Hanley's alpha generation has been driven by individual fundamental stock analysis across the spectrum rather than being driven primarily by 1 sector. So our alpha generation comes from a different source and is very complementary to the alpha generated by most of our competitors.

We were very excited earlier this fall to announce an ambitious net zero in energy transition strategy. At September 30, 2021, across Trillium's equity strategies, we are 58% less carbon intensive than our constituent benchmarks, with portfolios aligned with 1.6 degree Celsius implied temperature range. We're quite proud of the high bar, and we believe sets a distinct competitive advantage in the responsible investing marketplace. Secondly, as is core to our mission, our specialty advocate team has been focused on impacts on behalf of our clients throughout all of our portfolios. During the past year, the advocacy team has engaged 1,000 campaigns on behalf of clients to improve the environmental social profiles of our companies and we're pleased to announce several positive successes and wins as part of that campaign in the back half of calendar 2021. Last, I was personally very excited to formally introduce our newest product, the Trillium ESG Global conviction strategy based in Edinboro to the financial community at COP 26 in Glasgow, just a few short weeks ago in October. We're very pleased by the very together performance since launch on July 1 as well as the initial reception in the EU as well as the U.K.

Barrow Hanley has been very pleased with our relationship with Perpetual over the last year. Perpetual has allowed us to focus on our expertise, which is the manufacturing side of the business, while they continue to build out a world-class distribution business through 2021 and going forward.

They've been incrementally accretive on many levels. That's helped us accelerate our strategic and operational plans, helped us build out infrastructure, processes allowed for professional development opportunities for many of our folks here at Trillium. But importantly, not only helping us source new clients in new geographies, but also helping us service in a deeper way, existing clients who've been with Trillium for many years. This allows our team to broaden our focus to deepen our relationships and to capitalize on the burgeoning responsible investing market.

Perpetual's distribution expertise has helped Barrow Hanley in many ways. For example, Barrow Hanley has completed a total rebranding including our website, marketing materials and client relation materials, all now supporting a very modern and refreshing field that has received very positive feedback for the marketplace. We've also strengthened our business development support efforts. For example, led by Perpetual, we've scrubbed through and improved our e-investment data disclosures, resulting in significantly more consultant views for certain products, potentially laying the groundwork for future business gains. On the distribution front, we're already extending our reach and penetration into traditional perpetual markets, such as the Australian retail market as well as other higher-ticket relationship-based opportunities.

So not only is perpetual helping us be introduced in solicit potential new clients. We're also moving to a level of intimacy where they're helping us service existing clients, further opening up the existing Trillium team to search new geographies, new product platforms as well as deepen our service capabilities with our trusted existing client base.

As we look into 2022, Barrow Hanley is very excited about our opportunities for growth in the coming year given our competitive performance as well as the important build-out of the product lineup and the distribution platform. I'll highlight 1 example of Perpetual opening new opportunities for barrel handling. Representatives in the Perpetual London office cultivated a pre-existing relationship with an institution that was not yet a Barrow Hanley client. That institution was prepared to replace a very large global value manager who did not have the ESG capabilities that they needed. Although Barrow Hanley is not a dedicated ESG manager like Trillium, we have been building out our bottom-up ESG capabilities for many years. In the end, Perpetual was able to marry the very competitive performance of our global value product with our extensive ESG analysis groundwork to win a $500 million mandate, effectively creating a brand-new product in a completely new ESG market for Barrow Hanley. We're very excited that there are many more opportunities like this where we can expand our penetration and our reach with the assistance with perpetual.

With continued all-time highs in net inflows as well as the receipt of our first large institutional non-U.S. client in 2021. We're quite excited about growth opportunities as we begin 2022. In 11 months with Perpetual, we've launched 3 new strategies in Australia and in the U.K. And as we look into 2022, we plan to announce a suite of UCIT products, highlighting both legacy Trillium product as well as our newest strategy, the Trillium ESG Global conviction. Last, we're targeting an untapped and ancillary marketplace in the institutional consultant sector, an area that Trillium has not historically focused on in 2022 and look forward to updating you on our progress there. Along with Perpetual, we're committed to growing our client assets, growing our market share while delivering on our expectations with our communities as a responsible investing leader.

In summary, our strategy is to build world-class investment capabilities and globally in-demand strategies with significant capacity and to marry this effort with effective -- with equally effective distribution and product capabilities in all major markets. To do this, we must ensure that our boutiques maintain their investment autonomy and culture while providing them with appropriate support. We will continue to look for investment capabilities whether within our existing boutiques such as the newly created Trillium ESG Global conviction strategy, which is based in Edinburgh, where the CLO opportunity we're pursuing with Barrow Handling or through targeted acquisitions with a particular focus on ESG and alternative strategies. We will continue to build and support appropriate products such as 40 Act funds, SMAs and ETFs in the U.S., usage for European and Asian investors and funds and eTMF for Australian investors. And importantly, we need to continue to nurture and grow our distribution capabilities, which Adam Quaife, our Global Head of Distribution, will now discuss in more detail. Thank you. Over to you, Adam.

Thanks, David. I would like to say that there's one common theme there or you look at the investment management teams that we've got both domestically here in Perpetual, but also offshore with Barrow Hanley and Trillium and that is heritage. And heritage is so important for clients because it proves that you can manage business cycles in terms of investment performance. And heritage counts, in my line of work in representing the client and distribution, it's really experienced that pace. And at the moment, what we've got is a great team. We've been able to attract some tremendous talent. So the team is 81 and growing. And we've currently got 8 open headcount hires in place across the U.S., Europe, U.K., Asia and Australia. And the game has changed for distribution. It's no longer about pushing product, it's more providing solutions for clients and their needs and their clients' needs. And our team is very, very focused and focus really means for distribution is really about where you want to win, what channel do you want to operate and also what geography do you want to focus on. Of the backdrop of building out that global distribution team, it's so important to have a strength and capability to support that expansion. So whether or not that is CRM, marketing, collateral, RFPs, all the systems you need to actually give a good client outcome. And let's not forget, as we take our business offshore that we need to also focus on our own backyard in Australia. And we've got a great brand here in Australia and a great heritage as well and probably one of the largest sales teams around. And I'd also like to note that we're getting some really good results as well. For instance, in September quarter, we had our best quarter ever for retail sales in 5 years. And it's not just retail that is kicking some goals as well. And I think Amanda already alluded to the ESG multi-asset fund that was launched, and that was launched off the back of retail and institutional client needs. We actually consulted with those clients well before that fund was launched and created a vehicle for institutional and retail clients. And that we already hit $1 billion for that fund, and that's the fastest $1 billion that Perpetual has raised in unitized format in Australia. So we're doing -- we're also looking at the direct market as well. And it's pleasing to say in the last 12 months, our $1.67 billion of client money direct has grown to $2.2 billion. And that's significant, and that puts us in a great place to actually extend our solutions product suite to that segment. We've also retooled our distribution team to focus on that direct market. Amanda has mentioned the launch of active ETFs. We're going to continue to do that. And we've already got our listed product in market. So with the change in sands, if you lock of distribution, post high in Royal Commission, we feel that our team is very, very well placed to capture some market share in that exciting segment. If we maybe look at how Australia runs compared to the rest of the world, if we might just go to our next slide, at the moment, 25% of our business is in Australia. We expect that parcel of business in terms of assets to grow, but the percentage will probably reduce. And the reason the percentage is going to reduce, if we look at our next slide, you can see the addressability. Again, where do you want to win. And so for North America, it's isn't close to 50% of the worldwide addressable assets. And Perpetual, Barrow Hanley and Trillium are very, very well placed in that segment -- in that market because we're going to expand our presence into the retail segment. And that's a natural move. 90% of our -- 95% of our business in North America is institutional, and you've got that mega trend of institutionalization of retail. Meaning that, it's -- it puts us in well positioned to take some good market share in that new segment. And in Europe, we've already touched on the fact that, again, we've built a solution for clients. Both David and Brad has covered that. We've actually built a product or a solution, if you like, for a Nordic client. And that's really allowed us to bring forward our product strategy in Europe and Asia and LatAm as well because once you set up a product structure for cross-border, it has a broader applicability to those other markets. And we've also expanded, as David mentioned, into Europe to capture some of those mega trends with ESG in the U.K., and the U.K. is significant. By 2024, the U.K. is going to be a GBP 3 trillion pension market. And again, we're getting quite a lot of interest in that segment in the U.K. Close to home in Asia, we do have plans to build that market out next year with hires in Singapore and a transition of an employee in the Hong Kong office as well. If we go to the next slide to cover the megatrends, I won't cover all these points because some of them have already been covered. But just to drive home, it's really about solutions. Solutions-led approach has actually allowed us to build out a mutual fund capability in the U.S., which Chuck will cover cross-border, which we've covered, active ETFs in the Australian market as well. And we really wouldn't be able to do all that unless we had those contemporary capabilities with those acquisitions, and I'm sure there'll be further acquisitions down the track. And it's also important to note that the professional buying behavior of clients has changed. The large sovereign wealth funds, central banks, insurance companies are getting bigger as are intermediaries, and they're getting more sophisticated than ever. And they want deeper, more meaningful relationships with their partners. So strategic partnership and putting that client first is key. So where are we at in terms of initiatives for Trillium and Barrow Hanley. With Trillium, we've actually gone from a sales team pre-acquisition of one to expanding our -- expanding that into effectively all markets. We've repositioned the brand, we've also in the marketing collateral and the website. And we've got some great momentum, as David has already covered. With Barrow Hanley, we've recently appointed a head of distribution in the Americas, which we'll -- Chuck will cover. And as I've previously said, we're actually going into the intermediary market, and we're well positioned there to get some market share. And this is all the backdrop of a client-centric support function that we are building out. So what does our team look like in terms of distribution leadership? In North America, the largest market, we've just hired Anne Therese O'Neil, who's had 25 years' experience. And she's recently joined us from Wells Fargo Asset Management has an extensive experience in leading sales teams. Rob Kenyons joined us last year as well, and he was at Alliance Global Advisers, where he ran the end-to-end strategy for retail, including product development and running the retail sales team. Again, well placed to expand our footprint in that segment. And recently, as a matter of only 2 months ago, Tanya Svidler joined us where she was the Director of ESG Solutions at Morningstar. And Tanya brings a wealth of knowledge with 20 years experience, both in institutional and intermediary with a focus on ESG and she will be part of the Trillium team. David has already mentioned Jan. A couple of interesting points about Jan Hein Alfrink. He's lived all over Europe. He's spent -- he's lived in Austria, France, the U.K., more recently in Switzerland and has relocated his family to Amsterdam, where he's spearheading our launch and build out of our European distribution team, which is critical for the product suite that we have, and that's where we're getting quite a lot of interest from a pipeline opportunity perspective. And that's really about thinking global but acting local and hiring the right people with the right nationalities and the right language skills and the right experience for clients, especially in a post-COVID environment where you can't travel around as much. We've got Richard Souri in the U.K., Richard was born in the Middle East, covers the Middle East and Africa and also the larger intermediary channel and has actually built out a very success pipeline as well. Donghoon, he's our salesperson institutionally, based in Hong Kong and is moving across over in January to Perpetual from Barrow Hanley. We're building out in Singapore in the first and second quarters of next year. And let's not forget home base, where we're actually hiring and increasing our capability, sales capability institutionally with the hire of Ben Daly. And the reason being is from those acquisitions Perpetual is now more relevant in the institutional channel in Australia. So Ben's going to be covering New South Wales, Queensland and New Zealand. And with that shift in sands and retail, post high in Royal Commission, it means for how we interact with clients using technology, CRM is more important than ever, you're getting the spawning of breakaway dealer groups, research houses, retail consultants that needs attention. And we've hired Nicole Aubery to focus together with the rest of the retail size team on that channel. So maybe if we go to the next slide, just in summary, we've actually been able to attract really good talent and I'm really pleased on the growth prospects for the firm. We've got a great pipeline, still lots to do. And from my business perspective, it's all about the client. I'm now going to hand over to Chuck Thompson to take a deeper dive on North America. Chuck has -- is a 30-year veteran and has spent 16 years at Henderson building a business to $25 billion from scratch. And that was a really nice mix of business, 60% intermediary and 40% institutional. And under Chuck's leadership and he's built out, I'm sure that North America will be a huge success. Over to you, Chuck.

Thank you, Adam. It is a real pleasure to be with you all again on Investor Day 1 year later to share the progress that we have made, what a year and what a difference it has been. So I'm looking forward to sharing with you the strategy and execution that we have employed this last year. So here are the highlights. We have work to expand and deliver client and channel flow diversification for both Trillium and Barrow Hanley, improving market share, as you've already heard from David and Adam and others. At Trillium, we have doubled their business in 1 year. More to come with the hiring of Tanya Svidler on the institutional side. We also -- we're able to get our very first top-tier Tier 1 consultant rating for Trillium and received an ESG 1, which is the highest rating you can receive for ESG at one of the top tier consultants. So we're very excited about the progress in 1 year for Trillium. And we continue to build out opportunities for strategies and vehicles, as you've heard from John Quealy and Brad Kinkelaar. And we are very excited to announce that we will be launching 2 mutual funds in 2 weeks into the U.S. market for Barrow Hanley, the emerging market value and the international value fund. So that's part of our expansion plan. The team has worked extremely hard. I want to thank the team here in the U.S. as well as our colleagues in Sydney, who have helped us accomplish an incredible feat of building an intermediary mutual fund platform in 4 months. We're excited that we have played that down in '21 for a strong foundation in '22 and beyond. We will have 9 funds and nearly $2 billion between the 2 affiliates in Trillium and Barrow Hanley within 3 months. Next, we've scaled and focused our resources, both financial and human. We've really had the opportunity with Perpetual scale and investment and support of the executive team on both the intermediary business plan and institutional hiring, as you've heard of just some top quality people who are very excited to continue to grow the Americas and to take Perpetual to a global brand. And we believe that is very, very possible. We've already received some nice peer in media in the Americas market and continue to hope to grow Perpetual's name, that wasn't known before we started our acquisitions just a few years back. As we've said, we are building new vehicles to drive higher net flows in the priority products. Those priority products are the greatest demand and potential for both channels and our clients. Frankly, they've asked for a few. We have a few founding investors for new vehicles that will be started in March. These are all very exciting potentials that are coming, and we're starting to get the word out on what exactly we're trying to do. And lastly, driving efficiencies. We have chosen a platform by outsourcing, which keeps the intermediary platform very optimal, especially scalable and bolt-on acquisitions in the future that the executive team at Perpetual, Rob, David and others may find, we'll make it more seamless than it was before without any platform. And so we've done a lot of hard work, building projects for that efficiency to streamline costs, kudos to Amanda Gazal and COO teams on both Trillium and Barrow Hanley. I think global synchronization is already being achieved as we speak to next. Next, please. Thank you. So 1 year ago, we had -- or 18 months ago, we had 0 offices in the Americas. We now have 6. This gives us great breadth and scale across the Americas to have hubs for all of our 39 business development professionals to access and use, but also get to their local markets and their local advisers. This is very important. You've heard from David Lane, 400,000 advisers on the intermediary side and over 12,000 gatekeepers in the institutional side. They exist all over the U.S. and now even more in a COVID environment, working remotely. So very important to basis, Boston being Trillium, with nearly 40 years of support in Boston. Barrow Hanley in Dallas with 42 years of experience and basing there and the newly opened Chicago office, which I'm in today talking to you. It is night time here, and we hope you're having a good morning. With this is a usual thing too, by the way, to have meetings in the evening for the Americas, which is part of being a global brand. Next, please. So very important to talk to you about our strategy. Trillium had most of their assets and client relationships in the intermediary market, which would be the second bar graph that you see on the slide, broker-dealer and RIA would be where they spend most of their time gathering assets. As I've just told you, we've introduced them the institutional market, received their first top-tier consultant rating, the highest ESG rating you can get. And Barrow Hanley spent all of their time, 99% of their time in the top bar in the institutional. And as I've told you 2 weeks from now, they will have access to the other 2 or 3 bars below. This is part of our strategy that 1 year ago in Dallas, I spoke to you all at Investor Day about our channel diversification strategy. We've achieved that in 1 year and it was a herculean effort by a very small team. So we're very proud of the progress, but it has only set the platform for future growth. So we believe flows will be coming because of this high-value effort to bring both of these firms to new clients, new prospects and diversifying their business. Next, please. 10 of 14 high demand channels are now accessible by Trillium and Barrow Hanley. We are focusing on the top 5 where we have separate accounts, institutional separate accounts, now mutual funds. You heard from Adam, UCITS will be launched later early in '22. We believe this gives us ample opportunity with multiple vehicles to access all types of clients, both big and small. And by outsourcing, we've made it an optimal efficient environment. So we're very excited for these high-demand categories. We hope that we can introduce ourselves to many new clients for both businesses and diversify Barrow Hanley from institutional to a growing intermediary channel, flow business as well as Trillium from their intermediary strong flows that we've had since acquiring that business and working closely with them. And as you've already heard, the rebranding has gone over extremely well. It just gives clients an opportunity to reintroduce themselves and say, what is new over there, what is happening with all of this new and refreshed look. Next, please. So I want to walk you through very briefly a quick case study. You've heard that my background, Henderson Global Investors. I had a very deep breadth of experience with global and international equities. So it wasn't a biased approach to take the first mutual fund to launch with Barrow Hanley as an international value fund. But you'll see on the right chart that the performance was so compelling, we had to make it a strategic priority to launch it as one of the first mutual funds. The opportunity on the left in the red colored box is substantial. And even in the last 18 months, active non-U.S. equity by allocators in the U.S. looking to diversify their either U.S. equity has run almost 50%. And yes, if you're doing the math, $6.8 trillion is a real number in just active non-U.S. equity, and I'm told by Rob that, that's double the entire Australian addressable equity markets. So just in 1 category with 1 strategy, the 31 Barrow Hanley and the $8 trillion, we think the opportunity is immense to continue to serially grow the product line with discipline. However, I have been in situations before waiting for scale to happen while the burn rate on mutual funds happen. We will do this very, very carefully, very strategically. You have my word as shareholders. Next, please. So to sum up, we are very confident in the strong performance of the core ESG equity Trillium lineup, even, you've heard probably this unknown 35-year socially responsible record that Barrow Hanley has, and we've actually won business with ESG this year, significant business, the $500 million mandate for Barrow Hanley and in excess of $1 billion run rate now at Trillium on an annualized basis through September 30. So we're excited about the performance of the value rebound that Barrow Hanley has capitalized on. You saw 93% of their strategies are outperforming on a 1-year basis and in the high 90s -- or high 80s and low 90s for 3 and 5 years, which gives us very good opportunity to talk about traditional value investing, the overweight of growth in many allocators portfolios are the conversations we have begun in the last year. We hope to continue to expand that conversation, and I am very confident that those conversations will lead to new net flows. I'm very excited about the leadership team that we have in place. We have been very careful and thoughtful. We have not rushed a team together. We've been careful with the pedigree, the history and the heritage as you've heard how important that is from Adam. I believe in heritage and the ability to focus, be a great team player, collaborate globally. So we brought some really globally minded senior leaders in place, and I couldn't be more pleased with the team that's shaping up together. I spent a day yesterday in Dallas with all of them, 31 at Barrow Hanley. I've flown back to Chicago. Yes, we are moving around in the Americas now. And tomorrow, I will spend time with the 12 individuals caring for Trillium and the Perpetual U.S. business. So we look forward to the strong results and net flows that we have early and expand our ESG flows. And we are seeing reversing outflows on value equities as you've seen. More to come, as those conversations get fleshed out on the allocation between growth and value. And lastly, we worked very hard to build new distribution technology capabilities to very closely target the correct audiences for the Americas. 400,000 advisers is not a strategy to try to cover all of those. It's much better to get very strategic and tactical and get to the 5,000 or 6,000 that really understand Barrow and Trillium or have value or ESG in their portfolios or have considered an interest in those asset allocation areas. So with investing in new challenges in distribution channels and distribution to diversify both Trillium and Barrow Hanley plus the team that's in place that has enthusiasm and energy to tackle 2022 for perpetual here. We think the future is very bright. Thank you for the Perpetual ExCo executive committees support and your support as shareholders. We hope to continue to show you good progress over the coming year, and I'll hand it over to Rob Adams again. Thank you again for all of your support.

Thanks, Chuck. That was a great run through for everything that's happening in the U.S. of as everyone's mentioned, everyone knows, it's such an important marketplace for any global asset manager, 50% of the addressable universe. And so we're so thrilled to have Chuck in place and have such a terrific leadership team in place and really looking forward to future delivery from Chuck and team across all channels over time. Okay. In wrapping out, I thought it might be useful just to very briefly summarize what's been said over the last now 2 hours. Thank you for your patience. I'll be brief in closing, then we'll get to questions quickly. For our international asset management business, as you can tell, we are primed for growth. We have world-class globally relevant investment capabilities and those globally relevant world-class investment professionals are partnering with our world-class distribution team, opening up new channels across key geographies. Our Australian Asset Management business has had 2 consecutive quarters of positive flow, which is movement in the right direction and the exceptional performance profile across all sectors, augurs very well for the future, as does our recent product launches, including the first of what will be a suite of active ETMFs. And as Amanda mentioned, the second to be launched just next week. In Perpetual Corporate Trust, our leadership role and our consistent growth in Debt Market Services and Managed Funds Services is being augmented by our unique position to provide unmatched digital solutions across our client base. And in Perpetual Private, we will continue to exploit the changing shape of the advice industry in Australia and demonstrate the operating leverage that our competitive advantages can provide us with. Across all of our businesses, we will continue to seek to utilize our balance sheet strength to find new opportunities that expand our offerings and broaden our growth potential. In closing, I trust that today, we've shown you that Perpetual has unique combination of businesses that are primed for growth. We have a strong and trusted brand and an experienced management team that is delivering on our stated strategy, increasingly utilizing our balance sheet strength in a highly disciplined way to deliver new and exciting growth opportunities for our clients, for our people and for our shareholders. We have positive momentum across all key areas of the firm with strong supporting tailwinds from the segments within which we operate. And as a team, we feel very confident about our future as I hope you do too. With that, I'll turn it to Susie as we head into open Q&A. Thank you again for your time.

Thanks, Rob. [Operator Instructions] I see there's a few questions waiting. So if the operator could please hand over the first question to us.

The first question comes from Ed Henning from CLSA.

A couple for me. Firstly, today, you've obviously talked a lot about the opportunities going forward. If you can just start with the investment business while the performance is very strong. Are you facing any headwinds in that business or particularly regional strategies in thinking about a flow perspective? And also on the other parts of the business, on the Private Business or Corporate Trust, are you seeing any headwinds for those businesses as we look forward?

Thanks, Ed. I might kick off there, Susie. In terms of our asset management businesses, yes, I mean not everything is tailwind, not everything smooth sailing. There are headwinds. And you're right, I think, Ed, to particularly note domestic equity sectors, domestic equity sectors do tend to have more headwinds than perhaps some of the global sectors. Here in Australia, Amanda talked about our flow profile improving in Aussie equities. But we know Australian equities is a super competitive sector, we know that in-sourcing of core capabilities is continuing. But Amanda mentioned, the niche strategies that we have the fact that we are actively communicating more and advertising our brand more is certainly helping in addition to the strong distribution efforts. But suffice to say, it's not an easy sector. And I think similarly, U.S. equities, and I'm happy for David and Amanda to comment as you see fit guys. But in U.S., similarly, domestic sector impacted by particularly over the last several years, movement to passive investing. But I think whether it be Barrow's U.S. equities capability or Perpetual's Aussie equity capability, we have teams that have been managing assets through cycles for 40 and 50 years, respectively, with distinct styles and allocators are still allocating to those styles. And we think, particularly with the more recent move towards value investing that 10-year growth run seemingly over we think allocations there will actually become a positive tailwind for us. I don't know David, if you want to comment further?

The only thing I would probably add to that is we have had some losses in the U.S. in the fixed income side. That team tends to invest conservatively, and that has affected them coming out of the post-COVID period. But the trend speed -- the offset there is that we've done very well on the global side, where there's a lot of demand, particularly as we take Barrow Hanley overseas. So the trade-off in terms of margins is quite nice. You never want to see outflows in any of your businesses, but the trade-off there is a nice one.

And maybe Amanda domestically?

Yes, I think as you said, Rob, we -- there are some headwinds, particularly for Australia -- for domestic equities in PAMA, but I think it's fair to say we're on the offensive now. We've got good performance, more near to term performance. We've seen some good ratings momentum with upgrades of some of our flagship capabilities such as the Industrial Share Fund and our Ethical SRI fund. And so we're having good conversations, and we do have some niche strategies that are certainly appealing to the market, and launching new capabilities like the active eTMF that we launched last week in the Australian equity space. So certainly, it's -- yes, we've got some good momentum.

Okay. Great. Thanks, guys. Are there any other questions on the phone line from Ed?

Now Rob, not trying to make you pick your favorite child here. But if we think about the next 12 months and the next 3 to 5 years, what do you think the biggest opportunity for Perpetual is?

Over the next 3 to 5 years. Yes, I mean, I think the thing that excites me about where we are as a business is that we see great opportunities across each of our -- combine our asset management businesses across each of our 3 lines, whether it be asset management, corporate trust business or the private client business. Yes, that's the exciting thing. Yes, we are -- we think the growth potential from our current position for the reasons that the team has gone through today positions us really well. Yes. I think about Dickie's business and Corporate Trust, the digital story there is, we think, going to be a potentially super high-growth story. We have a unique privileged position. We've got data and contemporary tools that nobody else has. Yes, to be opening up a whole new sector of revenues were super exciting. I think for Mark's business, yes, the last 18 months of positive execution adding -- increasing our adviser base by 33%. And these are the sort of top 0.01% of the industry in terms of quality of advisers. It's been terrific. I look at the acquisitions that we've made across our 3 businesses and all of them are complementary and add value to us, dovetail into what we do and provide us with the new growth platform. So I'm not going to pick one Ed. I'm equally excited about all. And my background is more asset management with a bit of wealth. But I think the Corporate Trust story is amongst our are most exciting. That's for sure. And actually, I did a disservice to your first question there was a second part to it, and that was just thinking about flows and growth for both Perpetual Private and Corporate Trust. Maybe Mark, and then Dickie, do you want to maybe respond to that part of Ed's question.

Yes. Thanks, Rob. Look, well, certainly, the tailwinds are a lot stronger than the headwinds in Perpetual Private over this half. And that's probably post a period where we've probably faced a few more headwinds just coming from lower cash rates and some of the repricing and exiting some of the, I guess, Master Trust business, which is really not on strategy for Perpetual Private moving ahead. So that probably was a bit of the story over probably the last 3 to 4 halves, but certainly, the tailwinds are strong throughout this half. If you look ahead, we only have a small amount of that non-core strategy business left. And we'll make some further pricing adjustments, but that might be on only about $500 million, $700 million business. So it's certainly if that end, and if you look further ahead, probably with a raising cash rate environment coming over the next 3 years, what has been a headwind could certainly come back the other way as well.

Yes. And from Perpetual Corporate Trust, obviously, focused a lot of those tailwinds, but reality is the housing market is going exceptionally strong, that could cool, but I don't think it make a material difference. And also in the managed funds business, the commercial property market post COVID is one to watch where people reassess their footprint in the city. But again, we haven't really seen that change much as well. And in the digital business, we're at the start. So it's -- for me, it's our own execution because actually clients trust us. They trust the brand and they want the product. So I think that's a positive, but still to do.

Okay. Thank you. So we might move to questions that are coming in from the webcast. The first question I have here is from Andrei Stadnik from Morgan Stanley, which I might throw to you, David, in the first instance. The U.S. $500 million mandate that was mentioned in the video, is that new for this quarter, the December quarter? Or was that booked in the September quarter?

So I think the $500 million mandate, Andrei, that you're talking about is the European one. And this would be the one that is going into the UCITS format. We have the -- all of the documentation in with the Irish regulators now and are expecting approval sometime in early January for the UCITS to be established and funding should take place shortly thereafter. -- which means it will be a next quarter event. And one of the things that's probably worth mentioning about an investment like this or probably back to the last question as well, is the lovely thing about getting new investments into Europe, which Adam constantly reminds me of is that gross investment -- gross flows and net flows are the same. We don't have any significant investments already in Europe. And so as we build that out and as we begin to grow, we really have an ability to begin to ramp up flows over time.

Great. Thank you. So I'll take another question from Andrei Stadnik and maybe one for you, Dickie. Can open banking and consumer data right lead to revenue opportunities for PCT? And how are you addressing this?

So I think the consumer data is predominantly going to really enhance the retail market. where we're actively in the institutional market, but there will be flow on benefits, absolutely. I think supporting of standardization, transparency of data and data flows can actually enhance digital capability and digital products. For example, we actually taken data from to index all our mortgages. So actually, we can give a current valuation of mortgages on the platform versus the inception of valuation. So the free flow of data is only going to increase the openly for us.

Thanks, Dickie. The next question on the webcast comes from Shreyas Patel. Perhaps one for you, Rob, to begin with and then David can feed into it. Will the growth in the $75 billion of global assets be fairly linear from retail inflows or more lumpy from institutional mandates, when we look ahead?

It's a good question. Thanks for the question. And actually, we may throw it Chuck to give us a U.S. perspective given the change in channel focus we have there. At the moment, we've got institutional leading to our book. In fact, there's probably several people here who could comment on this. But yes, I think our efforts in the U.S. that Chuck described to open up to the intermediary space will change the balance of our business over time. But we do have a strong institutional lending with Barrow being 100% institutional by definition today. So it will take some time to shift that balance, but we would expect to see a shift. Having said that, yes, we're really positive about our prospects institutionally in the U.S. and Europe, in particular, I would say. So I think with the creation of product frameworks that open up in the intermediary marketplace in those major markets of the U.S. and UCITS structure in Europe, which can then be sold into Asia, we would like to think that those platforms will attract decent material flows, and that will have an impact on the balance. But we are equally positive about institutional opportunity, and that's where the lumpiness comes into. We -- I might pass it to Adam here, but in his global pipeline, we have opportunities at different stages, at different probability schools ranging from $10 million to over $2 billion individually.

Yes. Thanks. And Rob is right. I mean, it's hard to predict flow-wise for institutional. It is effectively feast-or-famine if you like. And the good news is we do have a good pipeline split pretty evenly by geography. In the U.K., there's a significant opportunity that's north of $1 billion. We've got institutional opportunities in Australia. And if I look at the pipeline now, in the Australian context, it's probably a 2x of what it was last year in terms of assets and if you take the same probability weighting as well. So I'm confident that we will secure some of those institutional assets and maybe I just have some comments as well.

I mean maybe we'll have Chuck review in the U.S. and separate matter. I mean, also in Australia, the strength of the brand we have in a retail sense here is actually leading us to still be focused on institutional, but we think the retail opportunity is really strong for Perpetual.

Yes, absolutely. And I think we mentioned in early the earlier session that we've been doing more to invest in the brand and to certainly resonating finding that we're getting good response from that unadvised and direct market and certainly looking to, as we said, do more on that front. And obviously, having relevant products particularly in a listed structure is certainly helping as a tailwind there.

Maybe Chuck comment on U.S. and the split between institutional and retail into the future.

Sure. Maybe it's useful to talk about the split 1 year ago, it was 95% institutional flow, 5% intermediary. The most recent quarter was 75% institutional, 25% intermediary flow because of the Trillium growth. It is my expectation with the vehicles that we're building out for the intermediary platform as well as reintroducing ourselves with good performance on Barrow Hanley, it would take 36 to 48 months to get to 50-50. That would be the goal, diversification of flows. Your point is well taken. It is lumpy on institutional and more incremental on intermediary, but therein lies the strength of diversifying both distribution channels for both firms that had strengths in either, and we're going to balance them both. So that would be my answer. Thanks.

Okay. Thanks, Chuck. I see there's a question on the phone, so we might move to -- back to the phone to take that question.

Our next question is from Elizabeth Miliatis from Jarden.

The first one is on cost growth. At the Q1 update, you gave us the cost growth of 18% to 22%. So I don't think you mentioned anywhere in the presentation. So just wondering if that's still applicable and where you think you might fall within that range given we're halfway through the financial year and given where the Aussie dollar is trading relative to the U.S. as well as wages pressure that we're seeing globally?

Yes. Thanks, Elizabeth. We've snapped Chris Green in to pick up on any specific questions or numbers as our focus today has been on strategy business direction. So Chris, maybe if you could provide Elizabeth with a bit of response there?

Sure. Thanks, Elizabeth. And you're right, there's a fair bit going on. We're not giving any new guidance. So the guidance remains on foot that we provided in the Q1 update. But there are a few dynamics going through on the expense side that you're right to raise exchange rate. So while the Aussie dollar falling is great for us because our offshore earnings are worth more, it is putting a little bit of pressure on that PAMI expense guidance as the exchange rate impacts on the expense line. The good news is the impact more greatly on the revenue line. You talk about wages pressure, and we are seeing some wages pressure like coming through across the business -- across the globe to be honest. At the moment, that's from an expense perspective being offset by the fact that we can't hire people as quickly as we might like. So you've got sort of slightly higher wage expectations. But FTE expense is not as high as we might have thought because we physically can't get the people into the business. So that's also going on. So I think overall, we're remaining we're holding to the guidance that we gave last time. I think it's going to be closer to the upper end because of that exchange rate, particularly depending on where that moves. But at around that $0.70 mark, it means that PAMI guidance is going to be towards the upper end.

Great. Thanks, Chris. Were there any other questions from Liz on the phone line?

Yes, I had just one more question on the distribution team. So obviously, it's expanded quite significantly, and that's in line with supporting the Barrow Hanley and Trillium businesses. I think -- so by the end of the financial year, you might be closer to 90 staff within the distribution team. There was a comment earlier about growing at an extra 35 people over the next 5 years. I was just wondering, in relation to that, what would the cadence be of those 35 people? And would there be any sort of hurdle rates in terms of what the current distribution team can achieve in terms of improving the flow trajectory before you go in hire the 35?

It's a great question. So what we've done recently with our ExCo and the Board for that matter is actually devise a business case and connected to that as a business plan in growing out the intermediary business in North America. And so that requires a significant spend in terms of headcount. We are spacing that out over time though. So those hires are going to be incremental based on certain hurdles and with products being developed, marketed and revenue in sales and sales coming in. And probably that number also would include our expansion in Asia as well.

I think I might just add to that, Liz, to say, when we acquired Barrow Hanley and Trillium, we had a set of assumptions in there about distribution build-out. We brought forward these plans because Chuck is so optimistic about the opportunities given the relative positioning of both Barrow and Trillium. So to be frank, we just want to crack on and get it done earlier.

Okay. Thanks, Rob and Adam. And so we might move back to the webcast where we've got a whole lineup of questions, and I might throw one to you, Mark, on Perpetual Private and operating leverage, from Nigel Pittaway. How long will it take to demonstrate significantly improved operating leverage in Perpetual Private and how we manage the cost base if markets turn down?

Yes. So thanks, Nigel. Look, I think if I get to knob the issue and I look back at what we've talked about over time, we believe that the earnings margin, if you like, on this business is roughly around that 25% mark or a cost income of around $75 million. We've been tracking a little bit lower than that over recent years. But we don't see that number changing in terms of a long-term view. Certainly, as I've kind of mentioned to it before on the headwinds becoming tailwinds coming through the portfolio, I think over the last 6 months, certainly, the tailwinds have overcome those headwinds. And I think that, that sort of margin numbers overall, where we'll be looking to operate. I think in terms of your comment on markets overall, it's kind of a strange comment, I guess, in the sense that markets are significantly up since last half and this is probably the first half where we've seen the full impact come through the revenue line. So we're probably yet to see that come through before we start being concerned on possibly about a down wind in the markets overall. But we can manage our operating costs as we have done and demonstrated over the last 9 to 10 years in downtimes in the market. So I'd expect that not to change overall.

Yes. I might just add a further comment there. The adviser growth strategy that Mark has been executing so well over the past to 2.5 years now, yes, we've put up more advisers than we thought. And every time we put on a new adviser, there is a drag from a P&L perspective because we're investing in that individual and support infrastructure around that individual. And the clients will come, but over time. And so there is a payback period that does create a little drag on the P&L, which has certainly impacted that operating leverage in the short term.

Great. I think there's a few other questions on cost, and I might throw the first one to you, Rob, from Shreyas Patel at UBS. What level of assets can the current cost base sustain?

It's a good question. Asset Management is a business from which you can get decent operating leverage. And yes, I think we're well positioned to deliver on operating leverage over time. I think the resources that we've added from a distribution perspective have been important to get in place to allow us to build our pipeline and deliver on revenue growth expectations. But we would expect ourselves to be able to demonstrate operating leverage where they bring us the asset management business through Barrow over trillion, as we grow assets over time. Yes, there will be from time to time, incremental spend required to support that growth. I think for Trillium, for example, the biggest thing that we are managing for now is ensuring that we're investing ahead of that growth because we do have an expectation that we could be entering a period of exceptionally high growth for the business. So we are trying to predict part of that problem by investing in that base a little bit earlier. We are Amanda Gazal and team, our Chief Operating Officer, have been running projects across the business to improve the strength and scalability of our operational backbone, if you like, in a technology backbone that will deliver leverage when we get growth in assets over time. So I'm entirely confident that we'll be able to deliver operating leverage out of each of our asset management businesses over time with time to time incremental spend required.

Great. Thanks, Rob. So we have a question here from Shaul Ler about PCT and thinking about the revenue. Is it a percentage-based fees on -- is it set subscription chart for Perpetual digital?

A good question. So yes. So there's a multitude and range of these around sort of membership fees, fixed fees, establishment fees as you develop products and solutions for our clients. So there is a myriad of different fee structures depending on product and channel.

Great. And another one for you, also from Shaun. On your involvement in CBDC, could you please elaborate how you see a fiduciary service provider like PCT being relevant in world where decentralized currency gets mainstream?

So we've been looking at blockchain technology and digital currencies since 2015. We've run a number of strategies and product initiatives, which enabled us to build a relationship with consensus of why we're invited into the proof of concept Project Atom transaction. CBDC, the reality is it's currency. We process 1.2 million payments for $368 billion, whether that's digital currency or feet currency doesn't matter. The reality is there's a fiduciary responsibility to act if the best interests of unitholders. And I don't see that going away. Computer can't do that.

Great. Thanks, Dickie. We have another one here, which I might throw to you, Amanda, in terms of the ESG and what do you think opportunities in that area are for the PAMA business?

Sure. So as I mentioned, we've been on a journey within PAMA for ESG for a while. And we -- so we feel like we have really strong foundations, I suppose. We've launched -- and as a signal to that we've launched obviously last week, our first active ETF is an ESG capability and quite optimistic about appetite that the market will have for that kind of strategy. I mentioned actually that there's quite a gap in the market in terms of actively managed ETFs that have an Australian equity ESG bent to them. In addition to that, we're seeing across our product suite of ESG. And actually, I think all of our ESG capabilities have recently been added in various ways to model portfolios across the advice channel. So we're seeing good momentum across the board. And certainly, with the likes of Trillium as a capability that we launched last year, again, we've really kind of got that suite of ESG that we can be having those solutions-based conversations with clients.

Thanks, Amanda. I think we're close to finishing up. So we probably got time for one more question from Shreyas Patel from UBS again. All the current businesses -- business segments core within Perpetual, Rob, I might throw that to you.

It's a big question to finish on. Thanks for the question. Yes, they are. As I mentioned in response to a previous question. Yes, we see extremely positive opportunities for each of our lines in business going forward. We are very confident of our ability to deliver on that growth expectations that we see for the businesses. So yes, the blend of businesses that Perpetual has is unique. We do see some synergies between our businesses, albeit limited. So that's an important focus point. But the bigger point is we are very confident about positive execution in each of our lines of business going forward. And as long as we have that confidence, we're going to retain this portfolio.

Thanks, Rob. I think that ends the Q&A session. I don't know if you want to say any kinds words.

Yes, closing. Thanks, Susie, and thank you to the team for being here today. And again, a shout out to our Chief Operating Officer and our Chief Risk Officer, Amanda Gazal, Sam Mosse, respectively, for their important work in allowing our business lines to do what they do every day. Once again, on behalf of the team, we really do appreciate your time. It's a big commitment of time for you to dedicate to Perpetual. We really do hope that it's been a good experience for you that you've learned something about what we do, and you shared the confidence that we will all share collectively in the future of Perpetual. Thank you very much for your time, and have a terrific day or evening.