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

Good morning, everyone, and welcome to today's Meet the Manager Webinar for Platinum's Global Strategies. Thank you very much for taking the time to be with us today. We do appreciate that understanding the recent changes and getting to hear from the key people is really critical to maintain that confidence that you have in Platinum managing a portion of your clients' wealth. That's the reason we put this webinar on today just 1 week after the changes really took effect. Firstly, I would acknowledge that I'm hosting this briefing from the lands of the Gadigal people of the Eora nation. I also acknowledge the traditional custodians of the various lands on which you all work today and the Aboriginal and Torres Strait Islander people participating in this briefing. I pay my respects to elders past, present and emerging and celebrate the diversity of Aboriginal people and their ongoing cultures and connections to the lands and waters of New South Wales. My name is Dean McLelland. And with me today, I have Jeff Peters, Platinum's Managing Director and Chief Executive Officer; I have Jim Simpson, Executive Director and Chairman of the Investment Oversight Group; and I have Ted Alexander, the recently appointed Portfolio Manager for Platinum's Global Strategies, including the Platinum International Fund. Welcome, gentlemen.

Thank you.

Thanks very much for taking the time to be here as well to engage with our clients. And we are going to spend about 25 minutes today, starting off with Jeff with the reason behind the recent changes. Then I'll allow Jim to sort of introduce himself and explain the role of the Investment Oversight Group. And we've had a number of questions about the role of that group and how it interacts with the investment team. And then we'll spend some time hearing from Ted as we talk through his career, his work experience, his approach to the role and his outlook for markets as well. We will have time for questions and answers. We can go all the way through to 11:15 if you've got questions. So please pop them into the Q&A function at the bottom of your screen. I should also note that today's webinar will focus very specifically about the global strategies. And we'll make the point that most of the recent changes, they don't impact the other funds. So we'll emphasize that as well. I should also note that the Platinum Asia Fund that we won't be talking about today is rewarding patient investors with some great returns over the last 6 to 12 months and is fully invested to capitalize on the recovery across that region and market. So worth having a look, and please do reach out if you would like to talk to myself or Michael Rockliff about the fund. With that, I think it's time to get going.

So Jeff Peters, I'll start with you. Most of our clients will know you having met you from when you joined early last year. The recent announcement of the change in leadership for Platinum's Global Strategies came as a little bit of a surprise to some people given that changes were made in early 2024. So hoping you can just explain the circumstances that have led to the recent changes, which have resulted in Ted here joining as our new Global Strategies PM.

Sure. And let me actually start by adding my welcome and thank you to everybody for joining. So the genesis of the moves in the International Fund, and I'll reiterate, these moves are only in the International Fund. None of the other products that Platinum manages have been affected in any way nor will they be. But really harkened back toward the end of the year when Clay Smolinski, Portfolio Manager of the International Fund came to me and basically said that he needed to take a break. He's taking a 6-month sabbatical from Platinum. At the end of 6 months, we're going to reengage with him and see if there's a role for him to come back to. I would tell you, I don't think it's going to be running the international fund. You can't step away from a portfolio for that long and then come back and pick it up, but there may be something else in research or another great role for him, and we'd be delighted to have him back if he's ready to do that. That, of course, led to a lot of discussions about what to do next. And Andrew Clifford and I met at length and talked about what the options were. He's reached a part in his career where he's sort of thinking more in the shorter time frame, as I think everybody knows. And I really didn't want to make a change in this fund twice. So that sort of ruled him out, although he's definitely staying and you'll hear about the investment oversight group and the role he's going to play in that, which I think is really important. We also looked at a bunch of other internal options that really didn't make a lot of sense because people are in good spots now, doing very well what they're doing. And it became clear we would need to go outside. We started a process, looked at more than 50 candidates, some people from New York, some people from London, Aussies who want to come home, people here, people in Melbourne, et cetera, and got down to a target list of about 8 to 10 people. And from that list, Ted was clearly the best choice for us. And we're delighted to have him. Why he was the best choice is really twofold. One is he's had a great career and great accomplishments. I mean, Broad Scholar, a long history, 17 years, I think, in the business, has run global long/short money as well as a bunch of other money, has a history of outperformance. All of those things are wonderful and really helpful. But what really was also important to us is fit. We wanted to make sure that in making this move, we didn't change sort of who we are and the Platinum philosophy and the basic way that the International Fund is managed. I'm sure there will be some enhancements and some things that change, but the philosophy won't. Ted's got a long history of being benchmark agnostic of looking for contrarian ideas, making sure the portfolio looks quite different from the index, operating under conviction. The very first thing he said to me was valuation is where I start, and that's what Platinum does. And we tested it a lot. I met with Ted. Andrew Clifford met with Ted, Clay, Kerr Neilson, the Board, Jim, everybody met and we had a good long set of discussions, and it became very clear that, that fit was great, and it was a unanimous decision to actually have Ted be our manager. So we're absolutely delighted to have him, thrilled that he's here and looking forward to great things from him.

Thanks, Jeff. One other question that comes up a lot is we all appreciate the importance and the significance of the rating agencies, the likes of Lonsec and Zenith in terms of how it impacts adviser decision-making out there in the industry. Can you just bring us up to speed, where are we at in terms of how we met with those firms?

Yes. It was one of the first things we did was engage with all the research houses. So we met with -- I don't remember what you mentioned, but Zenith, Lonsec, Morningstar, Genium, et cetera, and had very good productive meetings within the first couple of days of announcing the change. I think they understand what's happened. They understand the path forward. And so we're looking forward to their feedback as we go.

Great. So more to come there. Thanks very much. Jim, I'll throw it to you. Some people out there will remember you from -- like I do, from your days of managing the Platinum Japan Fund. Perhaps you can sort of take us through your history with Platinum, your return to Platinum and really the role of the Investment Oversight Group that you're now the Chair of.

Okay. Thanks, Dean. I started in this business in 1989, working with Kerr, Andrew and Liz at Bankers Trust. I was on the Asian Fund with Andrew. In 1994, early, we left to set up Platinum. And I worked alongside Kerr and Andrew and Liz for 13 years until I decided to step back in 2007, I need to sort of take some time off. I've been away a long time. I've been away 17 years doing my own thing in investment markets. So I still heavily engaged my own private office. And more recently, obviously, Platinum's been in need of a bit of help, and I've joined the Board and the opportunity has now arisen for me to step forward and take a greater role in helping in the investment management function. So I've moved to an executive position, and I will be here 5 days a week full time now. In terms of the IOG, so it's important to understand that Platinum has been moving away from the all-powerful overarching CIO model for a little while now and moving towards a model where the portfolio managers is totally empowered. And if you want to call it the CIO function is more in a supportive role. So the IOG was set up in that vein, but also to connect the executive function, so the people like Jeff and Douglas Isles with the investment management, the people who know about investment, so they can discuss the key issues. So it's important not to be frightened about this change. What it basically means is there's 2 aspects to it. It will primarily function as an investment management role fostering culture and mentorship of the team. So for instance, in the finest traditions of Platinum, my role will be to get amongst the analysts and the portfolio managers and poke the hell out of them, ask a lot of questions. That is in the finest traditions of what Kerr and I used to do. So in terms of the #1 benefit I can provide in this role, I've thought about it a lot, and that is what I would need to do. And Andrew will be doing the same. So Andrew joins alongside me on this committee -- sorry, group is a better way of putting it. And our day-to-day function will be to engage with the investment managers. In terms of what the Board itself does, that will include all members I've just described, and we'll deal at a higher governance sort of level. So for instance, we'll look at compliance issues where the portfolios are positioned within the bounds that they meant to be with under the PDS and any other key issues that come up such as currency management, shorting policy, any changes we might need to make in those areas. But it's important to emphasize that Ted, as a portfolio manager will be able to do whatever he wants with his portfolio and that we will be in a support role, a very important support role, but supporting role to that. So that's basically what we're doing with the changes.

And over the next sort of 6 to 12 months, what would you call out as probably the top priority for the IOG?

So seeing as I've just assumed the chairmanship of it, I want to do a full review of its function. So I've been discussing who should be on it, how often it should meet and what things it should look at. So we just need to do a quick refresh of all those sorts of issues, which we're getting up to speed on. And then -- but as I said, the main priority, I think, is me and Andrew engaging with the team to foster the idea generation engine which is the beating heart of a funds management organization. And it's something to be nurtured and supported. And that process is a very delicate one. And so we plan to focus most of our energies on that.

Great. Thanks very much, Jim. We did call this webinar, Meet The Manager Webinar. So it's good to get to your role, Ted. Welcome, your very first Platinum Webinar.

Thank you very much, Dean.

I guess you are the newest member of the team, along with an analyst that you brought with you. Perhaps you could take us through your journey all the way from sort of university, all the way through your work experience. And how will that experience really help you navigate markets and manage the Platinum Global portfolios going forward?

Absolutely. And just to start by acknowledging that many of you probably have never heard of me and really thank you for tuning in today to find out more. I want to acknowledge that I understand that I'm a custodian of many of your families' financial assets, and that's a responsibility I take incredibly seriously. And I'm really going to do everything I can to produce the best outcomes for you and your families. But a little bit about me. I'm from Tasmania and I studied economics at the University of Tasmania. And basically, the first financial economics class I had with Dr. Bruce Felmingham, I was just hooked. I was fascinated by financial economics. And that led to a real focus in my studies that drove me to win The Rhodes Scholarship to go to Oxford and get a masters in economics and something I always really enjoyed then straight into industry and working in fund management in London, where I was for 7 years at a company called Neptune. The reason why I was keen to go to Neptune is that they wanted me to run money straight away as a portfolio manager. So that's something I've done for a long time. I ended up as the Head of Alternative Investments. I ran 2 long-short equity funds, global funds, so built the experience towards where we are today. I returned to Australia in 2014 to work with Magellan as a Head of Healthcare, which added more experience to what I was doing. But after a few years, I left to start my own -- or sorry, to start a new funds management, company called Orca that was owned by Evans and Partners. Now this was building out from scratch. So they didn't have any product. They didn't have any team. So it's hiring analysts, designing the products, and we had about $400 million under management at the start between an Asian Fund and a Global Fund, long on the equities. So again, I'm striving towards the experience and make sure a process was correct and running the show yourself. Then 2 years ago, I left there to start my own fund management company called BML Funds that I owned myself and ran the company. Again, it's another challenge that you're learning towards getting the skills to where we are today. We got towards $1 billion, over $1 billion in assets at BML, which was great. And then this opportunity came along and I jumped at it. But what I want to point out is I've been running money for a long time, so I've got that experience. And I've got experience in long/short equities. I've got experience in Asia, in China, in Europe, in the U.S. I've got experience as Head of Technology Research, Head of Healthcare Research, Head of Communications Research. I've done analysts, I've done process. Everything I'm doing today, I've done before. So I've got that experience that can help me in this process going forward.

Thanks very much for that. Certainly, the change in portfolio managers can bring light to some uncertainty. So it's really great to hear how your experience is quite aligned to Platinum's. I guess what was it that attracted you to join Platinum to manage our global strategies?

I mean it was an absolute no-brainer. I jumped as soon as they mentioned the brand name Platinum, I jumped straight in and said, absolutely put me in front of them. I'll do what I can. It is the greatest fund management brand in Australia, in my view. It's got a great history. So what's that brand built upon? It's built upon a legacy of intelligent investing in complex markets. And that's a long history of that, really trailblazing in global funds management. That's really exciting. It's true to label active management. That's excellent, right? Yes, we've had a period where the top 7 stocks have really wonderfully outperformed, and there's not so much an active manager could do against a passive index in that circumstance. But by far, the majority of the last 20 years, the biggest stocks have underperformed and the best management has been active management with contrarian ideas exactly the kind of style that Platinum is doing. So my view is over the next 5 years, Platinum is exactly where you need to be, contrarian thinking. We're set up -- we're seeing in the market at the moment is moving slightly towards the direction we're saying. We're seeing the consensus stocks getting hit, a rotation into European stocks into China. And so we're seeing the benefit of that Platinum style coming through. That's the brand. And so that's the excitement of coming in here and having these strong ideas, putting it forward in the best possible environment with the best possible brand. It's absolutely so exciting to be here.

Thanks very much. It feels good to be part of it with you. In the conversations we've been having with researchers, with investment consultants, with advisers, many of whom have joined us today, I appreciate that. We've had this strong sense of people want to see the performance of the Platinum International Fund improve pretty significantly from recent times. And there is a lot of interest in the time line and the approach for yourself reviewing the portfolio or the positions and how you're going to enhance the portfolio. So admittedly, this is the fifth day of your first week in the role. But can you share your thoughts on how you're going to approach that and sort of set the expectations for what clients could see over the coming months?

Absolutely. We're ahead of where we think we'd be in 5 days. I've met with each analyst, every stock that is in the portfolio, long and short, we've done a full analysis of. We've got generally that first stage where if the analysts likes it, I like it, easy consensus hold. As a stock, the analysts have said, we've already done what we're doing with the stock. I agree, that's a consensus sell. There's a bunch in the middle that like, okay, there's some questions we have. Let's do a bit more of a deep dive, so that will take a couple more weeks. Once we've got the ideas, those consensus sells, in particular, that will come out of the portfolio, it's then finding the stocks that replace them. And so this is a great chance for analysts to pitch new ideas, but also I'm bringing new ideas in areas that I've covered a lot more. I think health care is a pretty obvious one that I've done a lot of work on, and that's something we might bring in. But the whole point is it's a process. And what matters for the process is the whole portfolio. U.S. clients don't get given 40-odd stocks and 20 short positions. You get one product, the performance of the fund overall. That's what I bring. My bread and butter is being a portfolio manager, controlling overall how much exposure do we have to China, to U.S. to Europe, how much do we have to expensive high-growth tech cyclicals and how much do we have in cheap defenders over here. So thinking about those factors overall that really is driving the process. So we don't just say, we're selling those stocks and buying those stocks and let's see what the end of result is. When we're doing those decisions, it's not just an individual stock decision, but a portfolio decision as a whole. I'd certainly say the overriding theme, I really want to say honestly to you today is there is absolutely no agenda to change how the fund is invested. The Platinum product is wonderful, okay? And it's set to outperform in the coming years. So I'm not coming in with any particular bias towards one thing or another. What I would not acknowledge is there's a time for lots of different investments. And so 6 years ago, and I had conversations with Kerr about this, with Andrew and with Clay, a lot of the positioning of Platinum can change over time. There's no agenda to do so. But what we need is a great process thing. What is the best way I can make money for my clients, but not risk at all by going with a herd and getting smashed in a downturn. So that's where we're thinking contrarian ideas to make money for you guys and also protect it in a downturn.

There's 2 elements that we can dig into there. One is the sort of geographic exposure that's been quite differentiated to a lot of the other products and parts of people's portfolios. And the second thing is that downside protection. So just in relation, the international fund has a little over a 20% exposure to China, and it appears that patient investors are being rewarded finally. Can you -- you've mentioned a little bit about your China experience, but can you maybe just dig a little bit deeper on your experience with China, your comfort with investing in Chinese equities, like how you think you might be adjusting that part of the portfolio?

Yes. So my first hire into Platinum was a China analyst, to give you an idea that I've got that commitment to China and interest in it. So Ying Luo has worked with me for the last 7 years. She is the best China analyst I've ever worked with. She joined me as part of the transition into Platinum. We spent a couple of days this week chatting with the Asian team, talking to ideas. It's an extra resource. We're going to help them. They're going to help us, work together the Platinum way, it's going to be great. So I've invested in China last 7 years. I ran a specific China -- Asia Fund that was majority China when I was at Orca and Ying was helping me there. You look at the big stocks in the portfolio, Tencent, I've owned for most of that period as well. So I certainly have a long experience in investing in China. That position is starting to work. And it's great. But it's also not necessarily a bias to China. I don't think -- we're always thinking China has to be the biggest investment. But at the moment, we've got a situation. If the China consumer confidence returns, the stock is going to rocket. There's so much upside in those China companies. And you're looking -- when we look at the U.S., U.S. consumer confidence rocketed after COVID. People spent more than they earned, right? And in China, they saved it. They were really [ rocked ] by the restrictions in activity and then real estate pricing, confidence fell. So we saw savings rate going up, and that really cut down on GDP growth as part of it. So we see that confidence coming back in China and the spending going back. The risk in some of those positions will come down as well. These stocks can make a huge amount of money. So I'm really fascinated by China. And I think right now, I'm very bullish on China.

Great. And on the downside protection question, I think that's been a big part of the investor experience and has become sort of an expectation as the previous managers navigated through the Tech Wreck, through the GFC, through the shorter crash in 2022. So how will your approach to providing downside protection be similar? Or how will it differ to the PMs that came before you?

Yes. So I mean there's kind of 3 to -- I have the same tools that the managers have had before. And in some ways, they're going to be very similar in use in other ways different. So first of all, you've got on the long side, not owning the big consensus stock. So you want to -- you don't want to be with a herd in a stampede. So if we see a big cyclical downturn, we saw a bit of -- starting to see a little bit of that now. And what we're seeing is those big consensus names getting hammered, diversify contrarian ideas, do better in those circumstances. You've got a different profile. We really want to make sure when investors think about Platinum, we're in a different bucket than your core benchmark following global equity fund, contrarian. So differentiation. So for investors, you've got some diversification in your portfolio in times of high risk that can really help. The second factor is cash. Now I'm not a big cash guy. So I know that historically, there have been high cash levels at times in the Platinum Global Fund. I don't think that's part of its DNA though. I don't -- my belief is that we should hold minimal cash that we should be as active as possible, that we don't earn fees to leave money in the bank. So I think you'll see a lower level of cash going forward. But if you're worried that's taking the risk up, then there's the short side. Now I've already done one trade this week, Platinum, and that was to increase the shorts. So it was my first quarter call thinking about shorts. Now there's times you want to express your short thesis through the index, and that's going to be really appropriate, and that's general broad downside protection. Other times, it's going to be individual themes in a stock or a thematic basket that's going to reflect that. But it certainly is a tool that I plan to actively use to control that downside protection, the risk of the portfolio overall.

Great. This will be our last question from me. So I just remind everyone, please do pop your questions into Zoom down below because we'll start addressing those next. It's really switching gears a little bit. So just take some time. You've already spoken a little bit about your views on China. But more broadly than that, can you just sort of lay out your views on the current market environment and the outlook that will be sort of influencing your portfolio decisions over the coming sort of quarters and halves?

Yes. Well, let's go back 100 years or so. Why do we have stock markets at all? What's the purpose they're doing? And the purpose is you've got this huge amount of risk in business, right? And so someone is going, I can't take all that risk on myself. I need someone to help me. And someone says, I'll take some of that risk and give you the money and take some equity in the business as part of that. So I've got a lot of upside potential, but I'm bearing risk. I don't like risk. That's terrible, right? And so for a lot of history, the more risk you took on, the more reward you got. So the idea of taking on these tech stocks were these just go up every day and they're boring. These are tech stocks, right? They might go up 100%, they might fall 40%. And so it's all about pricing the assets according to how risky they were. So if you were a hero and went for these really risky stocks, you get this huge upside potential. Today, we don't really have that because these stocks have become very expensive. And so there's no point in being a hero and taking on the extraordinary risk of some of these business models if the reward isn't there. At the same time, since COVID, investors have had just this great sort of bull run. And so a lot of people are pretty complacent about risk. And so there's a lot of the boring quality plays are now offering huge potential upside. They're not taking much risk. And this isn't always the case. This is a risk contango that we've had coming through and particularly in the last 12 months. It wasn't as bad previously. We actually do have a downward sloping risk-return curve for the first time in history really. And so it's a really extraordinary situation there where you can get a better return on really a more boring defensive stock that will protect in a downturn. And so what I see at the moment is the smart money goes to the quality stocks. And so we're looking for those ones as well as what we already have quite a lot is unknown stocks that can produce differentiated returns. This is what's something we're seeing. And we've seen a little bit of this rotation starting February into March, the kind of thesis I'm saying. But I think there's a huge way this can go. I think you look at -- there's pharmaceutical stocks that could double. There's consumer staples stocks that could double, the traditional names that we all know, well brand names. So some interesting plays in there, I think we really want to have a look at. But the big theory is be flexible, watch what happens in the market. My opinion can change day-to-day in terms of understanding news as it comes through. The risk at the moment, there's always a lot of risk, but the new administration is bringing a certain type of risk right now to get your head around. So we're watching that as well. It's a fascinating time in markets. It's great to be here.

Great. We'll start taking questions. We had a few questions come in on registration. We've had some more coming in live. I guess one thing we've touched on it a little bit, but the continuation of the Platinum way or the evolution of the Platinum DNA, I guess. It's always been more than just value, but I think it would be interesting to hear how has the Platinum way sort of been expressed to you.

Yes, absolutely. And so I obviously sat down with the Board members early on and then with Kerr, Andrew, Clay, multiple meetings with those guys, even meeting with people that are also in the business, people like Cam on the Asia Fund, really getting an understanding of that legacy of what platinum investing means. And what everyone says it's not just deep value. That's consensus, right? Like, yes, sure, there's going to be some deep value in the portfolio, but we're not just a value player. How do we make money? And how does that look a bit different than where other people are making money? Valuation is the key. It's not just cheap stocks. It's not just saying our P/E ratio is going to be lower than the market. That in itself doesn't really mean much. It's about the valuation, the expected upside we get there. I think there's a huge amount of flexibility within this sort of academic approach of being curious and not just swallowing consensus and avoiding bias. These things are great. And so I think that real message that came through from Kerr, from Andrew, from Clay was a bit of flexibility, was a bit of creative thinking. I really like that.

And Jim, you were here on day 1 when Platinum started roughly 30 years ago. Is that what you...

Yes. I mean the so-called Platinum style is a spectrum. It's not a fixed point in terms of value. So if you look at the original founders, they were always on a spectrum of the way they looked at value with Andrew, sort of more towards the low P/E and Kerr in the middle, and I was a bit more flexible at the other end. So -- and we always had these debates. For instance, we bought SoftBank in 1999, which is a very non-Platinum thing to do, and it went up 20x, I think, or something of that nature. So you do have to show flexibility around this issue of contrarian value. And I think the issue is where you put the emphasis on the contrarian and what catalysts you have to realize that value. And I just think we need a little bit more focus on more immediate catalysts, for example. So there's a subtle kind of shift that could happen there without blowing the Platinum way of doing things out of the water. That's just an example of what can happen. So it doesn't just have to be a fear of just shifting away from some fixed point necessarily.

Great. I'll put 2 questions together here. There was one, Ted, if you can just elaborate on your experience with shorting. And there's another question on how would you look at currency, active currency management or currency hedging?

Yes. Absolutely. So one around the long/short equity funds. A lot of what we're doing, we're creating basket swaps. And so creating -- so finding like 20 stocks that would represent a particular thesis that we wanted to short. And so that's something, again, I've discussed it with Andrew and Clay about the practicalities of how they short, and they've used similar kind of basket shorts before. So that experience is there, absolutely. And sorry, what was the second part of the question?

Active currency management.

Yes. Look, and that's a really interesting one. And so my first job, I didn't -- well, my first job was an apple picker, I go past that. I worked at the Reserve Bank of Australia under Michael Plumb on their currency research desk. And so coming out of a lot of work on currencies. And so I'm fascinated by currency. I think I see it as a core strength. So we'll be very conscious of where we hold any cash we have, but I've also mentioned we're going to hold less cash than we have before. So that currency decision is as much on that what we're holding. We don't come in with any big plans to hedge currencies to move on derivatives there, but that's something that could be considered going forward.

There's a question that relates to a little bit about the client base, I guess it's touching on, which is the changes that we've made. It's a question for you as well, Jeff. The changes that we've made could lead to large outflows. It could lead to outflows of some description. How will they be managed so as to not disadvantage investors who remain? I think it could be important to understand just how sort of diversified and broad the investor base is between mum and dad investors, IFAs, dealer groups, there's not huge amounts of institutional clients that are really going to sort of damage the experience for other investors.

Let me touch on that part and then Ted can touch on the management of outflows that happened. And it has been a week, but I would say we have not yet seen a significant uptick in our outflows, which is good to see, very early, but good to see. I think you said it yourself, right? The international fund. And remember, this is really the changes in the international fund. So I wouldn't expect to see much movement in anything else. And actually, the Asia Fund is an inflow actually this month. So hopefully, that continues. But we don't have any institutional money at all in the International Fund. There are some large wholesale mandates, but there's not any classic institutional money. It's quite diverse between platforms and wholesale and direct retail and not really that concentrated at all. I think the top 10 in the International Fund would be well below 10%, 20% of the fund. So it's quite diverse. And that's the strength. And that's actually one of the big strengths of Platinum is the relationships we have with all of you and the breadth of our capabilities and the breadth of our client experience. So we like to keep that. And hopefully, we'll continue with the strong -- I think February has been a very strong month for PIF. Hopefully, we'll continue with that. And hopefully, people will stick with us, and we won't have to worry about that, that much.

Yes. And just on the fund for a second. It's very liquid. I mean this is part of being a professional fund management is managing liquidity. I've done it before many times. I've had large inflows, large outflows. I know how the business works. So one thing that I've put in place is a new liquidity analysis to make sure that stocks that come in have sufficient liquidity. So there's a slightly different way that I'm looking at that, but I certainly no stock is going to come into the portfolio that isn't liquid enough to ensure the total fund is liquid and can deal with -- so there's no impact. There's no punishment on remaining investors if we have large outflows. It's just part of life. So liquidity makes solves all these problems.

And Ted, you mentioned with Ying joining, you spoke very highly of Ying and her skills and her experience. Obviously, we've got Cameron Robertson, who manages the Platinum Asia Fund. He's over there with Andrew Baud and Josh. How does having that sort of pool of analysts or pool of China specialists working together, how do you see that?

Yes. It's really great. Like we had a meeting with the 5 of us actually the other day and chatting through each of the positions. And it's really good, like they get a couple of people throw ideas. And there's a difference, right? There's 4 white men in the room, and then there's Ying, who grew up in China and has some really authentic experience. So she's sharing a slightly different perspective on stocks, and that's really important. And they're coming through with a slightly different perspective on stocks as well. So I think it actually works really well because we're not bringing the same kind of idea that we're bringing a slightly different set of experience. And that only helps, right? And so their deep coverage as well, they cover so many different stocks that are in the portfolio that are really useful for us, too. So I just think it's something that I'm really excited about working with Cam. We've already got off to a great start. And so it's a massive asset for us to have him and his team. They're all really good. And I'm hoping that they'll find some value in Ying's and my contributions as well.

Great. There's a question in here, which is about Sharpe ratios and alpha. Not really language that's appeared on our monthly updates or our quarterly reports, but they're asking a question about what is your Sharpe and alpha. Is that something that you can shed light on at the moment?

Yes. Well, let's talk about alpha because I love alpha. Now not everyone is an alpha guy. I'm an alpha guy. And if anyone wants the clarification, Jensen's Alpha, it's none of it other alpha that doesn't make any sense to me. So this is about thinking how much risk am I taking that my clients made, how much return am I giving them. So I'm being efficient in how I'm dealing with risk and return. Now I've got a really great track record of generating Jensen's Alpha, and we can go through that because my funds have generally had a lower volatility, a lower beta, a lower downside impact than the market as a whole and my performance has been good. So my #1 focus, how I kind of -- it's always hard. Everyone can compare your performance to whatever they think it should be. And you speak to one researcher or one investor, they've got a different idea. My personal view is that Jensen's Alpha is the best way to look at your own performance, okay? So I understand it. And when we say index agnostic. We're not index ignorant. You need to know whether the index has gone up or down. You need to know if there's opportunities you've missed out there. Like it's just -- we're not with an eye every day to what the market is doing and then going and adopting what they're doing. We don't have enough Amazon because the market has this much. I don't care how much Amazon the market has. But I'm interested if I find that Amazon went up 80% yesterday, I've got to know that news. You've got to know all information in there. And so when I think about Alpha, it's really saying how much risk am I taking with clients' money and how much return am I getting? And I need to know what the market could do, so I've got a comparison there. But also absolute terms are very important to something like Sharpe ratio is about how much volatility we've got versus how much return, we've got the same concept expressed in 2 different ways. So I think it's be really interesting. We're going to look at it. But again, there is no shift towards the index. There's no shift towards making our holdings look more similar as a benchmark. This is just about trying to make every bit of information can be useful in investing in my view.

Thank you. There's a question in here. It comes up quite a bit, which is probably more for you, Jeff, which is, are you looking at fees? Obviously, the competition is increasing out there. How are you thinking about fees for the international fund and across the board?

Sure. So the answer is yes, we're looking at fees. It's a product-by-product, strategy-by-strategy look. So there are different fee levels that are appropriate for each one of the different strategies, not necessarily a one size fits all. We've actually kicked off an effort to develop some alternatives for us as we move forward on the international fund and more broadly on different types of fee structures. My goal will be to actually make changes in those fee structures. It's a little early to communicate that now because that work has begun, but it's not wrapped up. So yes, we're looking at fees. Yes, we understand that there's some opportunity there for us to do things differently. It will be a product by product and more to come.

Great. Thank you. Certainly, the feedback on -- in recent years, I guess, performance and fees, that feedback has certainly been passed through from when we have meetings with advisers and researchers that definitely all comes back through to the executives. So look forward to news there. The last one, perhaps, we'll ask is about the LICs. So there's kind of a couple of things that all happened together there. We have with the recruitment of Ted and with Jim's new role and then there were ASX announcements just about the LICs. So listed investment companies, there's 2. There's a global strategy that falls under Ted and there's an Asia strategy as well. Can you just take us through the -- where we're at with the current proposed scheme of arrangement and then there was a bid for those LICs as well. Just where are we at with that?

Sure. So I think everybody understands that LICs have their own independent boards and those independent boards are the ones that are making the decision. So I can't speak for them and I won't speak for them. But I can tell you that I think it was in April, a strategic review was launched by those boards on what to do with the LICs, and it had 2 primary purposes. The first one was to close the discount structurally forever. And the second was to provide an alternative that did that with like-for-like investing choices. So if you're in the Asia product, the Asia LIC and something is going to, say, PAXX in our active ETF, which is proposal, that's very important, Asia to Asia, right, global to global. We put forward a proposal that was accepted by the Board that accomplished those objectives. And we actually believe that, that proposal is still very solid and have a lot of confidence in it. I think the like-for-like is very important. And obviously, closing the discount out structurally as opposed to temporarily is also very important. And those are 2 things that our proposal does.

There's a couple of more questions that have come through. They're a little bit more detailed in nature. So we'll get back to those one-on-one after this webinar. So for now, I'd just like to thank everyone for tuning in. We appreciate your time this morning. We appreciate that you may have follow-up questions as well. So please do reach out. Thank you to Jeff. Thank you to Jim. Thank you to Ted. We look forward to bringing you more commentary in terms of the monthly updates, the quarterly reports and providing a lot of transparency on Ted's new role. But for now, thank you very much. We'll send a recording. And if you need anything, please don't hesitate to reach out. Thanks very much.

Thanks, guys...

Thank you...

Thank you.