Pinnacle Investment Management Group Limited (PNI.AX) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to PNI's Full Year FY 2025 Financial Results Teleconference. [Operator Instructions] I would now like to hand over to the Managing Director, Mr. Ian Macoun. Please go ahead.

Thanks, Ashley, and welcome to everyone who's joined us on the call this morning. Thanks for your interest in PNI. As you have heard, this call is to discuss our results for the 2025 financial year. We posted with the ASX last night our formal results announcement, our annual report, including the audited financial statements for the year, our corporate governance statement, our corporate sustainability report and importantly, our investor presentation. We'll be speaking to key parts of the presentation this morning. The colleagues with me on the call are Alan Watson, our Chair; Andrew Chambers, Executive Director with particular responsibility for institutional distribution and international; Kyle Mcintyre, who leads Wholesale and Retail Distribution; and Dan Longan, our CFO. I'll call out the main themes and highlights and provide some context for our results. Besides the key outcomes and results for FY '25 and the key themes for the year, we'll outline the strong growth outlook. So, we'll be looking forward as well. In a nutshell, we have achieved excellent results in terms of profit growth, funds inflows and growth in funds under management as well as strong investment performance. More importantly, though, we've made tremendous progress in demonstrating the power of our platform to sustain high rates of growth and in demonstrating the success and attractiveness of our business model in a growing range of asset classes, subclasses and geographies around the world. We'll leave plenty of time for questions, which you are welcome to direct to any of the Pinnacle representatives on the call. Footnote to Slide 2 refers to the disclaimer on Slide 62 that is important, and we would ask you to read this. Slide 2 is an agenda. Slide 4 is a summary of our themes for the 2025 financial year. We have enjoyed continuing strong core growth in our revenues, in our earnings and in our Funds Under Management and expanding Affiliate profitability. And we have a very robust platform, driving scalable, diversified earnings with multiple tailwinds evident heading into the 2026 financial year. Point 1 on Slide 4, strong growth in core earnings and Funds Under Management, resulting from the growing Pinnacle platform. In the 2025 financial year, we again delivered the highest net profit after tax earnings per share and dividends per share of any year in Pinnacle's journey to date. Net profit after tax was $134.4 million, up 49% on FY '24. Earnings per share of $0.624 were up 37% on $0.455 in FY '24, and dividends totaling $0.60 per share were up 43% on $0.42 in FY '24. Funds under management at 30th of June 2025 was $179.4 billion, up $69.3 billion or 63% over the 12-month period from the beginning of the year, of which $23.1 billion was from net inflows, $18.2 billion from market and investment performance and $28 billion was acquired. Excluding acquired FUM, FUM was up $41.3 billion or 37.5% on FY '24. Our earnings per share, excluding performance fees and excluding net return on principal investments, what some people might think of as our core earnings was up 33% on FY '24. We elaborate on what we mean by our platform growing, becoming more and more valuable and boosting the rate of earnings growth later in the presentation. Point two, we continue to execute on our ‘3 Horizons’ strategy with contributions from each of the 3 Horizons, including adding new capabilities that can harvest the full value of the Pinnacle engine to accelerate growth. Point three, we have delivered a strong performance fee outcome from a range of Affiliates, but with Hyperion, the standout, recognizing that the majority of this came in the first half and that performance fees are variable over 6-month time periods, though less so over annual periods. Long-term Affiliate performance continues to be robust, and many key strategies are entering FY '26 at close to or at or above their high watermarks. Pinnacle's share of performance fees after tax, that is the impact on Pinnacle's NPAT of Affiliate performance fees was $46.6 million this year compared with $31.2 million in FY '24. This was from 12 Affiliates, though the majority was still from Hyperion this year. Point 4, record net inflows. Our overall net inflow number of $23.1 billion for the year was a record. And it is pleasing that the majority of this came from new Affiliates, Life Cycle with $14.9 billion in just under a full year since the partners commenced and Pacific Asset Management with $2.5 billion in just 8 months since we bought into them. Pleasingly, the vast majority of these Life Cycle inflows were from investors who had not been Royal London clients previously. Given the size of the impact of the Hyperion performance fees in our profit result, when delivering the first half results, I called out and acknowledged and thanked the Hyperion team led by Mark Arnold and Jason Orthman for their tremendous investment success for their clients over a long period of time. I said we at Pinnacle are so pleased and grateful to be partnered with them. Those comments very much remain true and their contribution to this year's financial result is large. As we reflect on the highlights of the overall FY '25 results now, there is another investment team that also warrants very special mention. That is the Life Cycle Investment Partners team. Just under a year into the effective commencement of the business, Life Cycle's FUM at 30th of June stood at $15.4 billion, an extraordinary start to what will most certainly be an exceptional global investment management business. Whilst these numbers will no doubt be the subject of a great deal of comment, what I would like to focus on and express Pinnacle's gratitude for, is the character and sincerity as well, of course, as the investment talent and experience of the Life Cycle partners, all of which are absolutely beyond doubt. Now one might say that it might be understandable if they got a little carried away with such rapid business success. Far from it, all our discussions with the Life Cycle partners reflect humility and have been around their focus on investment performance and their determination and commitment to delivering strong results for their clients from a strong and very high-quality business over many years into the future. We saw quickly that these people are the real deal. And everything that has transpired subsequently has reinforced that conclusion. It's also been quite wonderful the respect and acknowledgment that the Life Cycle partners, indeed, all of the Life Cycle team members have shown to the many Pinnacle people who have worked with them so intensely over the past year. We at Pinnacle are so pleased to be in partnership with Life Cycle Investment Partners. It's always dangerous for me to call out individual Affiliate teams in this way as so many of our Affiliates have achieved and are achieving outstanding success and delivering for clients. How could I not acknowledge the enormous energy and success of Matt Lam with Pacific Asset already passing the equivalent of AUD 20 billion. And Don Hamson and Dave Allen and their colleagues at Plato, which has also passed $20 billion as examples. But I think everyone would recognize that Hyperion's investment performance and the spectacular success of Life Cycle are truly exceptional. Now of course, Hyperion won't produce large performance fees over every half year or even every annual period. But on average, over a long period of time, they've been particularly strong performers. And for Pinnacle, we have 31 largely uncorrelated strategies with the potential to produce material performance fees in any year. This is why we claim that any sensible forecast of Pinnacle earnings each year need to assume a meaningful minimum contribution from performance fees in one form or another. We love having a diverse business with multiple sources of profits, including performance fees as an important element. Point five, we are entering FY '26 with all Affiliates at run rate profitability. And point 6, we have an increasingly diverse pipeline of opportunities, offering multiple sources of contributions to earnings growth as we head into FY '26. A record 83% by FUM of strategies with the ability to produce substantial performance fees were at or within 2% of their high watermarks at 30th of June. Slides 5, 6 and 7 elaborate these themes. Slide 5.1. Our Pinnacle Net Profit After Tax was up 49% on FY '24, and this was a 37% increase in EPS. Our 5-year compound annual growth rate in NPAT, diluted EPS and dividends per share are all in excess of 25% a 39% increase in Affiliate revenues at 100%, a 43% increase in our share of Affiliate profits after tax. I've made the point of our record inflows and the continued outperformance of public market strategies provides the opportunity for market share gains in public market equity flows. Point 2 provides more detail on the continued execution of all 3 Horizons of our strategy. On Slide 6, point 3 provides further detail on the strong performance fee outcome for the financial year and that long-term Affiliate performance continues to be robust and key, with key strategies entering FY '26 at or close to high watermarks. We are well set heading into FY '26. Point 4, again, further detail on our record net inflows with new Affiliates making a substantial impact. To point 5, we are entering FY '26 with all Affiliates at or exceeding run rate profitability. We will continue to pursue further Horizon 2 opportunities in time where quality and growth potential are compelling as well as in metrics, which continues to build and diversify origination capability. I think we can agree that Life Cycle has shown the benefits of Horizon 2, which will come through in FY '26. Finally, point 6, we have an increasingly diverse platform, offering multiple earnings drivers. We are opening FY '26 with FUM of $179.4 billion, 24% higher than average FUM in FY '25. We have continuing long-term outperformance across most Affiliates and strategies with 91% of Affiliate strategies with a track record of 5 years or longer, having outperformed their benchmarks. And the Horizon 2 initiatives within Affiliate, sorry, within Pinnacle and Affiliates are progressing well. Turning now to Slide 8, the financial highlights. We have a diversified platform that has demonstrated resilience in a variety of market conditions, including during volatile periods. And as mentioned earlier, we have made substantial investments and undertaken a great deal of work and built a strong pipeline of tailwinds to support ongoing earnings growth into the future. Also, as mentioned before, aggregate Affiliate FUM at 100% was $179.4 billion at 30th of June 2025, up $69.3 billion or 63% from $110.1 billion at 30th of June 2024. Details of the FUM of each Affiliate and the FUM history are provided in Slide 53. Aggregate domestic retail FUM was $39.7 billion at 30th of June '25, up $10.9 billion or 38% from $28.8 billion at 30th of June '24. The aggregate Affiliate FUM capable of earning performance fees was $50.4 billion at 30th of June '25, up $11.8 billion or 31% on $38.6 billion at 30th of June '24. Total net inflows for the year were $23.1 billion, comprising $6.9 billion of net domestic retail inflows, $4.8 billion of net inflows from international clients and $11.4 billion of net inflows from Australian institutional clients. The increase in FUM attributable to market and investment performance combined was $18.2 billion, including $4 billion from domestic retail. The ASX 300 Index was up 9.9% over the year, and the MSCI World Index up 14.4%. The NASDAQ, which is particularly relevant to Hyperion Global, was up 14.9% and the NAREIT Index, particularly relevant to ResCap was down 1.3% in U.S. dollars. Aggregate Affiliate revenue at 100% was up $261.6 million or 39% to $925 million, of which base fee revenues were up $217.8 million or 39% to $771.4 million. And performance fees up 40% from $109.8 million to $153.6 million at 100%, of which Pinnacle's share after tax was up from $31.2 million to $46.6 million. The investment performance of most of our Affiliates has been strong. The performance fees earned, speak to this and 91% of the Affiliate strategies with a track record of 5 years or longer have outperformed their benchmarks over the 5 years to 30th of June 2025. There is further performance detail in Slides 10 and 47 to 52. Slide 9 shows our record of earnings growth over the 9 years that we have been listed Pinnacle. Over the 9 financial years to 30th of June 2025, we have grown EPS by 31.8% per annum compound on average, 28.3% per annum over the last 5 years. Slide 10 provides the specifics of the 5-year performance track records of the 43 Affiliate funds or strategies. Slides 13 and 47 to 52 provide further performance detail. Slide 11 shows the detail of the Affiliate platform and highlights of the 2022, sorry, 2025 financial year. Slide 12 explains how Horizon 2 and 3 diversification is enabling our platform to deliver earnings growth through market cycles. The outcomes to date, specifically over the past 5 years are set out in this slide. Higher fee and diversifying international and retail FUM in aggregate have grown from 29% to 51% of total FUM over the past 5 years. And this represents, I think, about 2/3 of base Affiliate revenues. Slide 13 shows some detail on our performance fee record and opportunity. As mentioned, we are growing the size and diversity of our performance fee potential and look forward to further large performance fee outcomes over future years. Slide 14 shows our 19-year FUM and net flow history. Our domestic and international institutional, retail and wholesale pipelines each remain strong, and our client base is increasingly diversified. including overseas as we grow and evolve, recognizing changing market circumstances. Slide 5, sorry, slide 15 elaborates the evolution of our FUM by client type, showing how our Horizon 2 build-out of domestic wholesale and retail and international distribution functions has led to a greatly expanded and diversified client base. Slide 16 focuses on our FUM evolution and the growth in FUM in private markets asset classes and in internationally domiciled FUM. Slide 17 shows the evolution of our international platform by Affiliate and the growth in FUM from clients located outside of Australia in a range of countries. And again, slide 18 provides some detail on the increasing diversification of our business. Diversification by Affiliate, by asset class and by strategies with the potential to earn performance fees. The result is greater resilience of our core earnings. Slide 19 updates on our more recent major industry awards. Slide 21 has detail on our revenue and margin performance and Slide 22 has further detail on our financial results. Slide 23 provides some balance sheet commentary. Now Section 3 of the presentation provides an institutional and international market update, and Andrew Chambers will explain the factors at work in these markets during question time and in one-on-ones. Section 4 of the presentation provides a domestic wholesale and retail market update, and Kyle Mcintyre will elaborate during questions and one-on-ones. Moving to Section 5, titled Growth Agenda, Slides 28 to 30. In Slide 29, we remind shareholders that we think in terms of 3 Horizons of growth. Horizon 1 is the main game. It is continuing to pursue net inflows into existing strategies of existing Affiliates. We remain very confident of our ability to continue to do that. We conservatively estimate the remaining capacity of the Affiliates' existing strategies at $500 billion. So, there is plenty of Horizon 1 runway left with the attendant strong gains in operating leverage that will be accompanied by such growth. Horizon 2 is where Pinnacle or Affiliates undertake inorganic expansion and expense the cost on their P&L. Expansion of distribution capabilities, including offshore, incubating new Affiliates from scratch, Affiliates adding new strategies and so on. New Affiliates incubated outside of Australia so far include Aikya and Life Cycle in the U.K. and Langdon in Canada. Metrics has had large within Affiliate Horizon 2 initiatives in recent times as it has added new origination capabilities to further boost future growth. Horizon 3 is where Pinnacle Capital is invested to acquire interest in existing profitable fund managers, then helping accelerate their growth, including by adding Pinnacle distribution services. Pacific Asset Management in the U.K. and VSS in the U.S.A. are recent examples, domiciled overseas. We plan to make more such investments. We are, of course, acutely aware of the risks of Australian companies making new advice investments overseas, where they are unaware of local conditions or requirements for success or which they are ill-equipped to manage or which are somehow off strategy or outside the core competencies and the core ideology of the company. We have been working on the overseas opportunity for a long time and have extensive capabilities already in place in the large addressable markets. We are continuing to carefully add infrastructure and distribution capabilities overseas ahead of and simultaneous with our expansion. We are staying very clearly within our core capabilities and ensuring that we understand the requirements for success and confirming target market demand, including from Australian investors before embarking on new ventures. We are finding that the Pinnacle model is just as effective and just as much in demand in most overseas markets as in Australia. We are further proving this progressively as we continue along the expansion path. The opportunities are enormous, but we are proceeding at a sensible pace, a pace at which we are sure we can deliver on our promises, including maintaining the highest quality standards. Slide 30 provides a summary of the drivers of our future growth, utilizing the excellent platform already in place and continually being expanded in an orderly and clearly thought-through manner based on our deep knowledge of the markets in which we operate. Slide 31 elaborates our Horizon 2 activities. We have maintained Horizon 2 investment at around $4.5 million per half year, the same rate as in the second half of FY '24 and lower than the peak of the second half of FY '23 and first half of FY '24. Our record is that the returns on such investments have been very high. That is the outcome virtually always if they are executed well and we only undertake initiatives of compelling quality. We can do this because we are spoiled for choice. Slides 32 to 35 set out in additional detail the significant opportunity Metrics has unlocked in asset-based finance, as a result of its Horizon 2 growth program undertaken in recent years. Metrics now owns origination across private debt and credit, commercial real estate and equity and consumer and business finance, which are extremely large addressable markets and will provide additional investment products for Metrics investors. This growth program has been at significant cost to metrics, and these slides also set out that cost during FY '25 as well as the impact on Pinnacle's net profit after tax for the year. We remain extremely supportive of this program, given the additional growth opportunities now created, and we remind shareholders that this investment has been made in partnership with Metrics, demonstrating their ongoing commitment to growth and the strong degree of incentivization and alignment to achieving those growth objectives. Slide 36 provides summary updates on our November equity capital raise and the most recent Horizon 2 and 3 investments, Life Cycle, Pacific Asset Management and VSS. It is early days, but they are all going very well. Now to turn our attention to Section 6, corporate responsibility. Looking at Slide 38, our sustainability strategy. As Pinnacle continues to expand, our dedication to fostering a sustainable, inclusive and resilient firm remains fundamental. As illustrated here, our guiding pillars of purpose, people and planet provide clear direction and ensure we uphold our commitment to actions that align with a responsible and impactful future. Pinnacle was certified as a family-friendly workplace in FY '25. We strive to create a workplace culture where equality, integrity and respect are core values, and this will be further embedded with our work and family action plan now in place. I'm also immensely proud to highlight the remarkable work of the PNI Foundation. As shown on Slide 40, our group's overall support provided to charities totaled $1.3 million in FY '25. This encompasses $750,000 of total donations made by the foundation to our 17 long-term charity partners as well as $375,000 made by Affiliates. Furthermore, the additional discretionary donations sponsorships and workplace giving by our employees embodies our deep-rooted commitment to making a positive impact in our communities. Now in conclusion, referring to Slides 43 and 44, I would like to remind shareholders once again of the basis on which we remain so confident of our company's ability to grow and prosper, which is our distinctive business model that was designed specifically to ensure sustained investment excellence. This is embedded in our DNA, call it our core ideology, our fundamental beliefs which are the basis on which our business was built and will continue to be built, and which will endure and guide us for many years, hopefully, decades into the future. This is the source of our competitive advantage. The most talented and experienced investment professionals love it. Importantly, their clients love it. These basic principles are applicable to a broad range of asset classes, geographies and markets. They will sustain our growth as we evolve and adapt and as the world changes. And we'll ensure we don't go off strategy or outside our core competencies or seek to grow in a way that is haphazard or illogical. We have a core ideology, which is clear and fundamental to everything we do. Can we please now invite questions? Please note the Affiliate has additional information that people are often interested in, and please address your questions to any one of our key team.

[Operator Instructions] Your first question comes from Nick McGarrigle with Barrenjoey.

The additional disclosure around metrics was really helpful. I thought it might just be worth digging into what the outlook for profitability on the Horizon 2 initiatives, Navalo might be in FY '26, given they're obviously going through the process of consolidating and there were some comments in the presentation around getting that business to profitability. Just trying to work out what the staging of that might be and what some of the key initiatives are to deliver that.

Thanks, Nick. Thanks for that question, which is very important. I might say kind of nice try if you're trying to pin us down to forecast for FY '26. But it is true that we can provide more information. We've said that Navalo is the sort of name that's being given to the whole of that, call it, noncore activity base will be profitable next year, which it was not in FY '25. But I think we'll ask Dan and/or Chambers to answer that specifically.

Thanks, Ian. So, in terms of the staging, Nick, we provided some disclosure in that slide about the specific one-off item around performance fees in '25. That obviously won't recur, so that's a positive. There are some one-off costs associated with the acquisitions as well. They won't recur. And then we've talked about the consolidation of those various platforms into a single platform, and there'll be synergies released as a result of that. And we expect that to happen progressively throughout FY '26. The key earnings driver, though, will be the advent of asset-backed lending funds, which will sit behind that origination capability and take that capability into Metrics client channels. And we think that, that will happen within this calendar year, and then the earnings will flow from that thereafter. We've made a statement that we expect this part of the business to contribute positively to earnings in future periods. The exact timing is uncertain, but hopefully, that gives you a bit of color.

Yes. And it does include FY '26 that we've said there. But as Dan said, getting the origination in place, that was important and a major, major development, but that's just the beginning. We now need to do the work of raising funds based on those origination capabilities. And of course, that is the agenda. That's what it's all about. raising funds based on growing origination capability. The other task for metrics this year, as Dan said, it will happen progressively is to put those various businesses together to extract synergies. That means operating synergies, that means lower cost of funding, et cetera. That will all happen progressively. So that will not happen from the first day of FY '26, that will happen progressively through. And some of those benefits will really start later in FY '26 and be fully apparent in FY '27. But FY '26 will definitely be significantly improved profit-wise on FY '25, which was a sort of an acquisition year.

Yes. Understood. That's clear. I guess the Horizon 2 initiatives there, there's a $7 million write-back of the performance fees that goes away. The operating costs of $16 million, does that represent people and systems that have been invested in ahead of consolidating these platforms?

Yes, but it also represents some external costs associated with the acquisitions, and they won't recur.

So, of the 16 million, there's some that will recur and there's a big chunk that won't.

Correct.

That's helpful to understand. Maybe just to switch on to Life Cycle. I think your blended margin across the business on the kind of management fee side is about 44 basis points. Is it safe to assume that Life Cycle is coming in at around that level just given the demand and the retail mix in their book? Or is it dilutive to that kind of group blended margin of 44

So, I'll just say just very quickly. Obviously, Nick, we're not going to disclose fee rates on the business. I think it's fair to say that you would expect the sort of large early FUM into a new Affiliate is probably at lower rates than the average will settle at after a while. But, and there's a lot of in-store, Aussie domestic in-store in those numbers. Over time, of course, the average fee rates of Life Cycle will be as good as any of the global equities managers, reflecting their quality and the demand for them and the fact that we will absolutely be selling them into the Aussie retail and wholesale market and the U.K. and Europe retail and wholesale market and so on and overseas, which are at higher fees. But at the very beginning, it's dominated by Aussie in-store, which tends to be somewhat lower fees than the others. But Dan, did you want to say something about it?

I think you've answered the question really. The only thing I'd add to that is to remind people that these 3 things we've been talking about for a while that have led those average fees to float up, which are the growth of wholesale and retail now also increasingly offshore, the growth of international FUM and the growth of our private markets businesses, all of those have higher than average fee rates, and those trends remain intact, even though there's a bit of a mix shift change in this half.

I mean I think you made a comment earlier that a lot of the assets that Life Cycle raised to date have come from new clients to the manager. Can you talk about, I guess, the pipeline looking forward in terms of where there's still capacity, the most meaningful capacity upside across their strategies and what that distribution strategy looks like over the next 12 months?

So, as you imagine, Nick, more of the front-ended mandate wins have been domestic in Australia. As a function of the fact, we weren't able really to market to Northern Hemisphere investors until the restraints were off, obviously, after January. So, you expect to see those mandates to the degree that their funds start occurring into this financial year. The spread of those, you can imagine we're seeing pretty strong interest across all geographies. So, Europe, Middle East and Africa, primarily in Europe and also the U.K. in North America out of Canada, but also the United States, not just in the global equity strategy, but also in the U.S. equity strategy, which we intend to launch later in this calendar year. And then also the Asia Pacific region areas like Japan as well. There's, and New Zealand, there's strong interest in the business as well. So that's really the shape of it. But obviously, you can imagine there's more front-ended flow coming from Australia initially, and those have been at better than average rates you might expect to see in global equity in Australia is probably the way I'd summarize it. So, we feel good about the pipeline. A lot of the mandates that are funded have been done with our consultant ratings, which is another really important point. So rather than top-down recommendations from a consultant to a client being bottom-up driven from face-to-face interactions with our underlying institutional investors. So that bodes very well when eventually the consultants all embrace it and support you globally.

Your next question comes from Tim Lawson with Macquarie.

I'm probably going to ask the same questions as Nick to try and get slightly more information. Just in terms of metrics, can you just sort of explain the degree to which they're now effectively fully resourced for the strategies they want to pursue and therefore, effectively built-up resourcing effectively ahead of FUM to a degree? And then are we likely to move into a phase around your sort of profitability comment where that resourcing will now grow as required rather than ahead of FUM?

Yes. So, the answer to that's slightly nuanced, and we'll ask probably Andrew Chambers and Dan to answer it. The overall comment I would make though is that metrics have been on a mission to grow big quickly, and they added a lot of resource ahead of, and in fact, at one stage, they added a whole lot of resource and then the COVID came and so on. So, they definitely added a lot ahead of. And you need to do that when you're building things. So that certainly has been the case. But having said that, they will need, unlike equities type managers, they will need to add some more over time, but not at the rate that they did while they were building. Is that right?

Yes, I think that's exactly right. And the only other thing I'd add is that there will also be some synergies released as a result of putting those origination platforms together.

And maybe the timing of that debt?

As we said earlier, that will start to happen from now. So, they've completed the acquisition of BC and Taurus in early July. That work is underway, and we think that will be realized progressively over this year and next.

Tim, just in terms of total addressable market, I mean, the asset-based finance market or the asset-based lending market itself, we're talking over USD 9 trillion. And we're only at the start early pioneering stages of that. So, [CALPUS], all the U.S. state pension plans starting to put $1 billion plus mandates with various managers at the front end of that trend. And the fact that Metrics has actually built and control its own origination platform is the majority of participants work with originators, but don't actually own them. And you're really controlling your own deal flow and your credit quality and your deployment when you do that. And so, we think that's a real competitive edge as we go into this, what's going to be a huge market and allocation market for institutional investors and private wealth.

And if you look, just looking at that Slide 32, which shows that quite sort of clearly, so 32, 33, I think. Just in terms of the, any new areas that you'd expect to sort of add to those tiles over time? Or do you think we're sort of metrics, while the capacity is here to grow and the opportunity is there, is the resource sort of tiles all done?

I think by and large, but I think there's areas like insurance premiums, I think there's receivables where they can do a lot more work. So there are other areas of asset-based finance, which they might expand into, but they are broadly well set today with the existing platform that they have.

Yes. I think I would describe it that the categories are largely there. The subcategories and as Chambers said, they can add enormous amounts of FUM within these kind of types of assets that they've put in place now. Asset-based finance is just enormous on its own as is their core business. But they'll keep infilling, I think, metrics ambition is very large.

I think the other interesting thing is where they can sell those strategies. So, they've obviously started in institutional in Australia, then by going into the retail market through listed funds, unlisted funds, they've only really scratched the surface internationally in chamber, but there's a huge demand for that capability out.

And equally importantly, it doesn't cannibalize the existing business because these have very low correlations, the asset-based lending with their traditional corporate and institutional lending strategies. As a function of these things effectively are collateral-based self-amortizing loans, very short tenure in nature, very low correlation. So, it can be sold in addition to rather than instead of the existing offering.

Okay. That's really clear. And then just on Life Cycle, I appreciate the initial constraints. But in terms of, is there anything else that sort of held up sort of previous relationships or previous customers sort of funding into those strategies in terms of obviously, you've mentioned you expect those flows to come, but is there anything that's held up post the initial constraints that funding?

Institutional investors have very long decision-making processes. They go through lots of various committees for approvals through boards, investment committees. There's on-site due diligence for operations as well as investment. So, they tend to have very long time Horizon, notwithstanding the fact they could have been a previous investor with the business. And then there are certain clients, of course, which may not come on board as a function of the fact that the fee negotiation you might have, you may not be prepared to do that particular fee level as well. So, it just might be a pricing question. So, it's varied in nature, but we still feel very confident about the pipeline ahead.

Yes. And then just in terms of FUM that has come in, to the extent that that's expected to be fully funded? Or is there a sort of highly sort of certain pipeline as some of those flows sort of get filled up?

Some of the clients have wanted more capacity. Yes, sorry... Yes. So, people put in 500 and then, but there's 500 coming like that you sort of know is coming, like is there a certain pipeline and an uncertain pipeline?

There's plenty of that which is unfilled capacity today, people reserve capacity. Those things have, they're time-based typically. So, you either use it or lose it over a period of time. But yes, is the answer. So, there's unspoken for capacity so far in that pipeline.

I'd just add to that, Nick, in retail as well, you typically see a lag effect as they get, as these get rolled out across advisers and their underlying clients, tends to snowball somewhat as they get rolled out. So, there's definitely a lag effect in retail as well from allocation through to full funding.

Thank you. That is all the time we have for questions today. I'll now hand back to Mr. Ian Macoun for closing remarks.

Okay. I'm sorry, it looks like I went too long. I hope we had enough time for questions. So, look, it just remains for us to thank everyone for coming on the call. As I said at the beginning, thank you very much for your interest in Pinnacle. We will now be having a lot of one-on-one and group shareholder meetings over the next several days, which we look forward to. And it's onwards and upwards. Back to work for FY '26 now. So, thanks very much for joining, everybody.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.