Tikehau Capital (TKO) Earnings Call Transcript & Summary

Hello, everybody. Good morning. Hope everybody is safe in this particular sanitary crisis. And thanks for attending our conference. I'm starting with Slide 4 on the Q1 2020 highlights. We can say that we had solid momentum in a troubled context, EUR 25.4 billion of group AUM, which is 13.7% over 12 months and minus 1.5% over Q1. Asset management activities recorded plus EUR 500 million of net new money in Q1. Group fund recorded limited mark-to-market effect as a result of prudent capital deployment and an increased focus on long-term sustainable verticals. Fee-paying AUM base for closed-end funds was not impacted by market effects and trend slightly up at the end of 2020 versus end of the year. With EUR 1.2 billion of cash on its balance sheet and EUR 5 billion of dry powder in its asset management, Tikehau Capital is particularly well positioned to navigate the current cycle. Finally, Tikehau Capital enters exclusive negotiation to acquire Star America Infrastructure Partner, an independent asset manager specialized in mid-market infrastructure in North America. I'm moving to the next slide. Strong AUM progression over 12 months, as mentioned, it's EUR 4.5 billion group fundraising, which is 13.7% on a yearly basis. A solid momentum in the asset management was EUR 3.9 billion, which is a EUR 12.5 billion AUM growth (sic) [ 12.5% AUM growth ]. Just commenting the first chart. So a year ago, we were at group level at EUR 22.4 billion. We fundraised EUR 4.5 billion. We give back to investor EUR 1.3 billion, and we had negative market effect of EUR 0.2 billion, which is mainly in Q1, which led to the EUR 25.4 billion AUM. Moving to the next Slide 6. AUM resilience over Q1, commenting the first chart, we started at EUR 25.8 billion. We raised EUR 0.4 billion. We sent back to investors, and we distributed 0.2 -- EUR 200 million, and we had a market effect negative of EUR 0.7 billion, which led to a EUR 25.4 billion. And as a result, for Q1, it's only minus 1.5%. Moving to the next slide, which is our group AUM by asset class. If I'm commenting the pie chart, as you noticed, the breakdown of our EUR 25.4 billion AUM is now EUR 9.5 billion of real estate, EUR 8.3 billion of private debt, EUR 3.5 billion of capital market strategies, EUR 2.1 billion of minority private equity and EUR 2 billion of direct investment, which is a change in the breakdown. That's lead to a very solid visibility on management fee generation. Fee-paying AUM for closed-end fund are slightly up as of March 31, which is obviously positive indication for future revenue growth. Q1 fundraising was driven by real estate with a positive impact of a revenue mix that was already the case at year-end. Finally, acquisition of Star America, which will enhance our fee-paying profile and contribute to improve further our revenue mix, both from an asset class and from a geographical point of view. Moving to the next slide, which will give you on the 12-month basis and quarterly basis, the overview of fundraising within our 4 different asset classes. First of all, private debt, which is more or less flat on a yearly basis and a little bit down on Q1 because we give back money to investors. As you know, we did not launch a flagship in the last 12 months in our private debt business, which we are launching now. Real estate, a solid growth on a yearly basis but also on a quarterly basis. And bear in mind that our real estate is a very diversified business across European geographies and asset classes. We've got residential, office, some retail. Private equity, solid growth a year ago, we were at EUR 1.4 billion. We are now at EUR 2.1 billion and some growth in the quarter. Obviously, it's increased our diversification, but it's enhanced, as mentioned before, the profitability of our asset management business. And finally, capital market strategies, which has been up year-on-year. A little bit negative in Q1 due to mark-to-market effects. But as you know, the performance are visible daily. And we can say that our capital market strategy have performed pretty well during the turmoil in the financial market. Moving to the next one. Slide 9, which is our EUR 500 million fundraising in asset management. You've got the breakdown on an asset class basis. As you noticed, real estate and private equity have been the key driver of our fundraising. Very limited exit on the capital market strategies, which is a very good sign because that's the only area where investor could decide to really money. So it's pretty encouraging if you compare to peers and more important to the turmoil in the context of the turmoil in the capital markets. Despite the fact that it was a quiet quarter for private debt ahead of the launch of TDL V, we can say that we have a positive momentum for real estate. Both on Sofidy and TREO. Capital market strategies have been resilient and private equity saw additional comments. The multi-asset strategy launch with Fideuram is moving in the right direction. And as you noticed, we just announced a partnership with Banca March in Spain to further develop these strategies. Moving to Slide 10 and to Henri.

Good morning to all of you. Just wanted to give you a specific update on valuation issue in the current environment with lots of volatility as we have seen over Q1. So I will divide that explanation in 2 parts, with the upper part being the asset management valuation. And then I will talk about the direct investment. So as far as the asset management valuation are concerned for Q1, we have our capital market strategy funds. We have actually daily NAV, which are published on a daily basis. So those NAV are fully reflected within our AUM as they are the basis of our revenue generation and with current market practice standards. As far as our 3 other business units are concerned, being real estate, private equity and private debt, we've been doing an exercise of updating our NAV for our clients, for our customer on a quarterly basis. As we have always disclosed, those NAV have been updated using the IPEV standards for each of our asset class. That is key to understand. And we wanted to remind you that in that context, those NAV have been particularly tough to assess in Q1 as far as each asset class is concerned. But that being said, our closed-end funds have duration up to 10 years. And the vast majority of our flagships are currently in investment period. As of end of March, we would like to -- just to assess that the cut-off effect is effectively somehow unfavorable but that it does not reflect the long-term performance potential of the assets that are being hold within our funds. As far as direct investment is concerned, we have been updating our investment portfolio, which is carried out by the balance sheet, and the impact is minus EUR 170 million of negative market effect. A proportion of EUR 150 million of that being concentrated within our listed portfolio. So this is the snapshot effect once again, end of Q1, and which is, by definition, unrealized, but just marking our assets at their value. And once again, with 2 different exercise, the NAV exercise is being carried out at the level of our fund. And meanwhile, updating our AUM figures on the basis of the rules we've always been using at group level use -- rules that are clearly defined in our annual report and where our AUM basis are mostly relying on our revenue generation capacity.

Thank you, Henri. Good morning, everyone. This is Mathieu Chabran. I wanted to then give you a quick snapshot on the planned acquisition of Star America that we are announcing this morning. We are announcing at this stage, exclusive negotiation with this company, which remains subject to some CP to closing. So who is Star America Infrastructure Partners? This is an independent asset manager that was created almost 10 years ago by 2 entrepreneurs: Bill Marino; and Christophe Petit. They are active both in majority and minority investment across infrastructure projects in North America but focusing exclusively on the mid-market project. And that's an important point given the targeted return of this specific asset class. They've developed very strong expertise, partially in the PPP, the public-private partnership, which have -- which are very fashionable nowadays. And specifically in transport; in social, social being health care; student housing; environment; and communication. They benefit from a very international and very specifically in anglo-saxon LP base, U.S., U.K., that could be very complementary to the existing Tikehau LP base. At the end of last year, they were managing $600 million of AUM. If we speak 2 minutes about the infra, obviously, that will be -- if the transaction was to be completed a new asset class for Tikehau in the objective of diversifying our business mix. U.S. infrastructure has a very strong momentum and growth potential, not only the U.S. spendings in that area have been lagging relative to the European countries. It's a much more fragmented and deep market where this mid-market focus is much less competitive than what you would have on the larger projects or what we've been witnessing in Europe. And an important point is that we are expecting global LPs to remain extremely exposed and to increase their allocation to the asset class in the midterm. So why Tikehau is looking at this potential partnership? As I said, there will be a new asset class for Tikehau, an asset class for people, investors have been expecting us to move into for some time. We would be benefiting from a very experienced and seasoned team. And very importantly, with the very same DNA, the same entrepreneurial DNA. That's what we found extremely appealing when we met this team and when we started having this discussion. Obviously, after our opening of our first presence in North America, a bit less than 2 years ago, now that will be a strong support to our growth in the regions, not only in the asset class, but as I said, in reaching out to a new investor base. And as Antoine alluded to, there will be an accretive acquisition in terms of management fee rate. Moving on to Page 12. Very briefly, for those of you who attended our Capital Market Day that took place, well actually, almost a year ago now on May 15 in London last year. We had the opportunity to comment on our M&A approach. For Tikehau, obviously, any acquisition would have to fit the same culture approach. It will have to be value creative. Obviously, it will have to be strategic. And as I said, it would have to be a profitable growth. And we think that's what we identified by talking to Star America. You have a small recap of the various partnership or acquisition we completed over the past few years. And what is interesting with Star America, if you look at this top line is that, obviously, that would check our international expansion, which has been a key driver over the past few years for Tikehau, that would rebalance the business mix with a new asset class in the real asset class, and that's something that since we went public in 2017, we've been extremely focusing on. That would expand our product offering. And as I said earlier, that will be very complementary from an LP base. So if this transaction was to be completed that would tick all of those objectives. Now a quick word, moving on to Page 13, on what has happened since the end of March. Obviously, we've been entering into the situation that Antoine reminded all of us in introduction, but we kept on being busy with few initiatives that we wanted to come back on. First of all, we announced this partnership with Banca March, which is a new, very strategic partnership for us targeting private clients, very similar to what we did in Italy with Fideuram at the end of last year. This ELTIF will be able to give access private clients to our private equity solution, partly focusing on our energy transition strategy, which is a very appealing investment strategy for investor right now. As I said, our partnership with Fideuram, despite a terrible situation that Italy has been going through for the past few months, we managed to successfully announce the second closing with the Fideuram project, as I said, despite this environment. In Asia, we took advantage of the strong market dislocation to increase our stake in IREIT Global, which is this Singapore-listed REIT, real estate investment trust, taking a stake for less -- from 17% to close to 30%. And the stock has been treating up and reacting well to this announcement since. Finally, we are extending our fundraising period to the end of 2020 for our energy transition fund led, called T2, and we are launching our fifth vintage of direct lending fund, our flagship fund that Antoine was referring to and that we'll be marketing in the coming weeks. Lastly, I would mention that the secondary private debt initiative that we announced at the end of last year ran out of New York by Olga Kosters is getting some steam. And the current market condition should prove to be timely for this initiative. And likewise, in our Special Opportunities fund #2, which is in the process of being raised, a good momentum, given the current market condition. So before handing over to the -- to some questions, I wanted to reiterate this -- the Tikehau investment case with a few bullet points. Our role remains to be strongly committed to financing the real economy in a sustainable way. We benefit at Tikehau like all our partners in the alternative asset class from very strong structural tailwinds from investors and the thesis remain. We certainly differentiate ourselves at Tikehau with a very strong alignment of interest that we have developed and maintained between the management team, the shareholders and the public investors. As we highlighted to you a month ago when I reported the full year 2019, we are definitely committed to increasing the contribution from the asset management activity to the overall P&L balance. And that's a trend that will continue. We have very strong and diversified investment portfolio. It's extremely granular. There are no single concentrated risk in the portfolio, but obviously, the current circumstances could potentially jeopardize and our objective to refinance the Tikehau balance sheet into Tikehau funds remains very much the case. And finally, the strong balance sheet that you have heard us mentioning many times over the years, liquid balance sheet, as a matter of fact, is a very strong competitive advantage in this situation we are entering into. So in that context, like we did last month, when we had the opportunity to talk to you about the end of the full year 2019, we are iterated our 2022 guidance, which is EUR 35 billion of assets under management by 2022. NOPAM, net operating profit from asset management more than EUR 100 million. Having the balance sheet of Tikehau invested from 65% to 75% into our own funds and with a view to generating a return on capital employed by the balance sheet of 10% to 15%. With that, we would like to turn over to some questions. Thank you so much for attending this morning, and we'll be happy to answer any questions you may have.

[Operator Instructions] Now our first question comes from Geoffroy Michalet from ODDO.

My first question is related to Star America. I just wondered if you would be able to give us some more color on the kind of fee mix that infrastructure is offering and also the profile of IRR on carried interest embedded. My second question is related to private debt. We saw a bit of market effect. I was wondering if this was a hike in the default rate or, let's say, a cautious provisioning, but not yet realized.

Thanks, Geoffroy. So I will start with Star America. I won't be able to comment specifically on this company for obvious regulatory reasons, but I can guide you towards the wider infrastructure space in terms of asset management fees. They tend to be, obviously, closer to the real estate and private equity type of management fees, let's say, anywhere between 1% to 1.5% of management fees on committed capital and not on invested capital, which is obviously relative for businesses like ours and with carried interest in line with the industry. As to the question about the performance, here again, I cannot be specific, given the nature of the discussion we're having. But the company being SEC regulated, you might find public information on the SEC website reporting the fund 1 on performance being 14.6% net IRR on their historical -- on the historical frame. That for the infrastructure question. Now moving on to the private debt. Effectively, as you remember, our private debt businesses not only embrace our direct lending business, which are privately -- private transaction and also the leverage loans. And the leverage loans have marked -- a daily mark. And effectively, part of the markdown that we are reporting on this asset class were registered on March 31, which if you go back to the -- what happened at the last of -- at the end of last quarter, that was a trough, if you take the European Leveraged Loan Index, I think it was around 78 relative to 100 basis. So EUR 0.78 a dollar. I think it's back now to 88 or 89. So there is effectively a part of the mark-to-market that was really spot on the leverage loan valuation. Now as to the private direct lending as Henri gave you the framework that is being reported under the IPEV valuation rules.

Now our next question comes from Nicolas Payen of Kepler Cheuvreux.

Yes. I have 2 questions, please. The first one will be on your cash usage and opportunities and the first one on your acquisition. So on cash usage. We saw recently that you participated in the capitalization of [ Latécoère ], and I wanted to know if actually it was an opportunistic move and if such move actually arise in this kind of environment and if you could benefit from this kind of environment with actually valuation becoming more attractive. But also, on the other hand, did you actually pour cash in into your companies within your portfolio to support them within the difficulties that they might go through currently? That was the first question. And the second question coming back to Star America. I fully realize that you can't comment too much. But maybe can you confirm that it is 100% funding cash from this acquisition?

Thanks for your 2 questions. Antoine Flamarion speaking. First of all, as we've been pointing for now, probably, 24 months, we did not like so much the cycle, and we've been more or less in a piling cash mode. As you remember, at the balance sheet level, the listed company, we've done a massive share capital increase. And we issue new 500 million bonds. So as a result, we enter this crisis with EUR 1.3 billion at year-end. We reported EUR 1.2 billion, as you noticed, but with EUR 1.3 billion of cash plus the EUR 500 million credit facility. So first of all, we've been very cautious on making sure we had a lot of resources, a lot of financial resources. The asset management have more than EUR 5 billion of dry powder. So first of all, on the cash management, as you mentioned, we are going to be very conservative, and the firm has been very conservative. You all remember that we started in 2004. We had the global financial crisis in 2008. We navigate that fairly well and we accelerated our development just after 2008 crisis. We consider we are in a much stronger position now than in 2008. We have a pretty broad infrastructure, 12 countries, 600 people, a lot of cash, a lot of partners, very strong shareholder base. So that's how we enter the sanitary crisis, which has been a little bit of a financial crisis now and more important and more to come, a truly difficult economic crisis. And it's not a question anymore of knowing if it's going to be a V-shape, a U-shape, it [ Nike-type ] shape. But we are fairly pessimistic on the economic cycle. Also, cycle are very different. U.K. and U.S. will be different than Asia will be different than Continental Europe. But from a purely cash point of view, obviously, we'll be monitoring and using our cash in a very efficient and prudent manner. When it comes to [ Latécoère ], as you know, we have a pretty strong and solid research, credit research team. So that's enable us to look at a lot of situation. We are monitoring more than 600 credit in Europe to give you a sense. And we're going to see more and more situations like [ Latécoère ]. So we've been monitoring and invested a little bit of money into [ Latécoère ], but that's enabled us to invest much more money in the current announced transaction alongside [indiscernible]. Mathieu, you want to add a few things?

Yes. And before answering the -- your question on Star, obviously, on this specific transaction. That's the core of for a Special Opportunities business that we are ramping up today. I mean, right now, that we are discussing this TSO. And an illustration of this, strong company needs to have some reinforcement of their equity base, their capital base. That's one of the big themes in Europe is that many mid-market companies tend to be undercapitalized. They've all been benefiting from a very favorable leverage environment. Some of them may have had added a bit too much leverage. And as the cycle turns and when you hit Q2 like we had over the past few months, it will be important to be a real provider of solution to be capitalized or to increase the equity base of some of this European mid-market company. So we are at the core of the strategy of Tikehau here. Now to your question about Star, once again, unfortunately, I cannot comment too much on the terms of the transaction. But you should assume that if the transaction was to be completed, obviously, we'll be focusing at having the team fully aligned with us, which is the intention, obviously, not only to the 2 founders, but the team to remain fully in place and that any transaction could be -- could comprise some element of cash and some element of stock as we've been doing in the past.

Our next question comes from Luke Mason from Exane BNP Paribas.

Just a couple of questions, please? Just wondering if you could give the breakdown of kind of the mark-to-market you've seen by asset class, so real estate, private equity, private debt in the first quarter. And then just secondly, on the pace of deployment within your funds in recent months given the crisis, just given if you're seeing opportunities there or what kind of pace of deployment you've been seeing?

Thanks, Luke, for your question. I think on mark-to-market, I think we said -- we are applying the same rules as we've been applying before. We -- I think at this stage, we will not comment on mark-to-market breakdown. And also very important, the length of this crisis is complex. So I think it's pretty -- we have to be comfortable with our remarks and conservative. And I think, obviously, it will evolve. So it's very different to have listed assets with daily mark-to-market and long-term assets, where it's probably too early. Also, we've been taking some provision. But we are not commenting on an asset-by-asset basis. We'll see. We'll probably do it on mid -- end of June, sorry, on a semiannual basis. We'll probably do that because it will be more efficient. That's first question. I'm sorry, Luke, your second question?

It was just around the pace of deployment you've seen within your fund? Are we going to be seeing opportunities or if it's dried up the pipeline of deployments?

So the -- in terms of deployment, the only thing we've been mainly doing in Q1 is taking advantage of the market dislocation. As you know, we launched already a Tikehau Special Opportunities fund, being able to buy stress credits. So we started investing in March, buying listed credits at very big deep discounts. And to give you a sense, this -- we've been buying credit at, let's say, EUR 0.70 or EUR 0.75, they are now trending back to par. So this market dislocation have been very quick. It's not huge amount of money deployed, but we've been able to do that. We've done 3 things in terms of deployment. And this is one. Two, we continue to invest our financial subordinated debt fund, so buying EUR 0.81 from banks. As you probably also EUR 0.81 have been trading to -- down to EUR 0.75 and are now back to par. So we've been investing a little bit there. And lastly, you probably all see, and it's been disclosed because it's a listed company, we've been able to purchase 1 large Asian investor in our listed REIT in Singapore. This REIT is invested in German office real estate, rented to pretty large tenants like Deutsche Telekom, state pension fund. And one of the shareholder of this IREIT company has been cost seller. And so we've been able to purchase at a very big discount to NAV and at a depressed price, we purchased close to $0.50, let's say, and it's back now to $0.68, and that's enabled us to get more ownership in the REIT, and we've done that with one of our Singaporean partners. So go back to your question on capital deployment. We've been able to deploy capital mainly on listed assets because that's where the dislocation has been pretty quick and pretty strong. Obviously, in our -- all of our various business, we are contemplating transaction, and we are looking at real estate transaction, private debt transaction, private equity transaction. The firm has been working like probably all of you remotely but in a very efficient manner. We think it's too early to take advantage of potential trouble in the private market, but we are monitoring a lot of situation. And obviously, you're going to probably see us invest midterm.

I will -- if I can add one thing, Luke, maybe to Antoine's comment. Specifically, if you take-private debt, remember that a few months ago, people were all very nervous about the bubble in private credit, too much money being raised and would there be enough opportunity to deploy this capital. Unfortunately, I would say, as a consequence of what we've been going through this pool of capital are becoming extremely relevant in the context of the liquidity squeeze that some companies may be able to go through nowadays. So accordingly, as the market starts to reopen, what we are seeing -- and you remember that the Tikehau positioning in private debt as per slide back months ago was very conservative relative to the European average or at least publicly reported. And so what we are seeing now, and even if you know the market is reopening slowly, we see that not only the financing we're able to commit to would be lower levels, probably by a turn of EBITDA, right? And we were already fairly defensive at Tikehau at 4x relative to an average of the market at 5x plus in Europe. And on the other hand, in terms of spreads, obviously, we are now benefiting from a widening of the spreads by, let's say, in 200, 300 basis points. And I'm giving some rough number. And I'm mentioning that because I believe that, again, unfortunately, as a consequence of what has been happening, this asset class, private debt direct lending should come back in force as a very appealing investment strategy for investors. That's one. On the private equity, remember that Tikehau is not involved in controlled buyout, and a very high valuation that control buyouts have been had been closed at, we are doing exclusively minority investment, growth equity. We're providing resources and equity base to family-owned businesses to entrepreneurs. And here, again, coming back to my earlier comments, and that's what we are saying, we see advisory boutiques, investment banks coming back. It's no longer about pitching some control buyout at 20x EBITDA with 8x leverage. It's very much about finding solutions for family-owned businesses to increase the capital base, and we think this is where we're going to be very relevant.

And our view, one of the consequence of this crisis from a purely financial point of view is that all economic actors or players with a lot of leverage will suffer a lot. So the example we gave you of buying out one of the IRET shareholder is a consequence of people being highly levered. And we see casualties in people buying real estate with a lot of leverage. You probably all noticed $3.2 billion defaults from Colony Capital in U.S. real estate. We see a lot of default coming in the BDC space. We see a lot of defaults in the control LBO private equity. People have been buying for the last 10 years, companies 10 initially, 12x, 14x, 16x EBITDA with 40% to 50% of leverage. And unfortunately, with the sanitary crisis, whereby you have no revenues, it's created a lot of trouble, and potentially, also in some of the infrastructure, I'm not commenting H1, which we are not part of, but you probably all been reading what's happening with pretty large player in the U.S. So we see that this cycle will probably enlight the more prudent player. And we consider ourselves as being much more conservative. And I think we had the opportunity to explain that to the market and some of you. So obviously, in any crisis, you have to remain humble, make sure that you are fully operational. You've got dry powder, sourcing, analyze this capacity. And we're going to continue to build over time.

And maybe just a quantitative update as far as your question is concerned. In Q1, the level of deployment of our funds has been reducing a bit more than 10% versus Q1 last year.

[Operator Instructions] There are currently no further questions over the phone.

Louis from the IR team here. We have a couple of questions on the webcast coming from Christoph Greulich from Berenberg. So the first question would be to the calendar for Star America and when do -- when do we expect the negotiations with Star America to be finalized? And for the second question is regards to fundraising, and have we seen any change in the attitude of investors between April and May at the start of Q2? Those are the 2 questions.

Yes, sure. Thank you, Louis, and thanks, Christoph. I mean on Star, once again, and sorry about that, but for obvious reason, it's very difficult for us to comment. As that will involve some consent from existing LPs and the like. So we cannot give you any precise time frame, but for standard in a transaction of this nature. Maybe commenting on the second question, Christoph, on the attitude of investors. As Antoine said, from the Tikehau side, we've been up and running and fully operational across our investor relationship and our dialogue with investors. Sometimes on the other side of the phone, if I may say, that was not always the case and some investors have been focusing primarily in April on their existing portfolio for the company now. What we can say is that many of them remain extremely committed to take advantage of this new market normal, if I may say. And we -- our existing investor base were effectively people who -- they've been investing with us for some time, for some years, and they don't have to go to a brand-new process of onboarding a new manager. We've been seeing some very reactive investors and Special Opportunities fund is a good example of that. Now on the other hand, people who can -- who have to onboard a new manager, go through due diligence processes. I think I mentioned to you last time we spoke at the end of March that we've been extremely positively encouraged by some large global investors carrying out what were supposed to be some on-site due diligence and, obviously, could not travel to Europe, either from Asia or from North America and doing some 10 hours session of Zoom due diligence, interviewing 30 of our partners within 5 offices. So that was extremely encouraging because not only they were doing that, their consultants were doing that. And so we -- whilst, obviously, there will be some delay because of the very nature of what we've been going through operationally, many of the LP were talking to, investors we're talking to are clearly very much on the ball, which is encouraging in that context. And that's why we are in a position to reiterate our 2022 objective.

There are no further questions on the webcast on my side.

There are currently no further questions in the phone queue.

Thank you very much for your time and your presence. As you know, we remain committed on the ball, and the cycle is going to be probably very complex, and it's too early to get a sense. But our view is that the financial player and actors will be a little bit shaken, and it will be very different from insurance companies, banks, traditional asset managers, alternative asset manager. So there will be some winner and some loser. And we are well positioned again with a strong set of people, very robust shareholders and partners. We're going to continue to create and not compete. And we'll see a lot of opportunities coming, especially for people who have dry powder and, more important, a balance sheet. Because if you don't have a balance sheet in such crisis, then it's going to be much more complicated, but you need a liquid balance sheet, obviously. Thanks again. Thanks for your time.