Platinum Investment Management Limited (PTM) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to today's Annual General Meeting. My name is Guy Strapp, and I'm delighted to address you as Director and Chairman of Platinum Asset Management Limited. I am informed by the Group Company Secretary that there is a quorum present, so I declare our 2022 Annual General Meeting open. The Notice of Meeting dated 14 October 2022 was published on the ASX website and sent to shareholders, and I will take the notice as read. I would like to begin by acknowledging that I am speaking to you today from the lands of the Gadigal people of the Eora Nation. I also acknowledge the traditional custodians of the various lands on which each of you join the meeting from today. I hereby pay my respects to their elders past, present and emerging. This year, we are holding our first hybrid AGM, which provides you, our shareholders, with the option to either attend in person or via the online meeting platform. We hope that in doing so, we have been able to encourage broader participation amongst our shareholders. Please allow me to introduce your Board of Directors: Firstly, the Executive Directors, Andrew Clifford, Chief Executive Officer and Co-Chief Investment Officer; Elizabeth Norman, Director of Investor Services and Communications; Andrew Stannard, Finance Director; Kerr Neilson, Co-Founder; Anne Loveridge, also Chair of the company's Audit, Risk and Compliance Committee; Brigitte Smith, also Chair of the company's Nomination and Remuneration Committee; Stephen Menzies; and Philip Moffitt. We also have present Rita Da Silva, the Ernst & Young partner in charge of auditing the consolidated group's financial statements. Andrew Clifford will provide a formal CEO update directly after my address. He will also provide an informal update on investment performance and global markets in his role as Co-Chief Investment Officer after the formal business of the meeting has been concluded. Before I get started, can I please remind those attending in person to ensure that your mobiles are turned off. Thank you. For those shareholders present in the room, you should have received a voting card to enable you to cast your votes. If you have not received your voting card, please see one of the Computershare representatives at the registration desk. For those shareholders who have joined us online, in the top right corner, you should see 4 icons. You can toggle between these at any time during the meeting. When you select the vote icon at the top of your screen, you will see each of the resolutions that you can cast a vote on. To cast your vote, simply select one of the options. There's no need to hit the submit or enter button as the vote is automatically recorded, and you will see a green tick beside each resolution you have voted on. You have the ability to change your vote right up until the time I declare the meeting closed. In terms of voting today, all resolutions are being voted on by poll. Shareholders in the room and online can now cast their votes on the resolutions included in the Notice of Meeting, and you can do so until the poll is closed. Voting will remain open during the meeting, and I will give you a warning when voting is about to close. All shareholders present in the room, online or by phone, will have the opportunity to ask questions in respect of the items of business for this meeting. For those shareholders in the room, if you would like to ask a question when we move to question time in relation to the relevant item of business, please raise your hand and a Platinum representative will bring a microphone over to you. For those attending online, you will need to select the Q&A icon at the top right. Select the topic your question relates to and then type your question into the box at the bottom of the screen and select send. You're able to submit questions on any item of business at any time during the meeting. However, these will only be answered when we get to the relevant item of business. If you're attending online and prefer to ask a question verbally, an audio facility is available. To use this service, please follow the instructions provided on the online platform, which are detailed below the broadcast. You will be provided with a phone number and meeting ID number to dial on your phone. Once you will -- once joined, you will sit in a waiting room. When you are ready to ask a question, please press star 9 on your keypad, which indicates that you have a question. When prompted by me, the operator will unmute your line and ask you to introduce yourself to the meeting and then ask your question. Lastly, this meeting is being recorded, and the recording will be made available on Platinum's website in the following days. Before we move to the formal business of the meeting, I would like to share with you my reflections on the past year. During the last financial year to 30 June 2022, global equity markets, measured by the MSCI All Cap World Index net in A$ fell by 8%. The strong first half of the financial year was more than offset by a 16% fall in global equities during the second half of the year as the prolonged bull market finally came to an end. This fall reflected the impact of a broad raft of geopolitical and economic events, including the Russia-Ukraine war, rising inflation and the consequential tightening of monetary policy. As a global equity manager that is heavily exposed to both rising and falling markets, Platinum's own share price decreased dramatically, closing the 2022 financial year at $1.74, down from $4.91 at the start of the financial year. The decrease reflects a range of factors, some of which were within our ability to control, most notably our investment performance for clients, and some of which were not, the impact of the general market declines on our fund-based revenue and a broader derating of the asset management industry sector by investors. In this challenging environment, it is important to consider Platinum's long-term business strategy, which is to deliver good investment returns to our clients, maintain a strong team and a distinctive culture, grow funds under management, both offshore and onshore, and to ensure we have efficient and scalable infrastructure. This year, the Board and senior leadership team were actively engaged in refining this strategy and are fully aligned and committed to delivering on it. Andrew Clifford will provide more insight on Platinum's business strategy during his CEO update. Specifically, in relation to investment performance, no one likes negative returns. Platinum's International, Asia, Japan and European funds all outperformed their market indices for the financial year to the 30th of June 2022. With the sell-off in markets, we are starting to see the benefits of Platinum's differentiated investment approach emerge. For example, Platinum's flagship fund, the C Class International Fund returned negative 5.4% in the 6 months to the 30th of June 2022 against the MSCI All Cap World Net Index in A$, which returned negative 15.6% for the same period, outperforming by 10.2%. Similarly, Platinum's flagship Asia fund C Class returned negative 8% in the 6 months to 30 June 2022, with the MSCI All Cap Asia ex-Japan Net Index in A$ returning negative 11.5% for the same period. However, it is abundantly clear to us that FUM growth, and thus, growth in revenues and, ultimately, shareholder returns, is largely dependent on us being able to deliver consistently good absolute investment returns. Andrew Clifford will also spend time during his informal address to discuss investment performance and his outlook for the funds and global markets more generally. Profit before tax decreased by 37% to $147 million for the year ended 30 June 2022, and earnings per share were down by $0.107 to $0.175 per share. The main contributor to the decrease in profit and earnings per share was the largely unrealized losses on our seed investments. These contributed losses before tax for the 2022 financial year of $24.1 million as compared to the 2021 financial year when there were gains before tax of $43.9 million. Underlying profit after tax, excluding gains and losses on seed investments, net of tax, was down by 10.9% to $118 million. Total revenue decreased by 6.2% to $253 million for the year ended 30 June 2022. There was a 7.3% decrease in management fees as a result of the 8.6% decline in average FUM. The decrease in management fees was partially offset by a $2.7 million increase in performance fees to $6.7 million. Funds under management at the 30th of June 2022 was $18.2 billion, a decrease of 23% from the 30 June 2021 closing funds under management of $23.5 billion. The decrease in FUM was the result of negative absolute investment returns and net outflows. The Board declared a 2022 final fully franked ordinary dividend of $0.07 per share. This, together with the interim fully franked ordinary dividend of $0.10 per share, took the final -- took the total dividends for the 2022 financial year to $0.17 per share, a yield of 9.8% based on the share price at the 30th of June 2022. The company has delivered an average dividend yield of 6.4% over the past 5 years. As announced to the market in August 2022, Kerr Neilson will retire as a Nonexecutive Director of the company following the close of the AGM today. On behalf of the Board, I would like to acknowledge Kerr's significant contribution having served on Platinum's Board as a Nonexecutive Director since August 2020 and an Executive Director since Platinum's listing in May 2007. As the founder of Platinum in 1994, Kerr has been an instrumental figure within the Australian funds management industry, introducing a generation and beyond of investors to global equities. We have greatly valued your guidance and contribution, and we thank you for your commitment and service. We wish you all the very best, Kerr. The Board is reviewing its composition and skill set as part of ordinary succession planning. A number of resolutions will be put to the meeting today concerning the reelection and election of Directors. Anne Loveridge and Elizabeth Norman are both seeking reelection. Additionally, Philip Moffitt, who joined the Board on 17th of December 2021, is seeking election. These Directors will each provide a short speech later in the meeting in support of their election or reelection. At the 2021 Annual General Meeting, we received a first strike against our remuneration report expressing dissatisfaction with our remuneration framework and outcomes. The Board has listened carefully to shareholders and proxy adviser feedback and has taken significant action to address the concerns raised. In particular, we included enhanced and a more transparent disclosure in this year's remuneration report regarding our measurement criteria and related outcomes under the short-term incentive plans for our Executive Directors. The Board also introduced maximum caps on variable awards for our Executive Directors, having regard to peer and industry benchmarking information. Supported by the framework changes outlined above, key reward decisions for our Executive Directors for the 2022 financial year were as follows: Total remuneration received by the Executive Directors fell by 24% on the prior year driven primarily by a 44% reduction in aggregate of cash, short-term variable remuneration. Our CEO, Andrew Clifford, once again, did not receive any variable remuneration. The other 2 directors, Elizabeth Norman and Andrew Stannard, each received short-term incentive awards equivalent to 55% of their maximum potential with at least 1/3 received in the form of deferred equity rights vesting after 4 years. The Board will continue to keep our remuneration framework under review to ensure that it remains appropriate. In addition to the resolution on the remuneration report, there are also a number of other important resolutions pertaining to remuneration, which, as a matter of good governance, will require a shareholder vote at today's meeting. With Kerr's gradual transition out of the business over the last few years, the proportion of share ownership by our executive staff is now low relative to that of our peers. Accordingly, we are seeking shareholder approval for the grant of performance rights to the Executive Directors under the Platinum Partners' Long-Term Incentive Plan. This plan was approved by shareholders at last year's Annual General Meeting and, to date, no awards under the plan have been granted to our Executive Directors. In recognition of Andrew Clifford's lower fixed compensation in comparison to industry peers, the Board has set the face value of his proposed award at $1,500,000 which is the equivalent of 2x the median salary of CEOs in comparable financial services companies. The face value of the proposed awards for Elizabeth Norman and Andrew Standard have been set by the Board at $450,000 each, which equates to 1x their base salaries for financial year 2022. As the key personnel responsible for driving Platinum's future business growth and profitability, the Board feels it is important to grant performance rights to our Executive Directors to retain key talent and to ensure that their remuneration is aligned with shareholder outcomes. Ladies and gentlemen, that concludes my update. I thank you for your attention and now invite Andrew Clifford, our Chief Executive Officer, to provide an update on Platinum's general business.

Good morning, everyone. When discussing the funds management business, observers often note the endless flow of new savings that require management. But the most notable feature of the industry is that barriers to entry are low and over time have fallen. Today, an investor can select from a wide variety of offerings within and across different asset classes. Today, the choice is multiples of what would have been available 10 to 20 years ago. So in such an environment, how does one compete? One approach is to build scale that may result in advantages in sales, marketing, IT and operational efficiencies. Organizations such as BlackRock, Fidelity and Vanguard have in the order of $7 million to $10 trillion under management today. If such a scale is not available, I can only see one alternative: Remain focused and provide a highly differentiated offering that can attract attention in an extremely crowded marketplace. Platinum's strategy is to provide a highly differentiated offering. And the key elements of our strategy are as follows: firstly, deliver good investment returns for our clients. Now I'd just like to clarify here and for the rest of the day that when we refer to clients, I include both the investor in our funds and their advisers who have a very important role to play in our business. From the outset, we had a view that our investment approach would produce good investment outcomes for our clients. This remains the cornerstone of what we're here to do and remains our key focus. Indeed, in my incoming Managing Director's letter, in 2018, I wrote, "If we were successful in establishing the investment business we had envisaged, delivering good outcomes must always remain our primary goal. Our observation has been that many others start with similar intentions and achieve initial success only to give way to the imperative of gathering assets as investment performance declines." I'll come back to the topic of investment performance a little later in this presentation. The second element of our strategy is to maintain a strong team and distinctive culture. In funds management, it's pretty clear that your employees are your most critical asset, and that's true across all aspects of our business. I will, however, here focus just on the investment team for the reasons already outlined. At Platinum, we've long focused on the development of our investment team, one aspect of which is how we share investment decision-making among our experienced and capable team members. Today, we have 12 portfolio managers, and on our 2 key strategies, global equities or otherwise known locally as our Platinum International Fund and Asia ex-Japan equities, or the Platinum Asia Fund, each have today 3 co-portfolio managers. This has benefits with respect to internal debate around ideas but also in relation to succession planning, something I believe we have done well at Platinum. There are many aspects of our distinctive culture that I could highlight, but I will again focus on just one. I don't know a funds management business that doesn't claim to put client interests first, yet, there is such a conflict for the business and the individuals within. For example, the part of least resistance in a bull market is to go with the momentum, build the assets under management, collect the fees. And if it all falls apart at the end, the pain is predominantly felt by the client. Again, from my 2018 letter, I stated, "we believed it more important to minimize the risk of loss for clients than achieve the maximum return possible even if at times this meant our investment returns would lag behind the competition." This is more easily said than done. By following this path, if clients are dissatisfied with missing out on the excitement at the end of a bull market, the consequences are felt by the business and the individuals making these decisions. The next element of the strategy is to maintain and grow our Australian business. Over the last decade, we have invested heavily in our engagement with financial advisers and our end clients. Platinum's client base is predominantly retail, that is, small investors who access our products via self-managed super and discretionary investments. Having always engaged with advisers, we sought to develop our engagement further with the establishment of our team of investment specialists nearly 10 years ago. Today, we continue to build upon the production and distribution of timely and engaging investment content via webinars, videos, podcasts, articles, distributed through a range of mediums, including social media, advertising and external content distributors. We attend key industry events, work with important industry representatives, such as the Financial Planners Association. Our annual client roadshow, the next one in March, has been held since 1999, and we'll see a return to a physical event next year with an online stream allowing us to reach a much wider audience. We have consistently expanded our product offerings to attract different client groups. And in recent years, this has included the launch of our quoted managed funds for our 2 largest strategies, International and Asia ex-Japan. We expect to launch a new fund that aims to take advantage of the wide variety of investment opportunities arising from the world's move to decarbonize in the decades ahead. This fund will be made available to Australian and New Zealand investors via a dual access managed fund structure, subject to regulatory approval, which will allow investors to acquire units either through a traditional managed fund application process or via units quoted on the ASX. Another issue of increasing importance for clients is ESG. Our approach has long been that material ESG issues are important to any long-term assessment of a potential investment, though today, the market requires that we demonstrate a more explicit consideration of ESG. We have in place today our initial ESG framework, which we will continue to develop and refine. The fourth element of our strategy is to capitalize on the attractive and deep offshore institutional opportunity. While we've always had a focus on offshore opportunities, this has stepped up in recent years with the availability of key strategies in our UCITS products for the European market and the establishment of our London office. This was followed by an agreement with AccessAlpha to distribute our strategies into the North American market. Our efforts in both markets were severely hampered by travel restrictions as a result of COVID-19. But since late last year, our cycle of travel to meet with clients and prospects has returned to normal. In October this year, we launched our health sciences strategy under our UCITS structure for European investors. It is our view the biotech sector, which has sold off heavily in the last year, will be one of the most prospective for investors in the years ahead. Our health care team have a truly global focus in this sector, which is much broader than many of our peers who tend to be particularly focused on the U.S. opportunity set. As such, we're of the view that this will have a particular appeal in Europe. The fifth aspect of our strategy is to ensure an efficient and scalable infrastructure that prioritizes client service. Behind the scenes in a funds management operation, there is a requirement to process high volumes of transactions and to maintain compliance with an increasingly complex regulatory environment. Errors on either front can be costly and can have the potential to cause significant reputational damage. Historically, our record on this front has been excellent. Currently, we're in the midst of a major upgrade of our operating systems across the business that will provide a strong platform into the future. So on to our outlook. So when one considers the 5 elements of our strategy, executing on the last 4 is necessary for the business to grow in the future but not sufficient. For the business to return to growth, we must prove the worth of our investment process to both existing and potential clients. And this needs to come in the form of investment returns. Historically, our investment approach has provided good outcomes by avoiding the downside of significant bear markets that have occurred over the last 28 years. It is an approach that I believe should be judged over the full extent of the stock market cycle. On this front, we're of the view that we are in the early stages of a significant bear market in global equities, where we will have the opportunity to prove the worth of our approach. As at the close of business on Monday, the Platinum International Fund is flat year-to-date, a period that coincides with the peak in global equity markets, while the market has fallen over 10% in that time frame. There is still work to be done as this bear market unfolds, but the more difficult environment that we find ourselves in should be to our benefit. Once we have clearly demonstrated the success of our approach, it will be then that we can take advantage of the work we have done in providing greater access to our products for all clients and building relationships domestically and offshore and return the business to growth. Thank you. And just before I step down, I'd just also like to make my thanks to Kerr. I had the good fortune 34 years ago to come out of university and join him at Bankers Trust. I have had -- I've got one of the greatest jobs in the world, along with my investment team. So it's been of great fortune that opportunity that Kerr gave me, and I'd like to thank him for it and for the 34 years of working together. Thank you.

Thank you, Andrew, for your update. Ladies and gentlemen, we now come to the items which comprise the formal business of the meeting, as outlined in the Notice of Meeting. Voting on all resolutions will be conducted by way of a poll. Each resolution set out in the Notice of Meeting is to be considered as an ordinary resolution and as such, must be approved by a simple majority of the votes cast by shareholders. I'll address any questions or comments that have been received under the relevant items of business, and I'll take questions firstly from any shareholders who are attending in person, then from shareholders joining us online and, finally, from shareholders using the audio facility. Shareholder questions received prior to the meeting, which are relevant to the business of the meeting, will also be addressed under the relevant item of business. The first item of business is to consider and receive the consolidated group's financial report, directors' report and auditor's report for the financial year ended 30 June 2022. There is no vote on this item. These reports are published in the 2022 annual report, which was lodged with the ASX on the 24th of August 2022. The purpose of this item is to provide an opportunity for shareholders to ask questions and make comments about these reports. Shareholders will also have the opportunity to ask questions of our auditor, Ernst & Young, relevant to the conduct of the audit and the auditor's report. Please bear in mind that we have a separate item of business on the remuneration report as part of Resolution 4, and we'll be taking questions on remuneration matters when we come to that item. I'll now invite comments and questions on the financial statements and reports as well as questions regarding the general business of Platinum, and I'll start with questions in the room.

Thank you very much for the opportunity to be here in person. I traveled down from the Lower Hunter today. And I can't believe that we went about 3 decades without getting to where we are at the moment. So I'd just like a little bit of indication of how long it might take for the benefits of the approach to occur, but more particularly, I jotted down, in this digital age of doing business, what reassurance can you give that the company's business isn't going to be hacked from the back door?

Andrew, do you want to speak to the first part of that, and I'll deal with the cyber?

So on the question -- can you hear me? Sorry. So on the question of how long. Yes. I mean things can change in markets very quickly. And at the moment, our portfolio is positioned dramatically differently to the index. And ultimately, what people are going to look at is a combination of our -- as we anniversary 1- and 3-year returns and looking at the absolute levels and also the relative to the market. So on that front, we're making really good progress to that point as in we have caught up substantially a lot of the underperformance of the last couple of -- or in fact, we've caught up over the last couple of years. We're close to catching up 3 years, but we have to keep making progress on that. So that's a day-to-day proposition. But it can turn around quite quickly in terms of those returns. And then that has to sink into the minds of investors as well. So one of the things that I have experienced going out to look at -- meet with clients offshore, is that prior to COVID, even when our returns were looking reasonable, people would be saying, "Well, we're pretty happy with what we've got." And what's happened in the last year is a lot of people have done some real damage to their clients' portfolios. So there is that disturbance in the marketplace where people are looking for something different. We're yet to probably do enough to really grab their attention, but we're on the right path. That's all I can say. On the cyber...

I'm happy to make a few comments. From the Board's -- and there may be a more detailed answer. But from the Board's perspective, we've closely scrutinized the risks around digital at each meeting. There are 2 main areas of focus, 1 on data theft and 1 on the ransomware scenario. We've had discussions on where we sit in terms of having a look at reviewing the U.S. National Institute of Standards, their cybersecurity framework and the pillars that they put in place in terms of our ability to identify, protect, detect, obviously, when something is potentially remiss. And then a couple of the points that are really important in terms of the media and what's happened over the last month in Australia is how you respond and how you recover. We don't have a perfect set of answers for that. It is ongoing work. But we continue to look at things like our escalation protocols and engage with expert testing. Hackers have the ability to do what they will do and we just have to ensure the best of our ability that we protect the valuable information of clients, et cetera. I don't know, Andrew, did you want to -- thank you. Anyone else from the room?

Given the impact on profit, the seed fund elements ahead, could you just give some more detail as to what they are? And what is your response going forward for that area of the business?

Sure. No, I don't have all the -- some of the specificity. Yes, obviously, the year before...

[indiscernible]

Right. Okay. So the year before, the benefit to the bottom line was in the order of $40 million in a bull market. And this year, as I indicated, there was a loss pertaining to those seeds. We take a long-term view on the seed. It's to incubate, if you like, and nurture what we think are sensible product ideas in certain jurisdictions and platforms, where you can't otherwise accumulate assets unless you have a critical base and, more importantly, a track record of performance. We're not product aggregators in the sense that we don't launch hundreds of new products. We do it very selectively and carefully, as Andrew indicated, with the global transition fund that we recently just seeded. So it's an occasional event for Platinum, not something that we're doing every month. But we do it in the interests of being able to provide what we think are products that we have capability and differentiate us in the marketplace, rather than necessarily just going with the flow and just launching me-too products that everyone else is doing. So in volatile markets, those sort of outcomes occur, and we are experiencing very volatile markets. If you look at point to point, of course, the seeds made money for the firm over the last 2 years. The intention is not to either make all those money. The intention is to create that track record and position ourselves to be able to offer the product to the marketplace.

And that will continue as…

As and when needed, yes.

Good morning, everyone. As always, thank you for your time and your efforts this year. My question goes to Andrew. You talked about investment performance over the investment cycle. So just a bit of context. The world is getting more short term in terms of thinking. I mean, yesterday's news is last week. Last minute's news is yesterday. Can you give some context about the time horizon of your -- of the investments that we should be thinking about? And is it the same time horizon for the different funds? Or is it different depending on which fund we're talking about?

Yes. So it's a good observation about the way the world is and markets are these days. And the problem is trying to sit and predict interest rate moves and market responses to that or the latest statement out of the leadership in China. You're not going to predict that. So you have to really take a view about where businesses are going to be in 3 or 5 years' time. And when the markets are -- in our view, aren't necessarily negative about a particular business, because of some of those sort of shorter-term things, that's our opportunity. So like at a high level, let me give you a simple example. So everyone is endlessly talking about the COVID lockdowns in China and when they're going to end. To answer the question, and you might have different answers to this, but do you think they're still going to be having COVID lockdowns in 3 years' and 5 years' time? I don't. Now there might be some people here who disagree, but I don't. So to the extent that we're worried about the next 6 months, I mean we buy companies for an accumulation of the next 10 and 20 years of earnings. So I mean, you've got to look through that noise. And I think, ultimately, stock prices will follow earnings still because ultimately, they end up as dividends or share buybacks. So I think that's sort of central to our approach, and we still need to do it. Sorry, was there a second part of the question?

[indiscernible]

I think it is. I mean I think on some parts of what we do on the short side, where we're shorting stocks, we cannot be quite so long term because I mean we've now -- we want to base on a long-term view that you do have to take a bit more of a short-term focus around what the market is doing at the moment. Otherwise, you can -- I mean a lot of the stocks that went up as part of that bull market, even now, after 50%, 70% falls, I would argue, are still very expensive, but you would have been hurt very badly if you stayed in the way of that. So in that sense, you have to be a little bit more short term. And while we might have a 3- or 5-year view, sometimes, we might only be there for 6 months if the reaction -- if there's a turnaround and the view of the prospects rather than the actual prospects but broadly the same.

I had 2 questions. Maybe they're for Andrew, but I appreciate the input of anyone else on the Board, perhaps Kerr as well. What you do, I believe, is one of the hardest jobs in the world. Anybody who's had a go at managing money knows how incredibly difficult it is. And that leads me to the question of saying would it be better if you had a separate CEO and you just completely focused on investing? Because I think managing businesses perhaps is a bit of a diversion, I'm speaking from my own experience here, when you're trying to manage money. And the other question is how do you actually get agreement amongst an investment team? I know at Baupost, for example, one guy makes the decisions and pulls the trigger and takes the blame. Is that what you're doing in the funds? Or do you get all the different voices together, and when they're all talking, get some sort of group agreement? Because as I say, at the end of the day, making investment decisions, I think, is about the hardest job in the world.

So on the question of my role of CEO, I mean, like it's very hard to argue with your observation. I would just say this, that I have got extraordinary support around me. So in terms of running the business, Liz and Andrew Stannard, do a vast amount of that work that is delegated to them that you might normally see the CEO handling. Within the investment team, I've brought in Clay Smolinski as a co-CIO, and Clay is a very experienced investor, great track record. He's one of the co-PMs on the International Fund with me. So we have very much a sort of dual responsibility there. And then just recently, we created a new role to really help -- because I mean I -- my real response to the question is the CIO role is to be a role in itself. Forget the CEO part of it. And because -- it's just not the investing, but you also have to manage the investment team and the investment process. So we've created a new role, title Head of Investment. And Doug Isles, who was once an analyst with us and then he came -- had left and came back to establish an investment specialist team. So he's very familiar with investing and the team and the way it works, and he's taken on that role and is providing a huge benefit to both Clay and I in terms of many of the responsibilities he's taken over. So I think you're right, we're attacking it in a different way. But there is always never quite enough hours in the day for any of these jobs, even just being a portfolio manager. The -- sorry, what was the second part of the question? I don't remember.

[indiscernible]

So I mean, our -- what we want to do is have a really rigorous debate about IDs, but the last thing you ever want to work towards is a consensus. I mean if 7 of us in a room all walk out agreeing, then it's probably a -- I've often said that that'll be a terrible investment. So the whole point of -- or one of the things that I sort of said about the co-portfolio manager structure when I was talking is that if we've had to debate about an idea, I don't know, name a stock, BMW, and I'm buying it and Clay is not or Nik Dvornak's not or Adrian Cotiga who runs Europe is not, and I am, then there's clearly a very significant difference of opinion there, right? And so -- but what I like about that is that, that gives us something further to explore, like why are we coming to it. We're investing in the same style. We've had the same argument, same information, why are we coming to different decisions? And indeed, I think that's a strength of what we do, but it's also very much a focus of Doug Isles in his new role, to really bring people together not to agree but to just be explicit about why they don't agree. And then ultimately, it's each -- it is up to 1 person to make that decision. It's just in the case of each fund, that might be 3 people making their own independent decision.

[indiscernible]

Yes.

[indiscernible]

It will be. And there are -- most stocks we all own, but we might own them to a -- like there'll be some -- there's an 80-20 rule here about this. So -- but we measure the performance of each portfolio manager and the differences between them and what they're achieving. And there are differences that's interesting in itself, too.

I tried to join recently your earnings call. But apparently, only analysts are allowed. Is there a reason why shareholders are not allowed to at least listen to your earnings calls?

Andrew?

It's actually a really interesting question because philosophically, from my perspective, I actually can't see a reason why. But I do know it's not general practice. And I think it's driven more from the analysts themselves as opposed to sort of at the broader logistics of organizing sort of broader webcast arrangements.

Well, I do have more than a dozen of stocks here in the U.S. and you're the only ones I cannot join or listen.

Yes. It's somewhat unusual in Australia. I used to work at a U.S. firm as well. And you're correct, in the U.S., it's -- the practice is somewhat different.

But even in Australia, you guys, sorry Andy.

Look, it's a good observation. I'll definitely take that on board.

Yes. And it also probably similar to your points. I were also invested to one of your funds, and we haven't been invited to any of those presentations other than YouTube videos every here and again. So I don't know whether there's an opportunity there to have some sort of like sort of discussion with…

Yes. Look, certainly, we -- our investor roadshow, as Andrew said, we've been doing since 1999. But where…

They're general.

Yeah, but where that…

I've attended one of them.

Where that is, is we do -- it is invited clients without an adviser so that whether or not I'm not sure where -- if you've got an adviser or not today.

No. I'm not -- I invest my own. I don't have an adviser.

Yes. So you should be -- if you're an investor, you should be getting that invitation usually. We hold the roadshow each March.

I feel that it's not as frequent as the other guys, so if we are trying to compete with other guys.

So we do the once-a-year annual investor roadshow, just the once a year, but then what we do is we frequently do webinars, videos and articles which are all uploaded on the website. And then we also make sure that they're known through the quarterly report and on the monthly report or if people sign up to The Journal, which is where all this is housed.

Yes. Thanks for that. But it's not as interactive as the other guys. That's just some feedback.

Okay. I'll take that on board.

More from the room. Thank you for those questions. We'll move to online questions.

Chair, we've received a question from shareholder, Mr. Stephen Mayne. Platinum was one of the first fund managers to list on the ASX and is today capitalized at $1.1 billion. Rival fund manager, GQG, has a market capitalization of $4.4 billion. Pinnacle and Magellan are both capitalized at $1.9 billion and Pendal is worth $1.6 billion. Why have we underperformed? And why aren't we participating in any of this takeover activity involving Regal, Perpetual and Pendal?

Thanks, Stephen. The market cap itself is not going to be an indicator of the stock price performance or the returns to shareholder. There's a starting point inference in the question, I think, that says each of those firms were market capped at the same level when they IPO-ed or whatever and are now -- one's done really well in the case of GQG because the company is worth $4 billion, we haven't done well because we're worth $1 billion. And that's going to be dependent on the size of the business and the assets under management and the valuation that shareholders put on the company at the time they launch the business. If you look at, though, the peer group of competitors in the Australian marketplace, the share price returns have been sort of ballpark similar. I know we have performed a little worse. Perpetual and Pendal, difficult comparators. Perpetual's not really a pure asset management play. And of course, there's takeover activity across those 2 firms, which can adjust the share price. And I think GQG had probably performed reasonably well in that group. But it's -- the 1-year performance is a function of investment performance and the flows, et cetera. But one comment is that the Australian asset management industry has been somewhat derated over the last year or so. And so all of those firms that were named in the question have experienced a downdraft in terms of their share price.

Chair, we've received a question from shareholder, [ Lewis Joseph ] of Algona Proprietary Limited. The question is hello, I'm concerned that despite huge time and effort being devoted to justifying high staff salaries, seemingly never contemplated is the concept of providing good value for clients such as moderating fees. Could you please help explain how Platinum remains resolute in charging some of the highest fees in the industry, which are clearly contributing to continued client withdrawals?

Well, I'll take the second point of the question. That is the first part -- point was just a statement. We frequently look at our fee structures to ensure their relevance. As Andrew indicated, the way in which Platinum manage money is somewhat different to the peers in that -- and you referred to the short positions that we take, for example. So when it's all said and done, we don't actually look at indices as the driver of how we position our portfolios. We look at that bottom line in terms of generating an absolute return for clients. And although 0 in the year to yesterday is not a wonderful number, it's a lot better than a negative 10%. And I know a lot of our peers who are probably charging some lower fees are down at least 10% this year. But our differentiated approach, in our view, justifies the fees that we charge. But as I say, we -- fees are a big topic in the industry, and we continuously look at them for relevance. Yes, please?

One of the issues about fees is that when we go offshore and the markets we're looking at offshore, which are typically large endowments, family offices type of clients, our fees are seen as low. So there's incredible diversity of fees that are charged in this industry. The question for us is what -- you can make some very clear-cut decisions on fees. So our fee levels will keep us out of certain markets or severely restrict us. So really easy example would be the very large super funds. Now we do have clients in this area, but we don't have a lot of clients in this area. But typically, I think you could expect to earn 30 basis points with those types of clients. So would we rather have $1 from a retail client or need to manage the equivalent of 4 plus from an industry fund that then inhibits our ability to do a good job? And that's one of the conflicts I talk about. You can go after all the funds you like. But in doing so, will you be able to do a good job? So it is a topic that we discuss frequently. We did make a small change back in 2017 to our fees. But there are -- there is a downside to following your suggestion.

Chair, we've received a question from shareholder, Mr. Stephen Mayne. Given the low barriers to entry, rise of ETFs and ongoing rise of industry funds, it sounds like our sector in the market is structurally challenged. After floating at $5 and now with the stock now at $1.86, the long-term performance has been poor for shareholders. But those who sold into the float did very well. Could the CEO please expand on what he meant by other fund managers causing severe damage to client portfolios? Is that a reference to Magellan? And how does he retain his interest in the business when he doesn't need to work and it seems to be a case of managed decline?

Let me get all the bits of that question. No, I'm not referring to Magellan at all. They've done very little damage compared to some of the high-growth managers, where lots of the funds flow into. So there are plenty around globally that have taken out 40% to 60% of their clients' money to draw down this year. So I'm more referring to some of those very high-growth managers that you would read about both probably more offshore but some also locally. I don't need to work. I like work. I don't know. So actually, I would note that I'm pretty all-in on Platinum. My family still own all the shares that we had at the time of the IPO. I work a reasonable week. I've got most of my -- our family's wealth that is in the markets is tied up with Platinum funds. So I'm here. My goal is to absolutely turn our investment returns around and I hope, with that, the performance of the business. But yes, the industry is structurally challenged. It is more competitive. So that is what we are fighting against. But I'm not sure rolling over and dying is a great strategy either.

Chair, we've received a question from shareholder, [ Lewis Joseph ]. The question is why does the company not contemplate sensible and prudent capital allocation, such as undertaking a buyback at currently depressed prices?

Okay. Thank you for that. And we've spoken to the buyback question on a number of occasions. I won't do a deep dive on the capital component at this point. I'll just reel off times on a P/E multiple. But I think to really make sure we contextualize this appropriately, I'm going to quote our Chief Executive here, and this is his -- from the ASX announcement back in September. "Platinum is a somewhat -- we've touched on some of this in today's discussions. Platinum is a somewhat unusual entity as it is both a listed company and operates a business whose revenues are largely dependent on the level of global stock markets. This creates additional leverage on both the upside and downside to the share market. Implementing a buyback is a complex decision. Global stock markets are currently facing great uncertainty given the backdrop of inflation, interest rates and geopolitical risks. This volatility creates the potential for many different scenarios for our business. To assess whether the current share price represents fair value, one needs to give consideration to a wide range of potential outcomes. It's not necessarily the case that a lower share price always represents better value. In addition, our current dividend policy calls for the distribution of almost all of our profits each year by way of fully franked dividends. As any future buyback is ultimately limited by our balance sheet capacity, any decision to implement the buyback will only be taken where we consider that this is the best way to maximize value for shareholders." And when we look at the balance sheet from a capital management point of view, were we to undertake any form of meaningful buyback, it would mean that we would eat into dividends. And I think that most of our domestic shareholders certainly enjoy fully franked dividends rather than the consequences of a buyback.

Chair, we have received a question from shareholder, [ Michael Byrne ] of Camden Equity Proprietary Limited. So net profit in FY 2022 was down 38%. By contrast, employee expenses increased by 4%. It is hard to find a more stark indication of misalignment of the interests of business owners and employees than that. Viewed another way, if PTM's fund managers observe those dichotomous metrics in a business they were researching with a view to owning the shares, why would they not also, like me, feel that it is far better to be an employee in such a business instead of being a shareholder?

Yes. Well, it's a correct observation and to the extent that we have a fixed cost base. And I think that shareholders would be disappointed if we had sacked 38% of our staff to marry the staff expenses with the net profit decline, particularly given that, that net profit decline, as we highlighted earlier, was largely an effect of the seed capital from being so strong the previous year for falling in the 2022 financial year. We need to retain our talented people. It's as simple as that. We've got to be competitive with the market. So we have to pay our people appropriately. And we undertook some work in the course of the financial year to ensure, from an independent consultant, that we were doing just that. And so we use market data and reference to that to ensure that we are paying competitively.

Chair, we've received a question from shareholder, Mr. Stephen Mayne. Thank you for disclosing the proxy position to the ASX early, along with the formal addresses. When disclosing the outcome of all resolutions today, will you adopt an additional voluntary transparency measure and publicly disclose how many shareholders voted for and against each item similar to what happens with the scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative recently adopted by the likes of Tabcorp, Webjet, Dexus, Metcash and Southern Cross Media after their AGMs.

Okay. No, we provide a number of votes and percentage, not a count on each shareholder vote, but something we can take onboard and consider for the future.

Chair, no further questions have been received through the online platform for this item.

Okay. So I think I've got my order correct now, and I ask for any audio questions.

[indiscernible]

Yes. So Platinum International Fund is certainly widely held among the adviser group, and I'd also say the Asia Fund, with both those products. So the 3 major ratings houses that -- research houses, sorry, that provides ratings at Morningstar, Zenith and Lonsec. We are recommended for the international major funds with Zenith. We're recommended an investment grade for Lonsec, but we're just undergoing with this now, and we've got a bronze medallion for Morningstar for both those products. So yes.

[indiscernible]

So those -- so we actually underwent ratings. Normally, it's a yearly cycle, but when there's a change in fund manager, the research houses will automatically put the fund on hold and come in and review you to ensure that they meet with a new fund manager. So obviously, with the Asia Fund, that's coming up 2 years ago now, we did have a change in fund manager within that, even though Andrew remained, is one of the fund managers still there. So at that time, one of the research houses, we retained our rating there. And then with the International Fund, that's just part of that yearly cycle. So no, they've both been -- there hasn't been a downgrade recently.

[indiscernible] Asia Fund.

Yes, we are. Yes. Yes. So even though, as Andrew alluded to, like the performance has picked up, but you need to from a retail perspective, which our business is weighted more on that side, it does need to be -- we've done the numbers. Normally, you need 6 months of consistent performance and over varying time periods to kind of see a change in flows either way. And so even though performance at the moment, say, to the International Fund relative is ahead of the index, you would need to see that continue for a while to see a change in those flows come through.

[indiscernible]

It's 6 -- yes, 65% the reinvestment. There's 35% cash in the number. And that's just mainly on the PT funds here I'm talking about, which is a total of about $9 billion -- roughly of our $17 billion that would be about $9 billion, $9 billion to $10 million.

Chair, we've received an additional question from the shareholder, Stephen Mayne. Sorry, we've received 1 additional question from shareholder, Stephen Mayne. Mr. Mayne says, this is our last opportunity to hear from Founder Kerr Nielsen at a Platinum AGM. Could he please make some comments reflecting on his journey and also deal with the elephant in the room, namely takeover activity and founder sell-downs. Hamish Douglass, Founder of Magellan, quit the Board and recently sold down. Could Kerr please address the questions of whether he is a long-term holder of Platinum and whether he is open to any controlled transactions given the structural challenges of the industry and the push for scale as part of the solution?

Good morning, Steve good to hear from you. You attended our second meeting; I remember and were very active with your questioning. Just to bring some more perspective to this discussion. For the last -- right up to the beginning of last year, we had a monetary experiment that has never been tried before, where the pricing of assets became chaotic. We've never seen that. I think we've now realized how ludicrous that concept is where you pay people to take out mortgages and so on. So I don't think that's going to repeat. I do think we will have continuous intervention, monthly and fiscal, but of a slightly different nature in the years ahead. Now what that means for Platinum is reorientation and an ability to use stock picking to the best effect. If I were to make a criticism to be open, I would say we were 2 strident in defending certain aspects of what we do. But in fact, it's inevitable because being contrary requires independence of thought and behavior. So all this discussion we're seeing now is about the last 10 years, which have been aberrant, abnormal, describe it as you like. We can see from the first -- or so far this year, how our performance has improved significantly. There is work to be done in terms of this head of investments. That's a big role because you've got strong personalities and you've got the problem of coordination. That's the big issue that needs to be addressed and is being addressed. In terms of activities in the stock market around takeovers, you can make your own decisions regarding what Regal has and how it's funding and how it's pursuing its objectives. Will consolidation continue in this industry? Yes. What we've suggested though, the size doesn't necessarily give the outcomes that are most attractive to investors. And in the context of what I said beforehand, I think it doesn't necessarily help you unitholders. And lastly, I'll just raise the question which is often put to us about ETFs. They are indeed a great innovation in financial markets. And what I keep saying, and it's correct, I believe, someone has to pull the trigger to decide when they want to go out of their biotech ETF, when they want to enter a chip-making ETF, when they want to change an energy ETF. So there is a market timing element there that the individual investor, who often is not particularly well positioned to make, has to make. So in principle, they're a fantastic investment medium, but the realities of execution are more complex than some will acknowledge. And of course, those who've been playing that very narrow angle in the tech boom would have felt they had control, and were masters of the universe, and then it reversed on them. So I just say that as a passing -- not to defend what we do, but simply to make a very strong observation that you still cannot avoid the fund management aspect, which you are -- by using a sensible fund manager, you're subcontracting to their good judgment. So, so long as that fund manager has the skills to conduct successful investing, and I believe Platinum has an unusual -- and I'm not saying this to simply defend anything because I don't need to. The fact is that there are several fund managers within the -- and quite a few, in fact, not a couple who are extremely good investors. I think by improving our coordination and reducing stridency, I think you'll see a remarkable change in our returns. I don't think I can say anything more about what I plan to do because I'm active in the markets. I'm having a good time. Thank you. And in terms of my shareholding, I have no particular interest in changing in my position. It's not central to my thinking. Thank you, Stephen.

Thank you, Kerr.

Any more questions at all?

No.

Okay. Thank you all for your questions and comments in relation to the financial statements and reports as well as our business in general.

The next item of business is the reelection of directors, including Anne Loveridge, Elizabeth Norman and Philip Moffitt. Separate resolutions will be put for each director standing for reelection or election. In accordance with the company's constitution, Anne and Liz are retiring at this meeting by rotation and offer themselves for reelection. Philip, who was appointed to the Board after the last AGM, is offering himself for election for the first time. The Board is confident that each director has the capacity and requisite skills and experience to discharge their obligations to Platinum. Now to each of the resolutions. Resolution 1 is in respect of the reelection of Anne Loveridge. Anne is retiring from the Board under the company's constitution and being eligible, offers herself for reelection. The Board, other than Anne, who has abstained, recommends shareholders vote for and reelection to the Board. Before turning to questions, I will invite Anne to say a few words in relation to her reelection. Anne?

Thank you, Chairman, and thank you, ladies and gentlemen, for the opportunity to present my credentials. As you will have seen in the financial report or the Notice of Meeting, I had a 30-year career in professional services, and I'm a chartered accountant by training. I have been on the Platinum Board for 6 years and have chaired the Audit and Risk and Compliance Committee during that time. The skills I gained through my 30-year career in professional services equipped me well for that. As noted earlier in the meeting, this is a highly regulated industry, increasing amount of regulation and compliance obligations upon us that if we don't manage appropriately could cost the business. I have been a Non-Executive Director for the last 7 years, including on 2 other ASX-listed companies, National Australia Bank and NIB Health Funds. The experience I gain through working on other companies, whilst, of course, always maintaining confidentiality, you gather insights and perspectives of how others are managing some of the challenges in front of us in the environment today, including, as we were discussing earlier, the challenges of data privacy and cyberattacks. And so the knowledge that you gain from working on other companies is highly valuable in providing an opportunity to challenge and ask questions at Platinum. I do have the capacity to serve. I understand what is involved, and I would be honored to receive your support. Thank you.

Thank you, Anne. I'll now invite questions on Resolution 1, starting with questions in the room, if there are any. If not, we'll take online questions.

Chair, we've received a question from shareholder, Stephen Mayne. Kerr Neilson will be a big loss, but could Anne please comment on how she thinks the Founder's departure will change the dynamics inside the boardroom. Also, Kerr and the CEO have worked together for many years. As the largest shareholder, what does Anne and the independent chair, and we're implying that we -- the question relates to the Chair of the Audit and Risk Committee -- think about the future contact and information flows between the CEO and Founder once the Founder is off the Board?

Gosh, that was a long question. Kerr has always conducted himself with utmost integrity throughout the time on the Board and respected -- since he stepped away from executive roles, respected the line between the executive management team and the role of the nonexecutive directors. He, as anyone who would know Kerr, is thoughtful, not dominating in conversation, provocative and challenging at times, but always with good intent. And so in terms of him stepping away, as we noted in our last Board meeting last -- yesterday with Kerr, we will obviously miss his long heritage and wisdom and insight into the business. But that's not to say that we don't believe we're well equipped, and some of my fellow directors bring appropriate investment management skills to continue that challenge and questioning of the management team. In terms of the level of contact between the CEO and the -- and Kerr, I'm confident that Andrew fully understands what is and isn't appropriate to share with Kerr. I suspect they will have many, from time to time, challenging conversations about views on the market and outlook for the market, but that would not be going to the confidential information of Platinum and Platinum's positioning in any of its funds.

Chair, no further questions have been received through the online platform for this item.

Okay. Do we have any audio questions?

Chair, no questions have been received over the phone for this item.

Thank you.

The direct votes and proxies received for this resolution are shown on the screen. In regards to open proxies given to me, I will be voting for this resolution. The next resolution is in respect of the reelection of Elizabeth Norman. Liz is retiring from the Board under the company's constitution, and being eligible, offers herself for reelection. The Board, other than Liz who has abstained, recommends shareholders vote for Liz's reelection to the Board. Before turning to questions, I'll invite Liz to say a few words in relation to her reelection.

Thank you, and good morning. I've been a member of Platinum's Board as an Executive Director since May 2013 and have worked at Platinum since its founding in February 1994, always in a client-facing role. My role has encompassed building and maintaining relationships with our clients, so that's investors and advisers, through all aspects, that's covering investor services, client communication, both content and distribution, marketing, product management and product distribution. As such, I believe I contribute to the skill set of the directors of the Platinum Board. Thank you for your consideration.

Thanks, Liz. I'll now invite questions on Resolution 2 from the room. There are none. Any questions online?

Chair, we've received a question from shareholder, Mr. Stephen Mayne. Kerr Neilson will remain the largest shareholder on departing from the Board. Who will be the voice of our biggest shareholder in the boardroom? And could Elizabeth Norman comment on whether the independent directors sought to persuade Kerr to stay or to negotiate an agreement where he was publicly committed to not selling down his stake, particularly given the recent history at Magellan?

Yes. Kerr was my immediate boss for 25 years. And so Kerr was, yes, capable of making his decision to decide when was the right time to step away from the Board, and that is exactly where -- what he did. And also, I mean, again, it's his decision what he chooses to do with his remaining shareholding with Platinum.

Thanks, Liz. Any other questions? Online?

One moment, Chair. Chair, no further questions have been received through the online platform for this item.

And any audio questions?

Chair, no questions have been received over the phone for this item.

The direct votes and proxies received for this resolution are shown on the screen. In regards to the open proxies given to me, I will be voting for this resolution. Our next item of business that will require a shareholder vote is the election of Philip Moffitt. Philip was appointed to the Board on 17th December 2021 and offers himself for election. Philip has over 35 years' experience in investment management. He was previously a partner at Goldman Sachs in both Sydney and London and also Chair of the Goldman Sachs Asset Managed Fund Board. The Board, other than Philip who's abstained, recommend shareholders vote for Philip's election to the Board. Before turning to questions, I'll invite Philip to say a few words in relation to his election.

Thank you, Chair, and good morning, everybody. Forgive me from referring to notes, but as this is my first exposure to you as shareholders, I want to be thorough. I was invited to join the Board last December, and I know this is the first opportunity you've had to meet me and to vote on my ongoing membership. Your Chair's pointed out the annual report details my experience, my CV basically. And the Chair has referred to the fact that I'm a lifelong fund manager. I think of that as being a risk taker and risk manager. I began my career in Sydney and have worked and managed money in London and Asia across asset classes, fixed income, credit and currency, but I've also been responsible for all the public market asset-based investment strategies that Goldman Sachs Asset Management undertook in Asia Pac. Like Andrew, I also have been CEO and CIO of an investment management business and understand the complexity and difficulty those dual roles present. Since retiring from Goldman, I've completed an honors degree in psychology, focusing on behavioral biases in investment decision-making, so trying to study what's been put in practice for a very long time. I also -- last 2 years ago, I was appointed to the Board of Aware Super, which is Australia's third biggest superfund. And I am the Chair of the Investment Committee of that organization. That role provides me with insight across asset markets and also best practice investment governance. I believe that my career's given me insights into taking and managing investment risk, developing investment teams and leaders, developing effective decision-making frameworks and investment governance. And I would be honored if you were to support my candidature for the Board.

Thank you, Philip. I'll now invite questions on Resolution 3, starting with questions in the room.

Shareholder joy. I just can't resist asking you if you've got any like old moments, this study into the psychology of investing. Thank you.

Do I what? Are you staying for coffee? Look, I -- genuinely, I don't want to bore anyone. I know this is a formal meeting, but the persistent biases that we all have in the way we make decisions I find fascinating. And if I could have found the formula for a perfect risk taker and risk manager and hire them, it would have been nirvana. And I think through a career of managing money and people who make investment decisions, I'd learnt to recognize certain personal characteristics that seem to be present in those who were good decision makers in terms of entering into risk, but also good decision makers who were good at deciding when to exit risk. And to my mind, the very best investors are actually the ones who know when to exit rather than enter. And studying that through psychology gave me a chance to look at those characteristics from a personal characteristic trade framework. And so I have actually some very strong views about what sort of personalities work. If Kerr had been open, I might have used him as a case study in field work. They're not necessarily the highest educated people, but I do think that there are some insights into particularly the way organizations make persistent areas of judgment that I hope to be able to bring to the team. Please do, yes. If you've got time for lunch, I can go with that.

Thanks, Philip. Any other questions from the room? If not, we'll move to online questions.

Chair, we've received a question from shareholder, Mr. Stephen Mayne. Could Philip Moffitt and the Chair comment on the recruitment process that saw Philip offered a position on the Board. Was a headhunter involved? Did the full Board interview Philip? And did they interview any other candidates? Did Philip know any of our directors before engaging with the recruitment process?

So firstly, I'd like to thank Mr. Mayne -- I've not met Mr. Mayne -- Mr. Mayne for his question because I would have been the only one who hadn't received one. I would have felt left out. I was lucky enough to start my career -- well, I worked for you at the Reserve Bank, but my first kind of commercial job was at Bankers Trust. Andrew, I think, joined the year after I joined. Unluckily for me, I didn't work for Kerr. I worked in an associated part of the asset management business, but Kerr actually was a very generous coach and mentor across a broad range of the young people who entered into that business, and I've benefited from that. So Andrew and I are contemporaries, and we've known each other for -- and Kerr since the '80s. But obviously, I went off and did other things and stayed in touch. In terms of the recruitment process, I was approached by a headhunter looking for somebody with direct hands-on asset management experience is the way the role was described to me, was that a Board of an investment management business was actually looking for somebody who had taken and held risk and knew what it was like to wake up in the morning and look at the P&L and have to face off customers and clients. And I know that feeling. And it wasn't until the second round of that process that I learnt that the gig was -- the gig -- the job was with Platinum.

Yes. Give Brigitte the mic. You might -- Brigitte chairs our Nomination Rem Committee. So...

And was also involved in the recruitment process. So then Philip ensued with everybody on the Board. I think that was -- was there any -- is there anything else that we missed? And there were a number of other candidates, both at the first round introduced to us by the headhunter and at the second round that we thought that Philip was the best candidate to meet the needs of the Board and the organization going forward.

Thank you.

Thank you. Chair, we've received a question from shareholder, Mr. Stephen Mayne. If an Aware member asks Philip whether he should take their money out of Aware and instead go with Platinum, what would he say? Is it possible to sit on Boards and both sides of the industry, fund in commercial, fund manager divide? That said, Philip has a great and relevant CV for Platinum.

After that, maybe I'll go to Stephen. Thank you. Look, there are conflicts in all areas of life. The way -- and obviously, the potential for conflict was discussed both with Aware and Platinum before I took on the role. Aware doesn't invest in any Platinum product, and as Andrew pointed out, is very unlikely to at the price point that Platinum exists at in the marketplace. I can promise you that the big superfunds are not going to be paying almost anything if they can manage it. In terms of asking for personal investment advice, the answer to that would be very simple, is that you do your own research and find your own adviser. If somebody asks me directly and when I invest in any fund, I will tell them honestly, yes or no, I think that's just a decent thing to do. In terms of security selection and security strategy, the way the larger superannuation funds are set up now is that all the decisions are actually delegated to the executive. So the only areas that the Board are involved in are of the nonpublic asset market transactions, for instance, a toll road or a building project or something, generally over $1 billion actually is the size. And so it's impossible that there will be any direct conflict in the decisions that Aware is making compared to Platinum. And I hope that I can satisfy you, Mr. Mayne, that I can maintain those conflicts, policies promptly and professionally.

Chair, no further questions have been received through the online platform for this item.

And audio?

Chair, no questions have been received over the phone for this item.

Thank you.

The direct votes and proxies received for this resolution are shown on the screen. In regards to open proxies given to me, I will be voting for this resolution. Brings us to Resolution 4. The next resolution is the adoption of the remuneration report for the year ended 30 June 2022. 2022 remuneration report forms part of the company's 2022 annual report and provides disclosures relating to executive and nonexecutive director remuneration. The vote on Resolution 4 is advisory only. At last year's AGM, the 2021 remuneration report received what is called first strike with more than 25% of the votes cast against the adoption of that report. In my Chairman's report earlier, I spoke in detail about how seriously the Board took this first strike and what we have done to address the concerns of our shareholders. Accordingly, the Board recommends shareholders vote for the adoption of the remuneration report. I also note that the institutional proxy advisers, AXIs, CGI Glass Lewis, ISS and Ownership Matters, have all recommended to vote for the adoption of the remuneration report. I'll now invite questions on Resolution 4, starting with questions in the room.

I do have a question, which is related -- sorry. It's related to the fact that Platinum is both an investment manager and a business. So therefore, the remuneration should therefore focus, I guess, on both those things. So my question is really, the directors who are not involved with the investment management of the business, how are they justifying their remuneration in terms of trying to rebuild the business from what is a catastrophic loss of shareholder wealth?

Brigitte, do you want to...

So we have 3 key management personnel. Andrew Clifford is both the Chief Investment Officer and the CEO, as we've previously mentioned. So he has to focus in his CIO role on investment performance. The other 2 key management personnel, Liz, who is responsible for relationships with clients and the -- I guess, the marketing and distribution side of the business, which is -- so she's got to work with the investment returns that she gets that the organization creates but still has an important role to play in what happens as a result of our investment returns. And so that relates not to the investment returns, but to the performance and the P&L of the business. And Andrew Stannard is responsible for the operations side of the business. And so again, for a given investment return, has to make sure that we operate within the many regulatory environments, regulatory regimes that we operate under, that we are safe, that we -- the transactions occur as they're supposed to occur. And so he has to operate independent. So I guess we've got a remuneration that's got to cover operating the business as well as the investment returns. I'm not sure if that's entirely -- so that's what we assess remuneration based on what the people have to do.

The point I'm making really is the fact that I think for too long, Platinum have relied on just investment performance and that aspect of the business rather than realizing they're actually in a business, which has competitors and how to outmaneuver competitors from a business perspective, not just an investment management perspective. Because we have a choice of either in Platinum funds or investing in Platinum, the company. So Platinum funds, yes, you can look at it and say, well, okay, they're getting better, their performance is improving. But Platinum as a business is not. So therefore, you can make the argument that the people that are getting remunerated from the investment management side -- and I appreciate some people sit in both camps -- are encouraged -- the effect is encouraging, but it's not encouraging from a business perspective where, clearly, the share price is awful. And strategies that actually improve the share price that don't rely on investment management don't seem to be entertained by the directors.

Okay. So I think that they are entertained by the directors, and we talk about investment performance because we think that every -- it's sort of necessary but not sufficient. If you don't have some investment performance, it's pretty hard to grow the business. So we have to perform well. But as regards remuneration, we've just introduced a long-term incentive program, which puts shares, or the upside in the share price, in the hands of all of the key management personnel and all of the investment team and all of the management team, specifically with a view to aligning the interests of shareholders with the interests of everybody who operates the business. So in terms of designing remuneration, I think that that's the strongest signal that we can give, and that's the strong -- that we can give to everybody who is making decisions that the share price is important. And if -- and that material and large part of their remuneration has no value unless the share price goes up, which is in the interests of shareholders. So that's what we're doing from a remuneration point of view to create the alignment that you're requesting or hoping for.

I just want to say that I agree with what the previous gentleman said about the way the business is probably managed. I mean forget about the investing side. I think they're doing a good job in terms of investing. But in terms of the business side, how we entice clients, how we talk to them, how we deal with them interactively and in frequency that the clients want, I think we're a bit behind the others.

So thank you for the specific feedback that you gave us on that and I know that Liz will be taking that on board. The KPIs that all of the -- everybody in the organization work to are, again, directed at growing the business, not just directed at investment performance. So we're aware of the distinction. We see the interests of shareholders as paramount. We all put a substantial part, the independent directors, of our remuneration into shares, which we buy. We -- so that's a policy that we have that creates alignment that we have to put our directors' fees into buying Platinum shares. The management team, the investment team, everybody is materially motivated in terms of their shareholding, and their shareholding increasing in value, driving their personal outcomes.

[indiscernible]

Sales and marketing. I think Liz is the person who has the strongest -- Liz's sales and marketing background, and it's specifically in the Platinum business.

My point is that the Board seems to be skewed to people with accounting and investment management skills, not sales and marketing skills to enable the business to increase their market share.

I think that's a fair criticism or observation that we'll take on board.

Yes. May I add something -- just something? The business side of what we do today is unrecognizable from a decade ago. That was what most of my presentation was about. It has not produced the results that we would like because it's limited by the investment performance. So in many respects, we won't know whether we've done a good job in terms of building a platform to expand the business until we have all conditions present. But there's been huge efforts offshore and locally to build relationships. And indeed, it's fairly clear to me if you looked at the counterfactual that we haven't made that effort, our business would be remarkably smaller than it is today. So I believe we've actually done a great job holding things together to the extent that we have. But I also go back to what I said about our strategy and our business model, and that is to produce outstanding returns, there is no plan B. The alternative, which is followed by everyone else, is to then throw enormous resources at the problem. And you end up basically holding onto the money, maybe expanding it, but your profits shrink just as much, if not faster. So it is painful to everyone in the room, I appreciate, but that is actually part of the actual approach here by putting clients' interests up front that we maintain the trust that they have in us. And we -- you might say we live to fight another day. But I can assure you that other businesses that do not do that, and it's very plain who they are in the local market, who go down the most convenient path, they have no way back. They've destroyed their profitability, and it's very apparent that as an organization, we are highly profitable even in terms of the -- relative to the amount of money we manage. So anyway, that's the case that I would make on our behalf.

These questions are very relevant. It's not easy. And I've been in the business for a while in various roles. But I mean if you contrast yourselves with Magellan, it's a fascinating case study of how shareholder disruption on both fronts. Magellan were very innovative, came out with a raft of different products, listed, unlisted, some things that you might think were far too fancy. And then they fill in a hole because of, well, Hamish Douglass, I guess. And then they lost a whole lot of institutional money. Platinum, on the other hand, has really not been focused on institutional money as greatly as they have. It's been mostly retail. But you suffered from loss of performance due to your focus on Asia. Nothing wrong with that, and I absolutely had investments in both for different reasons. The overwhelming feeling, though, is the fact that if you're going to make on fund managers, you need to make it right upfront when they're growing, and they're attracting funds under management, and the prospects of P/E ratios are much more attractive. For a mature funds management group like yourselves, and this is about remuneration, you really need somebody or a group of people, which are going to say, well, okay, where are we? How are we going to add shareholder value for a mature investment manager like ourselves in an outflow situation? And you admitted you don't have the people on the Board that could possibly take you in that general direction because they're all focused on investment management.

Well, that's not quite true because I would say that everyone here who's been in investment management has certainly been exposed to the side business of building it. So we have -- Guy was a CEO of a rather large asset manager. Philip was and Brigitte as well. So they've all had the responsibility of driving growth in asset management businesses as well as the investment side.

I'm sorry, but that's my exact point. You don't have enough blood from outside to bring new, potentially innovative ideas into a business, which is, in my view, too narrowly focused. But that's my view, and I appreciate your answer.

I think it's an industry that is extraordinarily slow to move and has little innovation all round. I mean I think the things you mentioned that Magellan did, most of them we've done, sometimes before, sometimes after. I don't think it had a great deal to do with their success that stuff. But some of it was clever, and we copied it. But this is an industry that is incredibly slow to move because we are regulated. And I can tell you we -- that you are very restricted on what you can do. But anyway, I take your point, and we're not -- I don't want to reject your critique, but it's not always that easy to move.

Any other questions in the room? Thank you. Move to questions online.

Chair, we've received a question from shareholder, Mr. Stephen Mayne. Those comments on the floor were effectively saying that we got outmarketed by Magellan, which heavily digests financial planners and grew like topsy, cutting our lunch in a fund sense. Given the debacle at Magellan, I personally am comfortable with the Platinum approach of pointing to the investment scoreboard rather than paying big commissions for an overpriced funds management business like Magellan did. That said, we clearly could have done distribution better.

Yes. I agree with the comment. I think Andrew referred to that in his Chief Executive comments around the initiatives we've taken in offshore markets through the [ C-CAV ] and through the Cayman funds to attract both European and U.S. money. And our 3-, 5-year, 10-year performance numbers, plus COVID restricted our ability to really penetrate those markets at that time. But on the rebound, with better numbers and ex COVID, I'd say those marketplaces are real opportunities.

Chair, we've received a question from shareholder, Mr. Stephen Mayne. Well done on adjusting the rem structure to avoid a second strike. Fund managers are not deemed to be KMP. And so their pay arrangements are sometimes not disclosed. How many of our fund managers are being paid more than the lowest paid KMP disclosed in the remuneration report?

Okay. Well, fund managers are performing a different role to the KMPs, and they're remunerated around their ability to generate returns, but their individual compensation is confidential. I don't know, Andrew, do you want to comment fund manager compensation?

No. Well, other than to say that it varies very fairly significantly with outcomes. And so given performance, you would expect it to have broadly been down quite a bit last year.

Any more questions?

Chair, no further questions have been received through the online platform for this item.

And our popular audio questions?

Chair, no questions have been received over the phone for this item.

Thank you.

The direct votes and proxies received for this resolution are shown on the screen. In regards to open proxies given to me, I will be voting for this resolution. The next item of business, Resolution 5, 6 and 7 relate to the grant of performance rights under the Platinum Partners long-term incentive plan to each of the Executive Directors: Andrew Clifford; Elizabeth Norman; and Andrew Stannard. Separate resolutions will be put up for each Executive Director's grant. There is a detailed explanation of the performance rights in the explanatory notes within the Notice of Meeting. However, in summary, each grant of the performance rights is divided into 4 equal tranches and tested annually over 4 years. A tranche will only vest if the relevant total shareholder return performance hurdle is achieved. If the performance hurdle for a tranche is not achieved, that tranche will lapse. Exercise of the performance rights is also conditional on continuous service of 8 years, subject to good lever provisions. The performance rights are granted as a long-term incentive to retain key talent and to align our executive directors' remuneration with long-term value creation for shareholders. Again, I note that the key institutional proxy advisers previously referred to have all recommended voting for these resolutions. Now to each of the resolutions. Resolution 5 is in respect for the grant of performance rights to Andrew Clifford, Platinum's Managing Director and Chief Executive Officer. The Board, with the exception of Andrew Clifford who's abstained, recommends shareholders vote for Resolution 5. I'll now invite questions on this resolution starting in the room.

Thank you. Look, hopefully, a simple question. Just in the context of the performance right as a dollar value, which I get, and then it talks about the shares per performance right. How does -- what is the price of the shares that you divide into to get the number of shares for that quantum?

We took the -- it's published. We took the value weighted average price of the stock on the 7 days preceding, I think it was the 30th of September, I'd have to be corrected on that. So it's the average of where the stock price traded over a period of 7 business days prior to the award. I mean I think it was $1.63 -- sorry, $1.69. Sorry.

And does that price apply to the future like in 2025? Is that the same price in the future? Or is it [ predetermined ] at the time?

Yes, that's the price at which it's set. And then the TSR is based on the movement over or under around that share price.

Okay. So that $1.69 or whatever it is, is a constant?

Yes. That's the baseline.

For this year's grant. So sorry, so just to clarify, so last year's grant, which was not for KMP, that was at the price of the strike last year. So we expect each year to make an annual grant, and the share price will be set each year at that price. Is that -- yes.

Any more questions in the room? If not -- yes?

Chair, we've received a question from shareholder, Mr. Stephen Mayne. As a co-founder of the business, Andrew already has a lot of incentive through owning 32 million shares or more than 5% of the company. James and Kerry Packer used to work for free at their public companies, instead just relying on the dividends and rising share price. Given his large equity position, did Andrew consider not including himself in this LTI grant, particularly given the recent poor performance of the share price?

Andrew -- if you look at Andrew's base salary, it is not even in the -- it's below the 25th percentile base salary for everybody else in the industry, which is a practice that's carried forward from when Kerr was the CEO. So I think Andrew takes the hit there. He further says, "I won't take a bonus pretty much every year." So no short-term incentives for Andrew, but he wants to be aligned with shareholders in growing the value of the business and growing the value of the shares. And so we -- he has asked to be part of the long-term incentive plan, and we agree that it's appropriate for him to be part of the long-term incentive plan.

Chair, we've received a question from shareholder, Mr. Stephen Mayne. The turnout in the proxy votes was only around 30% on all resolutions. Could Andrew clarify whether he voted on any or all of the resolutions today? And is it correct that Kerr Neilson hasn't voted any of his 21.48% stake, including on this resolution dealing with Andrew's LTI grant?

Well, I believe…

That was mine.

You do it.

So you'll find the shareholder was [ Jane Clifford ], and I believe she voted on the -- those motions that she's allowed to vote on and note vote on those, which is excluded, which are -- can't remember the names -- the numbers of the resolution, but obviously, the rem report and the resolutions regarding the performance rights for myself, Liz and Andrew.

Chair, no further questions have been received through the online platform for this item.

Thank you. And any audio questions?

Chair, no questions have been received over the phone for this item.

Okay.

The direct votes and proxies received for this resolution are shown on the screen. In regards to the open proxies given to me, I will be voting for this resolution. Resolution 6 is in respect of the grant of performance rights to Elizabeth Norman, Platinum's Director of Investor Services and Communications. The Board, with the exception of Elizabeth Norman who has abstained, recommends shareholders vote for this Resolution 6. I'll now invite questions on this resolution starting in the room.

No questions in the room. I'll move to questions online.

One moment, Chair. Chair, we've received a question from shareholder, Mr. Stephen Mayne. Could the CEO or Elizabeth summarize her past LTI grants as to whether they have vested or lapsed? Also, has Elizabeth ever sold any Platinum ordinary shares or bought any on market without relying on an incentive scheme to build her equity position in the company?

Okay. So Liz has no earlier LTIP grants. She -- well, I'll let her speak for herself on her own shareholding hats. But Liz has not sold any of our shares that she had at the time of the IPO.

This is only the second year that the LTIP has been in place, and we made no allocations to the key management personnel last year. So this is the first time that we have made an allocation to key management personnel in the business of the LTIP plan.

Chair, no further questions have been received for the online platform for this item.

And audio?

Chair, no questions have been received over the phone for this item.

The direct votes and proxies received for this resolution is shown on the screen. In regard to the open proxies given to me, I'll be voting for this resolution. Resolution 7 is in respect to the grant of performance rights to Andrew Stannard, Platinum's Finance Director. The Board, with the exception of Andrew Stannard who has abstained, recommends shareholders vote for Resolution 7. I'll now invite questions on this resolution starting in the room.

No questions in the room. Move to questions online.

Chair, we've received a question from shareholder, Mr. Stephen Mayne. Could the CEO or Andrew Stannard summarize Andrew's past LTI grants as to whether they have vested or lapsed? Also, has Andrew ever sold any Platinum ordinary shares or bought any on market without relying on an incentive scheme to build his equity position in the company?

So we've answered the first part of that, Brigitte did, by indicating this is the first year that the KMP have been eligible for LTIP.

You'd better answer, sorry.

I don't know that though.

So in answer to the first part of the question, no, this is the first year that the LTI has been awarded. So similar answer to the previous question. In terms of my personal shareholdings, I'm fully invested in Platinum in terms of both my superannuation and through the funds mostly. So -- and also through the deferred compensation plan and so have not needed to supplement that in any way with further purchases of myself.

Thank you.

Chair, no further questions have been received through the online platform for this item.

And audio?

And Chair, no questions have been received over the phone for this item.

Thank you.

Thank you for that. The direct votes and proxies received for this resolution are shown on the screen. In regards to proxies given to me, I will be voting for this resolution. Okay. And there is a Resolution 8, a conditional item. Ladies and gentlemen, as stated in the explanatory notes to the Notice of Meeting, Resolution 8, the spill resolution is a conditional item of business -- I wasn't expecting the fanfare. Ladies and gentlemen, as stated in the explanatory notes to the Notice of Meeting, Resolution 8, the spill resolution is a conditional item of business, which is only required to be put to the meeting if the company receives a second strike on its remuneration report with at least 25% of the votes validly cast on Resolution 4 being cast against that resolution. The votes and proxies received for Resolution 4 are shown on the screen, so it was in excess of over 75% voted in favor of our 2022 remuneration report. Based on these results and the number of votes represented at the meeting today, I'm pleased to see that it appears that we have not received a second strike on our 2022 remuneration report. However, as Resolution 4 is being considered on a poll, and technically, the results will not be known until after the end of the meeting, this Resolution 8 is being put to the meeting. Therefore, the poll is a contingent poll. This Resolution 8 will only have effect if Resolution 4 does not pass by more than 75% of the votes cast. Conversely, if Resolution 4 passes on a majority of more than 75%, this spill resolution will be deemed withdrawn, and any votes cast on the spill resolution prior to withdrawal of the spill resolution will be treated as invalid. The Board does not consider Resolution 8 to be in the best interests of the company or its shareholders and strongly recommends shareholders vote against this resolution. Having regard to the significant action taken by the Board to address concerns raised by shareholders and proxy advisers regarding last year's remuneration report as well as the significant costs that would be incurred if the company is required to call and hold a spill meeting and the disruption to the Board, which could undermine the company's stability, I note that the key institutional proxy advisers have all recommended a vote against the spill resolution. I'll now invite questions on Resolution 8 starting in the room. No questions in the room. Do we have any audio? Sorry, any online?

Chair, no questions have been received through the online platform for this item.

And the audio?

Chair, no questions have been received over the phone for this item.

Okay. Thank you. The direct votes and proxies received for this resolution are shown on the screen. In regards to open proxies given to me, I will be voting against this resolution. Ladies and gentlemen, that concludes the formal business of the meeting. A Computershare representative will now collect the voting cards from the floor. For those voting via the online platform, voting will remain open for a further 2 minutes, following which, voting will close. Please ensure that you've cast your votes on all resolutions. The results of the poll will be announced to the ASX later today and published on Platinum's website. Andrew Clifford will shortly provide his informal address on investment performance and global markets more generally. He will also take any questions that you may have. [Operator Instructions] We'll just give it a minute for that. It's a long 2 minutes. I now declare the meeting closed. Over to you, Andrew.

Okay. So unfortunately, because the meeting has run a lot longer than it generally would, we are on a 15-minute time line. So I had a presentation here I was going to take you through a range of issues in markets. But the odds are if I starts speaking, I'm going to blow that 15 minutes entirely on that. So what I think if it's okay with everyone here is it might be more interesting for all of you to just go to Q&A, and you can ask me questions on whatever you would like regarding markets. If I can sort of see around the room, that's how you would prefer to go or I can speak for the 15 minutes.

[indiscernible]

Okay. I'll try and do a very quick version and not go for too long. So there are 3 issues that are really in markets today that are sort of grabbing the headlines, and I think they're each worth looking at. The most obvious one is inflation and interest rates. I think it's pretty simple that inflation is likely peaking. Inflation was the result of all the spending that was put into the global economies during the pandemic. It was funded unusually by the printing of money or going to the banking system. It's pretty old-school economics. You print money, you get inflation. It came through with a lag as it's traditionally understood. That finished 8 months ago, not 10 months ago. It's not surprising that -- it would not be surprising if inflation shortly peaks. The problem is it's not really the issue. The fact is the unwinding of that excessive money supply is also a pressure on asset prices globally. And it's not surprising that with the end of money printing, markets started to fall. The next issue is going to be earnings and -- because higher interest rates and that tighter monetary supply will impact the economy. So we've seen growth stocks that led the bull market fall, but valuations are still very high. And I put these in 2 camps. There's the unprofitable companies or some that have dubious business models. As they are now cutting expenditures, whether that's an e-commerce company cutting their search engine marketing or their -- for a software company, their product development, what we know comes next is sales growth will slow. So even though stocks might be down 50%, 70%, in all likelihood, many of them will be challenged to ever be profitable, and we will see their sales growth slow. Then there's the larger well-established companies. Let's think of the [ Fengs ] and Microsoft and what have you. These companies are already showing signs, all of them, of being impacted by a slower environment. And I think that will go on for a while yet. And while they've fallen, the valuations may be okay, but I don't see any great prospect for a bounce back there. And as we've seen with companies like Facebook, the world can change very rapidly on you in some of these areas. So I don't see -- I see a lot of risk in those stocks still, even the best of them. China is the other headline that we all face with as investors. Predominantly, this is an economic story, right? The property market has crashed. It crashed a result of reforms put through by the government. COVID is the other issue. And people focus on 0 COVID, but the real error here was not getting the population vaccinated with vaccines that work. They're both large policy errors. But the economy will recover from both of these things. In the property market, there's clearly action. There has been 4 weeks but continue to be announcements about ensuring funding of unfinished developments that will remove that overhead. And clearly, COVID -- how do they get through this again? I don't think there's any point looking at the day-to-day announcements about it. But China will get beyond COVID. The other issue with China is political tensions with the West, and they are very real. I have always said I believe that one limiting factor here is the interdependence of both the West and China on one another. And we can see that live today. So on one level, we have our government's breaking China on various issues. And yet, President Biden, Prime Minister Albanese of the G20 were all keen to reestablish relationships. I can't dismiss possibility of mistakes being made by our political leaders on either side. But when we focus on things like Taiwan, where the actual assessment of the U.S. security agencies is that there's unlikely to be an invasion, we miss the real risk, and there are a whole range of them. We see it in the semiconductor industry. Companies like NVIDIA with their leading products are not allowed to sell them into China. For me, I think my greatest fear about China is that the U.S. government will sanction our ownership of Chinese stocks. So we can take action on that. We can stay away from companies associated with the government, and we can limit or certainly limit our exposure to the companies that are more likely to be sanctioned. I think ultimately, the Chinese market will recover strongly, and it will recover strongly because of the economy, but those political tensions will remain. And I would also point out that I don't actually believe the market is genuinely that negative on the political side of it. So I would just put up Apple as the example. Apple is a company that is entirely reliant on China. 95% of its products are made there. When the U.S. government kneecapped their biggest global competitor, Huawei, Apple was a key beneficiary. So this is the greatest private company in China broken by the U.S. government. And who benefited? Apple. If I was worried about a company from a political point of view, I would be selling Apple. Now Apple is down, but it's not down in line with the political risk that is supposedly being priced in to Chinese stocks. In Europe, we have a clear one-off loss of competitiveness for the European economy as a result of higher energy prices. The economy, though, is showing itself to be surprisingly resilient. There are winners and losers. Clearly, if you're a high energy sort of cost business, you're struggling or you're closing down, and this is going to take some time to resolve energy supply into Europe. But I would note that markets are very good at resolving these sort of issues when the profits available are extreme, and they are. So I think there is a chance that the whole energy solution for Europe will come through a little bit faster than we might think. On markets, there are huge divergences between different markets and within markets. So there are opportunities here to buy stocks. And I put them in 4 categories. Firstly, there are assets that are priced in a very different economic and interest rate environment to the one that we look at in the developed world. And in the center of that story is China, but it also extends to much of the emerging world. If you were to look at our Asia Fund today in which I'm one of the co-portfolio managers, we are running this at a quite fully -- not quite fully invested, but at sort of 92% net invested position today, which reflects that bullishness. There are also businesses that have been harmed by low interest rates, and the most obvious one are banks around the world who were once seen as great franchises because of their branch networks that brought in low-cost deposits. Low-cost deposits are worthless when interest rates are 0. But as rates go back up, the profitability of these banks will improve. These were playing predominantly in Europe. There are also businesses in the next category of those that have yet to recover from the pandemic. Travel is one. Autos, which had huge supply chain problems. We've undersupplied the auto market for a number of years now. And there's clearly lots of exciting things going on in that market as well with electrification of vehicles, autonomous features and the like. And then generally, I would just note that there are sectors that are deeply out of favor with investors. You might categorize many of them as being cyclical. They have some degree of cyclicality. I would point to high-quality industrial stocks such as a MinebeaMitsumi in Japan, which makes a broad range of components that go into industrials, autos, electronics. This is a company that grows very nicely through time. It has cyclicality, but you can buy it on 10x today, which is about as good as it gets. In semiconductors, a Microchip or an Infineon similarly at very attractive valuations. And typically, there are huge swathes of the market that are trading at levels that we've really only seen or new levels we've not really only seen in crises or prior recessions. Finally, the other opportunity in markets is still on the short side. I've mentioned the highly valued growth stocks. I think the shorts, particularly those with dubious business models or those that are heavily loss-making, and I include in that you cannot exclude stock-based compensation from a company's P&L, anyone someone starts talking to you about their breakeven on EBITDA level, I would run for the hills. And clearly, there are many companies that are still, will be for some time, there were huge beneficiaries in COVID, think things like bikes and boats and what have you, exercise equipment, all the physical goods that we bought up during COVID, they will have a long period here of sales falling back to and below trend. And with it, I think the profitability of those businesses will be quite dramatically impacted. So I think there are still opportunities to short in that area. So I will stop there, and we'll take questions until we get physically removed. Yes?

You talk about the -- contrary to some views around the world or around the markets about whether we're at the end of the soft period or the markets are ready to run again according to some. Your view clearly is not that the situation you feel there's a lot more to come. Can you clarify even further that do?

Yes. So I think that, look, we'll have bounces in markets, so everyone is obsessed with the idea that we're looking for the turn in interest rates or that they aren't going to go up a lot further with inflation rolling over. And I think that that's probably right. I mean we will -- in the same way you didn't want to believe the central banks when they told you rates wouldn't rise until '24, '25, I think you've got to understand, they're just trying to get in our minds what they want us to believe, not what is actually going to happen. So we behave consistently with that. So I do believe there'll be a point here where rates stop going up, but there is now the earnings impact. And typically, if you look at history, you'll find the market doesn't really bounce when market -- when rates get cut. I mean it'll have a run, but then you face the reality that earnings are struggling. So having said that, I mean, you don't want to walk into markets with that predetermined view. You have to assess what it is. And I said I would be buying stocks based on what I think their profitability will be in 3 to 5 years' time, not the next 12 months. Yes?

You talked earlier, I think, about a new prospective fund focusing on decarbonization. So just 2 questions. Can you give a bit of an update on where that is and when it's likely to be available? And if it were available today, what's an example of a company that would be in it?

Yes. So I think there's lots of interesting businesses that are contributing to decarbonization that are not the obvious wind turbine or solar panel makers, which I think broadly are probably uninteresting at the moment. So a company, ones that I've already mentioned something like MinebeaMitsumi, a lot of their componentry is around driving down energy efficiency. Infineon, semiconductor business makes semiconductors that you need in electric vehicles, in charging stations, in renewable. So they've got a very strong position there. That is going to be a major driver of growth in that business. And there's really only sort of 3 to 5 players in that market. So it -- more unusual ones would be UPM, a pulp producer. And you say a pulp producer, well, there's 2 things here. Clearly to -- as a side issue here is removing plastics. And pulp fiber-based products are clearly a big part of dealing with that, but also they have a biomolecules business, so biodiesel, bioplastics that the input is the off-cuts from the pulp process, huge improvements in the amount of carbon released by making classic or diesel from their products. Now lots of people are trying to do this. But in plastics there, their plastic is a chemical equivalent of the plastic that's already being used. And often, that's not the case. So it's a range of companies that we really will think drive this, including companies like BMW, who I still see as a leader in the electrification of our vehicle fleets.

[indiscernible]

Well, look, at the moment, these things have to go through ASIC and we're just waiting to hear back from them for the dual listing of the product.

[indiscernible]

We would hope in the next quarter. But again, it's not sort of in our hands at this stage.

Taking into consideration short positions, what's your net cash position now and which currencies is it held in?

So the net cash position for the International Fund is around the order of 40 -- well, it's not cash -- about 20% cash, 20% shorts. I would look at the currency exposure across all of it rather than just on the cash. And what you'll find is we have around 20% yen, 20% euro, 20% renminbi. You'll get then bits and pieces like the Korean won and what have you, should get down to under 20% U.S. dollars. So I would be reasonably bullish on the Aussie dollar, but I'd actually be more bullish on the yen here than the Aussie. So -- and the euro, I think will do at least as well as the Aussie dollar.

That's a pretty bearish position then from a net cash perspective.

Look, we change our shorts quite a bit from point to point. So -- well, week to week, I should say. I just think the 80% that we have invested in the market, so I think I'm very bullish on those stocks. But on the 20% on short, I'm pretty bearish. I think we can unwind the very big differences we've had in the markets. Okay. Sorry, I think we have to unfortunately call it a day, but we will be around if you want to come and ask any further questions. Thank you very much.

Just one housekeeping note. Ladies and gentlemen, the results of the poll will be announced to the ASX later today. And as Andrew said, we'd welcome for you to join us in the lobby if you have time for a refreshment with the Board and with the Platinum executives. Thank you.