Ninety One Group Stock

Ladies and gentlemen, and welcome to the Ninety One results presentation for the full year to 31 March 2026. I will then explain the performance of our business over the reporting period. Kim McFarland, our Finance Director, who is in London today, while I'm in Cape Town, will then present the financial review. I will then conclude before we take questions. You can submit questions during the presentation via the chat function.

[Audio Gap] to GBP 171.8 billion. This was driven by portfolio growth, the take-on of Sanlam Investment Management and a return to annual net inflows. Net inflows were GBP 2.8 billion for the year. The operating margin expanded from 31.2% to 32%. This led to growth of 12% in our adjusted earnings per share, resulting in a 10% year-on-year dividend growth.

[Audio Gap] it is important to draw strength that the inspiration and inspiration from our long and full history of 35 years. This is a resilient business, which tends to recover after tough periods. Through many market cycles, Ninety One has managed to grow from start-up into the global business it is today. We continue to serve investors, their advisers and

[Audio Gap]. And in the rest of the world, we serve the largest and most sophisticated asset owners and asset platforms as well as a select group of financial advisers. We have ample opportunity to grow market share in the years to come. I thank the many people currently and those who worked for Ninety One in the years before, who contributed to the growth of our company, especially the clients who supported us throughout.

I'm delighted to report growth in revenue and earnings after 3 tough years. The long-awaited improvement in the relative attractiveness of emerging markets as both diversifier and credible investment opportunity has finally manifested itself over this period. This is important to a firm like ours, which is associated with the emerging market asset class. The investment management industry, of course, continues to become ever more competitive.

The partnership with Sanlam, which we announced last year, has been formally established at the beginning of February this year. The relationship is strong and the partnership is starting to deliver. We are indeed optimistic about the potential for this partnership. We accelerated AI adoption and Ninety One is actively moving from experimentation to business model adaptation. AI is a huge opportunity for us. And if not comprehensively adopted and integrated into our business could become an existential threat.

It was Lenin who said that there are decades when nothing happens, and then there are weeks when decades happen. We operate in a world of change, geopolitically, technologically and climate related. AI is changing everything. The value of the companies we invest in, the way we work and the pace at which we work. As a 35-year-old startup, yes, a 35-year-old startup, we simply must embrace this change. During the past year, conditions improved for Ninety One. For most of the period, markets broadened and emerging markets have regained legitimacy.

Fee pressure persists and competition is as intensive as ever. At our interim update, we told you that we are organizing our business efforts in 3 opportunity-facing units, supported by the Ninety One Foundry, which incubates new initiatives outside of those directly in the operating scope of the other 3 units. This structure is now fully operational with clearly identified and accountable leadership teams in charge of each of these units. The format is designed to create focus with an eye on -- to long-term succession. The International Public Markets unit comprising of all our regions outside Africa delivered net inflows across the board besides the U.K. I have said this for some time, but I remain confident that our U.K. business will turn around and resume growth in the years to come.

We have a strong pipeline, and we were a little unfortunate with unforeseen outflows towards the back end of the year as well as delayed inflows in this unit. Asia Pacific was the largest contributor to net inflows, mainly from global equities in the first half and gold, natural resources and local currency fixed income strategies in the second half. Global exchange-traded fund assets under management for the entire industry have grown to almost $20 trillion with 1/3 listed outside the U.S. And over the reporting period, we worked hard to position Ninety One for a slice of the business that will flow via active ETFs. We announced a strategic partnership for active ETFs with the third largest ETF provider in the world, State Street Investment Management.

This is off the back of our multi-decade outsourced relationship with the State Street Group. These ETFs will be co-branded. In South Africa, we issued our first domestic active ETFs under the Ninety One brand. The Sanlam U.K. book has also now been fully absorbed into this business. In South Africa, the structural outflows from the SA institutional retirement funds were compounded by the unexpected loss of a long-standing mandate elsewhere in the region. The funds platform has once again delivered healthy growth, while the unit trust and ETF business remained positive, driven by our income funds.

The Sanlam integration has now moved to business as usual as the final systems conversion will take place shortly. I want to congratulate the team for the way in which they have dealt with this. The relationship with Sanlam is strong, and we look forward to exceeding expectations over the medium and long term. The private markets unit made progress over the past year. We substantially strengthened our EM private credit platform and secured seed capital for new funds. In the interest of focus, we decided to exit from developed market private credit, although we still have developed market public credit offerings in our portfolio.

In the Ninety One Foundry, we have identified a set of exciting initiatives. Firstly, the establishment and strengthening of our in-region emerging markets investment capabilities in the Middle East and Asia was driven from the Foundry. Last year, we announced a joint venture with a Singapore-based alternative investment manager, Arc Avenue Asset Management, which has close links to IDG Capital and its partners in the venture and growth capital community of Asia. This transaction has now received all regulatory approvals and has been fully operational from the 18th of May this year. This substantially improves our ability to understand the IPO pipeline in the region and the rapidly evolving technology landscape and growth investment opportunity set in Asia.

In the Middle East, we have secured seed capital for our first domestic credit vehicle run from the Kingdom of Saudi Arabia, and we have moved one of our senior investors to Riyadh to lead the build-out of the local team covering the region.

The second project of the Foundry is to establish and commercialize a digital finance capability, which helps us align with the inevitable change in the way in which financial services [Audio Gap] to access some of our offerings digitally [Audio Gap]action, evolution of client preference as well as about administrative efficiency. Digital finance can also play a substantial role in supporting financial inclusion, and we will provide further and more concrete updates in due course.

The third project of the foundry is to rethink our business for the AI era and encourage experimentation beyond what will happen in the major business units. We have been investing in and establishing relationships with partners to accelerate this as we are committed to transform ourselves into the active investment manager of the future. Although we have deployed machine learning for many years, the new tools and the improved organization and management of our data will create great opportunities for us to do things differently and better in the future.

It is important to take the entire firm with us, which is easy in theory, but a great deal harder in practice. Let me give you an update on our progress on this front. Within our framework of advocate, equip and use, we can measure adoption rates by cloud licenses and token usage and experimentation within the projects which we monitor. The firm-wide enthusiasm for the new tools is growing in leaps and bounds. We have allocated substantial managerial resource to data organization and presentation of data within the firm. We hope to see a much improved data score by the time we report again.

This will improve our ability to transform the business, which, of course, will drive productivity as well as client outcomes. All efforts on this front have been fully expensed to date. We have not changed our business priorities, including our commitment to sustainability. Our business model remains client-focused, people-centric, capital-light and technology and AI enabled.

Ninety One is a specialist in emerging market investing across the capital structure, including differentiated credit with in-region capabilities in Africa, Asia and the Middle East, augmented by a strong partnership in Latin America. We also have a well-established multi-style global equities platform and multi-asset offering.

This must translate into best-in-class active investing and client engagement over time. Equity markets have been supportive, but gave away a substantial part of their gains in the final month of the year, affecting flows and revenue estimates. Since the year-end, there has been a recovery, but markets have narrowed again, and this puts pressure on systematic broad alpha strategies. This graph shows the drawdowns for the final month. In red and the orange numbers represent the result for the year. To bring this alive, the Johannesburg -- All-Share Index was up by

[Audio Gap] for the first 11 months, but ended the financial year with a rise of 44%. You are all aware of the sharp rebound in markets subsequent to year-end. The same argument follows for fixed income. This chart also highlights the substantial positive performance differential between emerging markets and developed market bonds. Although these are the most concentrated markets since we started Ninety One, 35 years ago in 1991, active managers need to be aware that there have been similar periods of substantial concentration in the past, which, of course, then paved the way for long periods of deconcentration which in theory are good for active investment management or stock picking.

This is an update from a previously used slide to show evidence of a modest -- modest and renewed interest in active emerging markets investing. We are a long way from the enthusiastic pursuit of emerging markets after the great financial crisis of 2008. But it is clear that the momentum is improving. We believe that emerging markets remain a structural growth opportunity. Assets under management grew by GBP 41 billion over the year to GBP 171.8 billion at year-end. This was driven by a GBP 19.9 billion growth in the portfolio, GBP 18.3 billion from Sanlam and GBP 2.8 billion of net inflows from other business. All asset classes except multi-asset have recorded positive net inflows. I have mentioned the flows by client group earlier when we discussed the opportunity facing unit. Noteworthy here is the decline in net outflows from the U.K. client group over the last 3 years. We are seeing a good pipeline, and I would finally expect that to turn positive in the coming year. The U.K. and European teams are now working as one unit. We also expect South Africa to turn around in the coming year.

In September last year, things look very good and indeed improving on the performance front. Unfortunately, the quality equity style, which is a significant part of our equities book started to underperform the mainstream benchmarks. This is a style-related issue and not surprising in these markets. We have full confidence in our team and their ability to continue to deliver for clients over time. Secondly, in South Africa, we continue to struggle in the multi-asset space. We are confident that the improvements we made in this area, including personnel changes, will bear fruit in the near future.

Notwithstanding this, our emerging market investment performance remains strong across the capital structure, and the house is firmly focused on performance as we go into the new financial year. People and culture are central to the long-term success of Ninety One. And despite the long tenure of many leaders in the firm, we continue to remind you that we're building an intergenerational leadership. With the establishment of the opportunity-facing units, we have substantially empowered the next generation of leaders. Active talent management is vital for our future. And we believe that competitive compensation and equity participation are essential tools for good talent management.

Our people remain net investors in the business, and they now collectively own 29.4% of the firm after the dilution from the Sanlam transaction. Ninety One wants to be known as a talent-friendly, people-centric business with an owner culture. Thank you. I now hand over to Kim McFarland, our Finance Director, to take you through the numbers. Kim, over to you.

Thank you, Hendrik. I'm here to present a set of strong financial results for the year ended 31 March 2026. I would like to highlight that our core operating business has produced good results, and we have completed the Sanlam transaction. And so to note, management fees increased by 9% and adjusted operating expenses increased by 8%, with the core business recurring results increasing by 11% to GBP 169.3 million. Management fees were at GBP 617.3 million, -- this is as a result of the increase in average AUM from GBP 129 billion to GBP 151.8 billion, alongside a decline in the average fee rate to 40.7 bps.

The rate of decline in the fee rate has slowed since the interims. For the last 6 months, the average was 40 basis points, resulting in the average fee rate for the year of 40.7 basis points. The factors are once again the mix of a growth in lower fee rate portfolios, including the Sanlam assets and the decline in the higher fee rate portfolios. Looking forward, we're anticipating an average fee rate between 38 to 40 basis points. This is aligned to our previously stated view of a decline of 1 to 2 basis points per annum.

Adjusted operating expenses of GBP 448 million includes the interest expense on the lease liabilities for our office premises and the full bonus accruals, but excludes nonoperating expenses. The adjusted operating profit of GBP 211.3 million is up 12% from the prior year. Other income is predominantly a combination of operating interest and a number of fair value market adjustments on seed investments. A similar portion of this is -- a similar portion of this is the FX losses driven by the stronger sterling to U.S. dollar. The adjusted operating profit margin increased from 31.2% back to 32%, largely where it was at the interim results.

Ninety One's profit before tax after considering the nonoperating adjustments on which I will go into more detail, increased by 2% to GBP 207.5 million. On the nonoperating adjustments, adjusted net interest is the interest earned on the corporate bank balances. The large share scheme net expense is as a result of new awards to staff and accelerating vesting of prior awards. So in effect, reversing the prior year credits recognized. Remember, we fully expense the bonus accruals within adjusted operating expenses, irrespective of how it settles.

IFRS then requires the amortization of these bonus related share awards over 4 years, which is then reflected as a share scheme net credit. There are corporate-related charges and not considered as operating expenses and the amortization of the intangible asset as a result of the Sanlam transaction. The effective tax rate for the year was 26%, down slightly from the 26.5% in the prior year. The above factors resulted in a profit after tax of GBP 153.5 million, up 2% from last year. And our adjusted EPS shows a 12% increase to 17.4p, in line with the increase in adjusted operating profit. This is the analysis of the absolute movement in adjusted operating profit from FY '25 to FY '26.

It clearly shows that management fees increased, but this increase was partially offset by the increase in employee remuneration. This is the analysis of the movement in adjusted operating expenses. Adjusted operating expenses increased by 8% to GBP 448 million. Employee remuneration represented 65% of the total expense base and in the prior year, it was 63% and increased by 11% to GBP 289.9 million. This was driven by an increase in fixed remuneration consistent with an increase in headcount and annual inflationary increases as well as an increase in variable remuneration in line with increased adjusted operating profit.

Over 50% of employee remuneration remains variable and the resulting compensation ratio was 44%, up slightly from 43.4% in the prior year. Business expense increased by 3% to GBP 158.1 million. We have again analyzed the cost changes at a high level, we have broken down the movement as follows: inflation-linked increase of GBP 2.8 million, an FX-linked decrease of GBP 1.7 million, a small impact. However, there has been a pickup in technology and AI spend of GBP 5.6 million, which will continue as we invest in our systems and other cost decreases of GBP 2 million. Many cost categories decreased in the year, but this was offset by the noted increase in technology spend.

Looking ahead, we're expecting the business expenses to increase across the board. This will be driven by inflation, the impact of the additional staff, ongoing technology spend and the new Cape Town offices. This is showing the business expenses and total expenses as a percentage of average AUM and basis points over a 6-year period. The adjusted operating profit margin over the period is also reflected here. Business expenses have increased over the period, largely driven by the investment in our IT systems. Total and business expenses as a percentage of average AUM have declined, aided by the growth in average AUM.

The adjusted operating profit margin has remained in the range of 31% to 35%, and this shows the scale benefits of the Sanlam transaction. And the capital position as at 31 March 2026. Ninety One's qualifying capital was GBP 253.4 million at the end of March 2026. In line with our dividend policy, the Board has recommended a final dividend of 7.4p, taking the full year dividend to 13.4p per share, an increase of 10%, in line with the increase in adjusted operating profit. After the dividend payment, there will be an estimated capital surplus of GBP 163.4 million. This will result in a capital coverage of 241%.

During the reporting period, we continued with our share buyback programs, and this resulted in the return of capital of GBP 27.4 million and a reduction of 17.3 million shares. By taking this into account this proposed dividend, the interim dividend and the buybacks in the year, we will have returned GBP 155.4 million of capital to our shareholders. In the same period, we issued in total 125.7 million of plc unlimited shares for the Sanlam transaction, which completed at the beginning of February 2026. As of the close of last night, we had returned a further GBP 7.6 million of capital, resulting in a closing share count of 1.0016 billion.

In line with our capital-light model since listing 6 years ago, we have returned over 60% of our initial market capitalization to shareholders. A few updates regarding Sanlam transaction. The SA transaction completed at the beginning of February 2026, with a further 16.5 billion of AUM onboarded. The take on of the bulk of the Sanlam assets was near the end of the financial year. So there was limited earnings impact on the FY 2026 results.

As previously mentioned, we will be weighting the shares issued to Sanlam for the determination of adjusted EPS for March -- for the March 2026 results. So for the finals, this looks as follows, simply put.

To start with the number of shares issued at 31 March 2026 was 1.0051 billion. We issued 125.7 million shares for the Sanlam transaction. So at the end of the year, the shares in issue, excluding Sanlam was 879.4 million. Now weighting of shares issued for Sanlam U.K. is 13.7 million, multiplied by 289 is the days since the transaction, divided by 365 is 10.9 million shares. Weighting of shares issued for the Sanlam SA is 112 million times 59, which is the day since the transaction, divided by 365 is 18.1 million. So shares issued for adjusted EPS calculation will be 908.4 million.

The intangible asset arising on the balance sheet for the Sanlam transaction will be amortized over 15 years. This is tax deductible in the U.K. but not in South Africa. And on this final point, I will now hand back to Hendrik. Thank you.

Thank you, Kim. Ninety One is a resilient and robust business with positive momentum. The demand recovery for emerging markets is visible and our offering is competitive. We are indeed in a stronger position than a year ago. We are investing through the cycle in talent and technology to be future fit. The growth opportunity in Asia with Arc Avenue Investment Asset Management, access to the ETF market with State Street Investment Management and the distribution reach that the Sanlam transaction has added gives us 2 or 3 new compelling growth vectors. We are committed to cost and operating discipline, and our focus remains on investment performance and client service.

Over the past 35 years, we have built strong foundations for an exciting future. Thank you very much. We will now move on to Q&A. If you have a question and have not yet submitted it, please do so via the chat function at the bottom of your screen stating your name and your organization. Varuni, over to you in London to handle the questions.

At the moment, we have no questions.

[Operator Instructions]

I have a first question from Murray Moore. Any thoughts on the Schroders comments that they needed more scale in active in order to succeed and hence, the merger with [indiscernible]?

Murray, thank you very much for your question. I think you should ask Schroders to give you the answer on Schroders issues. My simple point is that if you are good at what you do in active investing, you don't have too wide -- very importantly, too wide offering or product set. It's all about competence and quality rather than quantity. If you note, our operating margin is significantly higher than where Schroders was most of the last few years, it would give something away of that focus.

And at Ninety One, we're a focused specialist operating at a scale which helps us to reach the kind of clients we want to deal with across the world, but with clear areas of competence.

And we believe that is sustainable in the current world, even given the current fee decline rate. So size by itself doesn't mean anything. Size that works for you, for example, in passive, where you can really outbid the competitors in terms of price or where size gives you an ability to be at the table irrespective of how good you are is sometimes of help, but not always.

So for [Technical Difficulty] is not the focus and particularly not lateral expansion or lateral growth. In other words, if you grow in the areas where you're good at and you therefore increase your margin and your focus, it is a good thing. If you just grow laterally and add different new product lines, which don't reach scale by themselves, you will in the end, generate not only lower returns for your shareholders, but also over the cycle, worse results for your clients because your organizational focus is dissipated.

So in our case, we're very clear. We concentrate on emerging markets across the capital structure, but we are not in private equity. Why? Because we think there could be a conflict between private credit and equity from time to time. But that gives us knowledge of many countries,

[Audio Gap] the capital structure. We're also a global equity investor in public markets. We have more than one style, which gives us some diversification, but also a differentiated view on markets. But that's one business. That's essentially one line. And then we have -- we serve certain markets with multi-asset offerings, which suit and which are tailored to those markets. That's what Ninety One does. And therefore, it will -- we think we can stick to those areas and grow our business within those areas substantially without any significant natural expansion. What we would do though is expand through partnerships. In other words.

[Technical Difficulty] through skills of other partners who can help when necessary without defocusing or deviating or letting Ninety One defocus from its core offerings.

A second question from Murray. What was the management fee basis points if Sanlam were excluded? Pre-Sanlam, you said the floor for fees was approximately 40 basis points. Now what is it?

Thank you, Varuni. I will let Kim answer the fee question, but let me just add something to the previous. In South Africa, we obviously cover the domestic asset classes across the broad capital structure because here, we play a slightly different role than the specialist position we have in international markets. But these are very close adjacencies that one anyway has to understand if you operate in a small market like South Africa. Kim will talk about the fee trajectory.

Thank you, Hendrik. Obviously, the take on of the Sanlam assets has had a negative impact on our fee rate. It had a positive impact, which I think you can reflect through on the operating margin. But again, that's difficult to say at this point because it's early days, having only taken on the assets at the beginning of February. The fee rate did decline over the period. As you saw, it was a slower decline. And as reflected, it was larger result.

Yes, Sanlam had an impact because there's a number of fixed -- a large majority of fixed income mandates that came on board, but it's not the main reason that the fee rates declined over the period. A lot of it was due to the mix, particularly the mix of some of the large mandates we've taken on at lower fee rates. I don't know if we ever mentioned the fact that we've had a floor of 40 bps as a fee rate. it's obviously challenging for us. And I think I've now guided on the fact that the fee rate is at 40. We're now guiding between 38 and 40 bps.

But we've largely -- we factored in the Sanlam impact, but I think we will still be challenged throughout the year should we be taking on large mandates at lower fee rates.

I think it's always important to note that we don't reprice our back book over the period. So this hasn't actually had an impact on our numbers.

The next question is from James Slabbert at SBGS...

We look at the profitability of business rather than the fee rate when we take it on. And as Kim said, there is indeed a difference, and you can see that in the operating margin. Our industry remains extremely competitive, and that is something we factored into our plan.

The next question is from James Slabbert at SBGS. He comments, congratulations on a strong result. When we think of the asset management business, we see that some players in the market are rewarded for high margins despite outflows. How do you feel about the mix between flows and margins as an indicator of business health?

James thank you, Varuni. James, thank you for your comment. And over time, we like a mix of beta and flows to be kind of net flows to sort of be half-half. Clearly, in recent years, that hasn't been the case. We've had a very strong market support, which helped our business and flows were hard to come by. But net flows are an important indicator of healthy client relations and long-term growth potential. We still believe the core job is to invest your clients money well according to their mandate because they will reward you or stick with you. And as long as they understand the style you apply and the objectives you set out to meet, one can.

[Technical Difficulty]Maybe narrow markets make active managers look if they underperform, but not really underperforming their targets. So for us, first and foremost, it's about profitability of the business or first and foremost, about serving clients well. Secondly, it's about doing it at a profitable way. And thirdly, it's about adding new business. So we are not driven by a need for net flow over all periods. But of course, it's desirous and it's particularly important in the long run that you add both net flow and benefit from market growth.

And that's really the magic sauce of a good asset management business, but it's all based on delivering for clients and being seen and being recognized as capable specialists in your area, which then protects pricing power to the extent the industry allows. In a way, I think we're reaching -- we're reaching a point in it will happen, and we're now already starting to see interest rate rises coming on the horizon. As interest rates rise, I think the pressure on active fees and as active fees approach where passives and ETFs are, I think we will reach a point where fee pressure will be commercial per mandate rather than structural per industry.

It's not going to become a 0 fee industry, but the industry has to prove its worth, which has been hard in the last few years. In a broadening market, in a market where opportunities are wider [Technical Difficulty] And where portfolios are more diversified, that will become much easier. That's why I'm confident.

The next question is from Jonas Dohlen from Deutsche Bank. Could you provide any color on the asset class mix of the GBP 18.3 billion Sanlam take-on? The reported AUM bridge gives flows by asset class, but the residual includes both Sanlam and market foreign exchange. From the reported mix, it looks potentially more fixed income multi-asset heavy than we had assumed. Is that fair? Or is it more of a function of market and FX movements by asset class?

Thank you,Varuni. Jonas, that is an astute observation. Absolutely correct and intentional. One of the attractions for us of the Sanlam acquisition or partnership was that it would shift our portfolio towards fixed income at a time when equity beta had worked hard for the business. And we thought we had the capacity to run much larger fixed income portfolios predominantly in South Africa. And so even though the fee is lower, this is a margin enhancer and a portfolio stabilizer. We -- I don't -- no one can call markets and maybe Elon Musk can do it better than all of us.

But -- what we do know is we're closer to markets being fully or overvalued equity markets than a year or 2 or 3 ago. And therefore, shifting -- adding weight on the fixed income end is probably not a bad thing to have in your portfolio. So this was intentional. And we think also we got some very good fixed income skills out of the Sanlam Investment Management team to support and strengthen the Ninety One team. So we're very excited about this part of the business.

I have 2 questions from [indiscernible] at Avior. I'll ask them in turn. The first is, it seems we had a slowdown in net flows in the second half 2026, especially from Asia Pacific, which you note includes the Middle East. Maybe some more color on that change in the trend.

Again, a correct observation. Two real drivers behind that. Firstly, the last 2 months of the year, things got a bit nervous and then the war started and people were holding back. But secondly, we had some equity down weights during the month -- during the final quarter. We also had -- which we talk about in the disclosed notes and in the annual report as well is the -- we had some pressure on South African multi-asset where we haven't performed as well as we should have. And we spoke about the changes we've made. And there, we had to endure some outflows along with the structural outflows of the SA pension business. Why?

Because in South Africa, people aren't creating jobs and therefore, pension funds and retirement funds are in aggregate in net outflow. So that slowed it down. What we expected, which didn't materialize is an acceleration in the allocations to international and emerging markets from the U.S. Why? When you -- that probably over Christmas is a bit slower and then you got the uncertain first quarter. We think that will actually reestablish itself after we've had the absorption of all these massive IPOs in the U.S. and the interest that they are creating.

What's happening on the side, though, is this a very interesting Asian explosion in equity, not only returns, but in interesting equity opportunities offer through the IPO boom in Hong Kong, through the entrepreneurial businesses available in Japan and Korea, Taiwan, and of course, the semiconductor boom and the related hardware boom that backs up the AI boom driven from largely the U.S. and China. So we think that will attract capital internationally and therefore, some of it will come via our funds.

So we think the environment will improve, but we had a tough period since Christmas, largely structural or largely -- or sorry, largely cyclical given market conditions, but also partly self-inflicted.

The second question from FC. Due to the fact that the bulk of the SIM assets came on board at the end of the year, how should we view the management fee basis points going forward?

I think Kim will guide on that. But just to be clear, she guided on the existing book of business and fees, excluding the impact of Sanlam. So we should actually the direction of travel, which is still kind of 1 to 2 basis points per annum structurally excludes any impact from Sanlam, and we've basically had the last 2 months of that. Is there anything more because I don't think we disclose or split the fees. We don't want to report fees by client. But Kim, if you would like to add to this, feel free.

Thank you, Hendrik. No, I will sit with what I'm saying. Largely, Sanlam was onboarded in the last 2 months. We have looked at the averaging and the impact as far as the additional Sanlam assets are concerned. We are now guiding with the 1 to 2 basis points, which will take us -- between 48 and 50. And that actually does include the Sanlam assets and the impact on those particular figures. So that's where we're guiding and what I referred to earlier.

Thank you, Kim. You meant 38 and 40.

Yes, 38 and 40. Thank you.

Is that correct?

Correct. Sorry, my apologies. 38 to 40.

Drives up the price of the share, which probably would be helpful, but not correct. Any other questions?

Yes. We have a few more. The next one is from [indiscernible]. This question was asked before, but in case you want to add any more color. Net flows were GBP 2.8 billion for the year, but with GBP 2.4 billion of that in the first half, second half flows were essentially flat. Can you give more color on what drove the H2 slowdown? Was it timing with mandates won but not yet funded? Or did redemptions and rebalancing offset the gross wins?

I gave -- Varuni, thank you. I gave that answer previously to [indiscernible]. I want to stick to the answer except to say, yes, there were 1 or 2 things which are taking longer, which we expect in this year. But I would say it was probably not a fair reflection, would probably have been GBP 1 billion net inflow in the second half versus over GBP 2 billion in the first half. That would have been a fair one. I felt a bit hard done by with a GBP 0.4 billion, but that's life. We don't just live reporting period to reporting period. But it was a bit of a disappointment for us as well.

The next question is from Marko Ras at Optimum Investment Group. Can you unpack the quality and sustainability of the GBP 2.8 billion net flows, especially given Asia Pacific was the largest contributor, while Africa and the U.K. still saw outflows. How much of the flow improvement is broad-based and repeatable versus a few large mandates or product-specific wins?

Thank you. I think given the market we play in, very large accounts can always have an impact, whether they just adjust their own portfolios. Often they adjust their portfolios, they have nothing against you. They simply change what they want to do or they have capital needs for better opportunities than the classes you provide.

So that's the first thing. We will always be subject to that. I would say that number is very well within our reach on an annual basis. We can't predict quarters and 6 monthly periods, but that's a very sustainable number, particularly given that I've guided a return to positive flows in the U.K., where we've suffered negative flows for a while. The final point is we can't predict demand for our specific offerings. For example, we just come out of a 5-year period where until a year ago, emerging markets were very unfashionable.

We continue to do what we have to do for our clients, and we're ready to take the flow as it comes, and we expect substantial flows. Quality investing was the rage, the bond proxies that people bought after the financial crisis, stable companies that didn't need bank finance. Well, what performed last year? Very expensive growth stocks, energy and financial banks. Those are not in the remit of those portfolios to buy. If clients take a truly long-term view when they have diversified portfolios, they'll stick and they'll measure us against other quality managers.

If they are momentum investors, which unfortunately big part of the market is, they may actually at the bottom sell out. And we've seen that the value managers, many of you on the call have experienced that over time where your performance is great over 20 years, but you tend to have the flows at unfortunate periods. At Ninety One, we can't guide for that. We have a diversified enough portfolio. We serve enough clients across the world that we will continue to survive, prosper and do okay, but those are factors that can affect flows. But I'm very comfortable that the number for last year is within our grasp within current conditions.

The next question is from [indiscernible] at Matrix. Some of it you've actually covered in your previous answer on fee pressure, but I'll read it out anyway in full. Congratulations on a strong set of results. Could you provide some color on the fee pressure you're seeing in the market? In your interim results, you noted that certain large-scale mandates were secured at lower fee margins, albeit with greater persistency. How are you thinking about this trade-off between pricing and the quality or durability of assets under management going forward?

So thank you, Varuni. [indiscernible], I just want to correct your question. We don't think the large mandates are necessarily more persistent. The relationships are persistent. Once you get into one of these very large, whether it's a sovereign wealth fund, whether it's a very large pension scheme or insurance company, you have jumped a whole lot of hurdles that competitors who are not in that system cannot jump fast. It takes years to take on these mandates.

So you have persistency in terms of the relationship with the institution, and that is exactly what Ninety One is doing. We are building long-term relationships with up to 400 asset owners and asset platforms worldwide. That's it. We think we have a fraction of the assets we can have out of those relationships. What we can't predict is how they move money and how they reallocate. Last year, we benefited from some of the -- particularly in the first half, big allocations. And then sometimes they downweight you. So they're not necessarily more persistent. I think actually the most persistent business is direct retail, but we don't do that.

Direct retail comes with all sorts of other things, compliance, cost. Expensive and many expensive administrative platforms, many people. We should have larger accounts, more assets under management per head, stable headcount in the future and expanding profit margin, but probably slightly more volatile earnings stream. But for us, the important thing is the relationship with the asset owner and the approval. And even if they fire you for short-term performance, they must still believe that you are competent enough to serve them later when conditions are better or when you do better again or when another skill set in your firm is attractive to them.

I think that's the business we try to build. So it's persistency of relationship, not persistency of mandate. And it comes with -- you want to win the mandate, you want to have a GBP 10 billion net year. Well, sometimes you've got to suffer the outflow when something is reallocated. But at least you're engaging with the market with money. And if I think about the Ninety One position having internationalized originally out of South Africa is we really wanted to go where the money is. And in that sense, we are very comfortable, and we just have to live with a rough and smooth in the second half of this year, we probably didn't have all the smooth in our favor.

But I hope the model is clearly explained to you.

We have 3 questions from Rahim Karim at Cavendish. I will ask them in turn. And I think this first question, you partially covered in your answer just now. But his question is, can we push you on the current conversations you have had with allocators and what the pipeline looks like across the business?

Rahim, you asked that question every year. And every year, I tell you, I can't tell you now that you're in Cavendish, you first at Investec when you asked it, now you're at Cavendish you still ask the question. I think the hint has been the fact that large asset owners are discussing international diversification very actively. This has been slowed down by the massive capital requirements in the U.S. given the IPO opportunities coming their way, but nevertheless, we believe will come. So it's positive. Secondly, and remember, Ninety One offers international services to North American clients, not domestic and of course, in regional strategies across the world. In the South African case, I think we're comfortable about a better flow picture. We are very confident that our multi-asset business will turn around. And we have access to a deeper and different distribution channels with Sanlam, where we expect some proper flows.

And then also in Asia, where there's a lot happening and where our numbers are really good, particularly the Greater China numbers or China numbers, we think money is going to start flowing that way. So we are quite optimistic, but not naively optimistic, and we're not signaling record years coming, but we can see money coming our way. The big important point is it's extremely competitive. You have to have your numbers, which is currently good in emerging markets needs to be right up there, and we're moving from a top half or top quartile industry to an industry where the top decile is rewarded with flow.

So that's more the challenge than whether there is business around. And we also believe that we -- that private markets, the mix of private markets is being -- or private markets are being seen for what they are, illiquid investments. And therefore, the desire for liquidity is growing, and therefore, public markets through passive, but also through appropriate active vehicles will become more attractive. And that's exactly what's happening now with the IPO boom. It's bringing people back to public markets. So in short, we are more positive than 2 years ago. We have to prove that we can get better than the first half of last year, but we have enough opportunity to chase and therefore, enough work to do and we have enough interest from clients.

The question is when.

Rahim's second question is, can you talk to how you expect the compensation ratio to evolve in the next year? You have historically suggested this might increase slightly if markets recover, given the cost control, which has taken place historically.

Rahim, I think we are focused on making sure that our key people are shareholders and are therefore well aligned. So even though we compensate people well, we will make sure that our compensation ratio also remains competitive in the market which prices our capital as well as the market for talent. So I don't see much change in that ratio in the year to come. But if anything, there will be a great deal of discipline and questions asked about how compensation is dished out and probably emphasis -- we want to emphasize an owner culture rather than an employee culture in our business.

Rahim's final question is, given the capital coverage, the expansion of the buyback program makes sense. Can I ask why GBP 55 million and not more?

Kim, what do you say. Kim is very tired.

Well, probably the right answer actually. I mean we are very conservative on our allocation. You'll note in the announcement that went out there, there's a GBP 55 million program, which expires at the AGM point later this year. We will continue to revisit it. So it's really a point in-time calculation and at the same time, being conservative of where we actually are from a capital perspective.

And Rahim, if they keep smashing the stock price like today, then we'll probably -- I'll motivate for buying more, but I have to get past the Finance Director.

We have a related question from Jonas Dohlen at Deutsche. Excluding compensation, how should we think about the business expense run rate into FY '27? The bridge points to the technology as the main driver of the increase. Is that recurring spend or more project platform investment with future efficiency benefits?

I think Kim has answered that already.

I think we could probably both answered it, to be honest. I think it's -- you're spot on, on your last point. There is an uptick in technology. In many ways, you will see the uptick in headcount as has picked up, which is caused by a number of factors, not least of one was the take on of Sanlam and the associated staff. Yes, there is an uptick you've seen in technology, and we are looking ahead, as I said earlier, of a continual increase in technology spend. However, yes, the plan is that this will reap the benefits of efficiency in the longer term. And it's something -- I mean, Hendrik referred to it, spend on some of the projects that we're undertaking within the business. So at this point, we are investing largely for the future, but we would like -- and we plan to see the efficiency and cost benefits in the future.

Just Varuni, for Jonas to comfort him, we have no large vanity projects to spend on, which will be either capitalized or have -- these are -- this is really ongoing improvement spend staying with the program, but we believe, as Kim says, that there will be eventual efficiencies and there should be.

The last 2 questions are from Piers Brown at Investec. I think you've answered the first one sufficiently, but I'll read it anyway, and then I'll also read you the second at the same time. So the first question, you mentioned markets have narrowed since March, but also that the pipeline is strong. Can you expand on the geographies and asset classes you are currently seeing most interest? And then the second question is, can you please elaborate on the foundry initiative? Are there concrete AUM opportunities from these initiatives? Or is it more about building expertise?

Thank you, Varuni. Piers, nice to hear from you. Let me just start with the last question first. The Foundry is about pushing the boundaries. It's about doing things you wouldn't do in the normal course of your business as a disciplined financial -- regulated financial firm. It's about thinking out of the box. So I highlighted 3 things. One is building in-region investment capability in some parts of the emerging market universe. The first project was the establishing a capability inside Saudi Arabia.

We've been -- we have raised the seed money for a credit fund in the Middle East region. And that we wouldn't have had if we weren't there. Now we have to build the business from there. But the notion is that you have a market there, which is GDP-wise multiples of South Africa. We've got a big business in South Africa with a young population, which will continue to save and where government will keep some assets in the domestic economy as opposed to the history when money was only -- always sent abroad. So there's a story there.

That is a little out of the normal practice of our big units, which run at certain -- with certain efficiency targets, et cetera. That's why we kept it there. The joint venture we have done in Asia with the growth and venture investor in order to get access and understand the pre-IPO pipeline is based on really on investing better rather than anything else, but also accessing the interesting technologies of the region, which is less understood in the West and applying that to our business. So we will come back.

And then digital finance is the way how finance is consumed as opposed to -- so it's not bitcoin and punting here on Donald Trumps latest cryptocurrency. This is actually about preparing Ninety One for a totally different way of financial services and investment consumption way beyond filling in a paper form for a mutual fund or trading ETF on an exchange. So it's very early-stage experimentation, but we think we could apply that, and there are some AUM targets linked to that, but obviously modest compared to the size of the overall Ninety One business. Varuni, I think the first question has been answered, but just if he's happy with that or send you a message.

[Technical Difficulty] has been answered in the previous because I thought so.

Thank you, Hendrik. We've just had one last question that's come in, again, from James Slabbert at SBGS. What are your thoughts on consolidation in the industry? Any view from your side on Ninety One as both an acquirer or potential target given share price decline would be appreciated.

James? Thank you very much for the question. I think Ninety One is not a typical M&A or acquisition-driven business. The Sanlam one was an extraordinary opportunity, which we took which is really building a relationship with a major distributor, whereas I don't think we will be out there buying smaller boutiques or companies. What we want to use our shares for is to make sure people are going to drive this business into the long term have adequate equity.

And I think that's much more important for us. And the other part way we deal outside the normal organic channel is to build partnerships with people who have already spent the capital -- the CapEx on the growth opportunity we want to pursue. For example, accessing the world's third largest ETF platform as a sub-investment manager is far better than building your own platform and all the complexities that go with that. So that's how you should see it going forward. We are tight on equity.

I wouldn't be stand here in a year or 2 in the future, I think you would see us -- and Kim quotes the number, what percentage was bought back since initial IPO, that number would be higher, not lower.

So we are capital considerate and we are capital conservative business and we -- but we will venture in terms of partnerships or in terms of talent acquisitions, which matter, but we are not typical goodwill buyers. So that's how you should see it. People have come and made offers to us in the past. they may come again, but we have really committed to the fact that we as an employee group and a team here as the directional shareholder of this firm want to build it for the long term, and we are driven by the income coming out of it, not about the capital gain.

So we don't really care where the market prices our share in any given day as long as our business is operating well because I think that creates the intergenerational business where people can really commit and devote the time. And that's why we have so many people who've been around for a long time and know what they're doing and who are appreciated by clients. And I think that's the model we are building. So slightly anti the AI world. We are building a business where people will enjoy working and hopefully engage with their clients properly, but they have to be efficient.

They have to be competent. They have to meet up to the standards of the industry. And that's our model. So as a third-party shareholder, you are therefore invited to participate in that well knowing we are not driven by either a bunch of deals or the fact that we will just trade the business if anybody comes and offers a small premium. But as fiduciaries of capital and as representatives of a wide group of shareholders, we obviously have to consider that when any offers are made. But for now, we are really driven to grow this business in a world which is changing fast, and we see significant benefit if we do our job well.

Varuni, I think we're done.

Yes. No further questions. No further questions.

Thank you very much, ladies and gentlemen. We really appreciate your time.

Any further questions, please come to our IR team, and we look forward to talking to you later in the year again at interims. Thank you.

Good morning, ladies and gentlemen. Welcome to the Ninety One interim results presentation for the half year to 30 September 2025. I will highlight the key numbers before moving to the business review. Kim McFarland, our Finance Director, will then present the financial review. I will then update you on recent developments and conclude before we take questions. Those of you participating through the webcast can submit questions during the presentations via the chat function at the bottom of your screen.

Assets under management rose more than 19% over the past year. Flows turned around strongly. We recorded net inflows of GBP 4.3 billion for this half year, resulting in adjusted earnings per share growing by 15%. This net inflow number consists of GBP 2.4 billion of organic inflows and GBP 1.9 billion that came from the Sanlam U.K. transaction. The dividend per share increased to 6p per share and operating margins expanded to 32.1%.

Staff shareholding grew to 32.7%. The people of Ninety One are fully aligned with all our other shareholders. I'm delighted to report that our business is growing again, in terms of revenues, earnings and assets under management. This is supported by investment returns and a significant turnaround in net inflows. We are sticking to our core strategy and investing in our existing growth drivers, while selectively backing new growth initiatives across our ecosystem.

Investment performance remains competitive. The Sanlam relationship is delivering, and Ninety One is poised for further growth. We always show the long-term track record of Ninety One to remind everyone that we are about growth over time and not growth all the time. The business has been built over many years in a patient and predominantly organic way. Markets have been supportive of late, but we are clear that sustaining growth over time takes focus, rigorous execution, discipline and belief.

We remain committed to our people-centric, capital-light and technology and AI-enabled business model. Market conditions have improved over the reporting period. The panic that followed Liberation Day is now history, and animal spirits are back supporting overall equity market levels. More interestingly, we are observing a new openness to diversification of institutional portfolios, which includes interest in emerging markets. This interest seems to be driven by the desire to diversify geographically as well as a recovery in relative returns.

Given the high concentration levels in indices, we are also witnessing a renewed interest in active strategies. A little over 1 year ago, I reported to you in a world in which active long-only and emerging markets across the capital structure would deeply out of favor. Therefore, Ninety One was experiencing a third consecutive year of hostile business conditions. I'm delighted to report that these conditions have improved substantially over the past year. Despite the strong performance from emerging markets and the rise in financial asset prices generally, we are some way off historic levels of demand at this stage.

As mentioned at the end of the previous reporting period, our industry continues to be extremely competitive. Clients are setting high standards and continue to be price sensitive. Fee pressure remains a challenge. It goes without saying that Ninety One is exposed to market levels and how financial assets are priced. A sharp decline in markets will affect revenue generation and new business volumes.

More generally, the Internet era is being replaced by the AI era. This touches every industry, including our own. At Ninety One, we are embracing this and look forward to reporting progress in more detail in due course. In summary, conditions have improved, while competition remains relentless in this industry. Equity markets have done well over the past 3 years with headline indices close to doubling. Over the past 6 months, our clients continued to benefit from strong performance. Emerging markets in general have outperformed developed markets and the strength in South Africa further contributed to our assets under management and driving these through the threshold of GBP 150 billion and $200 million, respectively.

In fixed income, we have also seen positive returns, even though developed market bonds have had a tough time. Ironically, this is where most of the inflows in our industry have been over the past few years. Emerging market bonds are doing much better, and we expect demand to grow in this space. This is an area in which Ninety One is one of the market leaders.

Since our listing, investors showed little interest in emerging markets. We're now seeing a decline in the active outflows in equities and an improvement in the environment for specifically active equities. For the second half year in a row, we're seeing positive active fixed income inflows. But as you can see, we are still well below the long-term demand levels for emerging markets. Judged by recent client engagements, we expect demand to pick up in due course. This assumes a world in which risk assets remain attractive.

The outflows that have been with us from 2022 have started to reverse in the second half of the 2025 financial year, and inflows have now accelerated into the first half of the 2026 financial year. In addition, we have added GBP 1.9 billion of Sanlam U.K. assets with the completion of the acquisition of Sanlam U.K. We also benefited from the strongest year since 2020 in terms of market and portfolio growth. We are mindful of the fact that markets do not usually go up in a straight line, and we remain vigilant on the cost front.

These slides show organic net flows, excluding the Sanlam take on. We had substantial equity inflows largely in our competitive global equity offerings, and positive flow in all asset classes, except multi-asset. This related to our own performance and general client demand. We have addressed the situation by bringing in new leadership and renewed focus on the multi-asset part of our business.

The majority of our client groups were positive for the half year given the pipeline. And given the pipeline, I'm hopeful that U.K. will show positive results for the full year and that South Africa will return to positive net flows for the second half as well. Investment performance has been solid over the period, and we can compete in the areas where we need to compete for net inflows. As always, a few strategies have done outstandingly well while there are also laggards. Overall, we have a competitive offering, which has the potential to generate ongoing net inflows and meet the high standards of our clients.

I now hand over to Kim McFarland, our Finance Director, to take you through the financial results. Thanks, Kim.

Thank you, Hendrik. I'm here to present a set of strong financial results for the period ended 30 September 2025. I would like to highlight that our core operating business has again produced a solid outcome. Management fees and adjusted operating expenses both increased by 3%, resulting in the core business recurring results increasing by 2% on the prior period to GBP 82 million.

Management fees were at GBP 290.7 million. This is as a result of the increase in average AUM from GBP 126.7 billion to GBP 139.7 billion, alongside a decline in the average management fee rate to 41.5 bps. More on this later, but worth noting that the increased closing AUM positions Ninety One's revenues well for the next 6 months.

Adjusted operating expenses of GBP 208.7 million includes the interest expense on the lease liabilities for our office premises and the full bonus accruals. It does exclude nonoperating costs. The business produced an adjusted operating profit of GBP 98.8 million, up 12% from the prior period. This increase is predominantly as a result of higher performance fees of GBP 4 million.

Other income is negligible and there's mainly a number of fair value adjustments on seed investments. There were FX losses as a result of the stronger GBP to USD in the period. So the adjusted operating profit margin increased from 30.5% to 32.1%. And at the finals for 2025, we reported an adjusted operating profit margin of 31.2%.

So let me explain further the decline in the average management fee rate. This is calculated as a monthly average and over the 6-month period has shown a slow decline. However, there was a market fall at the end of H1 2026, which we have analyzed. During the period, daily average AUM upon which the management fees are generated, consistently lagged monthly average AUM upon which the average management fee rate is calculated due to the manner in which markets moved markedly during the period. And this effectively overstated the average management fee rate decline by an estimate 0.8 bps.

Calculated on a daily averaging basis, the actual daily average rate is closer to 42.3 bps. So closer to a fall in 1 bp over the 6-month period, which is higher than our historic guidance. There were further factors that are impacted on the fee rate in the period, which were a significant AUM increase in lower-than-average fee rate clients. The Sanlam U.K. take on being an example, although this impact was small. However, the take on of large mandates at lower-than-average fee rates has and will have a material impact on our management fee rate, an AUM decrease for higher than average fee rate clients. The U.K. OEIC being an example, and this would have had an estimate 0.5 bp negative impact. And at the same time, there were some downward fee adjustments for existing clients who generally compensated with additional assets.

Ninety One's profit before tax after considering the list of nonoperating adjustments, adjusting net -- adjusted net interest income, the small share scheme, net expense, corporate-related professional fees and now the amortization of the intangible asset as a result of the U.K. Sanlam transaction increased by 10% to GBP 102.2 million.

At the interim, the share scheme is generally a net expense. And this is largely reflecting the amortization impact from prior year credits where staff bonuses were allocated to Ninety One shares. At the year-end, we have a better understanding of the share scheme and the allocation of annual staff bonuses to Ninety One shares. Remember, we fully expensed the bonus payments within adjusted operating expenses, irrespective of how settled. IFRS requires the amortization of bonus-related share awards over 4 years, which is then included in the share scheme expense.

The effective tax rate for the year was 25%, down from 26.3% in the prior period, and this was driven by higher earnings in lower tax jurisdictions. And in the prior period, there were a larger number of nondeductible expenses. So the above factors resulted in a profit after tax of GBP 76.7 million, up 11% from the prior period.

And our adjusted EPS shows a 15% increase to 8.4p, more than the increase of adjusted operating profit of 12% due to the lower effective tax rate on the adjusted operating profit and a lower number of ordinary shares for the calculation of adjusted EPS. So this analysis summarizes the absolute movement in adjusted operating profit from H1 2025 to H1 2026. It clearly shows that management fees, performance fees and other income increased. These increases were partially offset by the increase in employee remuneration, but noting business expenses were actually lower by GBP 2.7 million than the prior period.

This is the analysis of the movement in adjusted operating expenses. Adjusted operating expenses increased by 3% to GBP 208.7 million. Employee remuneration represented 64% of the total expense base. In the prior period, it was 62%, and increased by GBP 9.5 million to GBP 134.1 million. This was driven by an increase in fixed remuneration consistent with the increase in head count and annual inflation increases as well as an increase in variable remuneration in line with increased adjusted operating profit.

Over 50% of employee remuneration remains variable and the resulting compensation ratio was 43.6%, up from 42.9% in the prior period. Business expenses decreased by 3% to GBP 74.6 million. We began to analyze the cost changes, at a high level, we've broken this down -- the movement down as follows: inflation-linked increases of GBP 1.4 million for those costs that are impacted by inflation. FX-linked impact was negative GBP 2 million. And there's been a pickup in technology spend of GBP 1.7 million, with other costs then decreasing by GBP 2.8 million. Technology now is the largest business expense. Previously, it was third-party administration.

Looking ahead, we're expecting business expenses to be impacted by inflation, ongoing technology spend and the move into the new offices in Cape Town planned for January 2026. Post the Sanlam integration in South Africa, there will be a cost impact, which will be predominantly headcount driven. So increases to employee remuneration as well as the resulting general operating costs. This is showing the business expenses and total expenses as a percentage of average AUM in basis points over a 5.5-year period.

The adjusted operating profit margin over the period is also reflected here. Irrespective of the movement in AUM, business expenses have marginally decreased over the period, even noting the continual investments in our core technology system. Total expenses as a percentage of average AUM hav,e, in fact, declined aided by the growth in the denominator. The adjusted operating profit margin has remained in the range of 31% to 35%, reflecting ongoing cost management with the underlying AUM growth.

Ninety One's qualifying capital was GBP 316.3 million at the end of September 2025. In line with our dividend policy, the Board has proposed an interim dividend of 6p, this is an increase of 11%. After this dividend payment, there will be an estimated capital surplus of GBP 155.3 million. This will result in a capital coverage of 245%.

During the period, we continued with our buybacks, and this resulted in another return of capital of GBP 20.4 million and a reduction of 14.1 million shares. We did, however, issued GBP 13.7 million of plc shares for the U.K. Sanlam transaction in the period. In line with our capital-light model, since listing over 5.5 years ago, we have returned close to 60% of our initial market capitalization to shareholders.

So a few updates regarding the Sanlam transaction. All regulatory approvals have now been secured. The U.K. transaction completed on the 16th of June 2025, with the result of GBP 1.9 billion of AUM on boarded and Ninety One plc issuing 13.7 million shares. It's planned for the SA transaction to be completed by the end of the financial year, which results in expected total onboarded AUM of circa GBP 17 billion and revenue in line with what we previously reported. An additional 112 million shares will be issued when the SA transaction closes.

Now reviewing the position for H1 2026. The adjusted EPS and operating margin were accretive. There was a slight dilution on the average fee rate, which I mentioned earlier. And also, as previously mentioned, we will be waiting the shares issued to Sanlam for the determination of the adjusted EPS for the interim and then for the final 2026 results. For the interest, this looks as follows. So shares in issue, excluding Sanlam U.K. is GBP 882.7 million, weighting of shares issued for the Sanlam U.K. is 13.7 million times by 107, the days since the transaction in the period, divided by 183, so the days in the total period, which gives you 8 million shares. So shares in issue for adjusted EPS calculation is 890.7 million. The actual number of shares and issue at end of September 2025 was 896.4 million.

The intangible assets arising on the balance sheet for the Sanlam transaction will be amortized over 15 years. To note, this is tax deductible in the U.K. but not in South Africa.

And so on that final technical point, I will now hand you back to Hendrik.

Thank you, Kim. At Ninety One, we think long term and our commitment to our strategic pillars do not preclude us from constant improvement and development of our firm. Over the period, we've continued to invest in talent. We've broadened the top leadership team and evolved accountability throughout our firm. We ensured that our 3 core opportunities international public markets, Southern Africa and private markets are adequately resourced to compete effectively as market-facing units, supported by our 3 pillars of investments, client group and operations.

And so as we go into the second half of the year, we have formed a dedicated international public markets team, which can focus on the commercial opportunity for a recovery in demand for active investment management especially in international and emerging market strategies. We have a focused and strong Southern African team to take a market-leading business to an entirely new level.

Finally, we've reinforced our private markets team with fresh talent and additional senior leadership and asked them to accelerate progress in this growth market. We are backing new growth opportunities out of the recently established Ninety One Foundry. These include in-region presence and partnerships in key emerging markets, allowing us to become domestic competitors in certain regions and deepen our investment insight in these fast-evolving markets. For example, we opened 2 offices in the Middle East in the previous reporting period. We have now put additional resources in, and we are building an on-the-ground domestic business in the Kingdom of Saudi Arabia, which includes a strong investment presence.

In Asia, we're developing an exciting joint venture with a Singapore-based alternative investment firm with deep experience and relationships in the region and in particularly China. This will strengthen our investment capabilities in the region as well as positioning us to compete more effectively for capital flowing out of the region. We have established a digital finance unit with dedicated leadership to provide clients in certain markets with a far better experience than they traditionally have received from asset management firms.

We've committed substantial resources to AI-related innovation which we will update you on further at the end of the year. I must stress that these developments are fully expensed through the cost line and are not consuming significant additional capital. Over the reporting period, we've made meaningful progress on the technology front, which includes a major systems migration. Now that this has been fully completed, significant resources have been freed up for further enhancements and innovation.

These are the additional 3 areas of growth we're pursuing, which we believe will impact the way we run our business in years to come. What we're really trying to do is from strong foundations, build the active investment manager of the future. To become the active manager of the future, AI is key. At Ninety One, we approach AI on 3 levels: advocate, equip and use. So this is how we rate ourselves. We see quite high levels of adoption, we see reasonable levels of experimentation given the widely available AI tools to all our staff members, sort of 6 out of 10. Then our people have embraced it, and we are working hard to get our proprietary data organized for the effective deployment of AI across the firm.

The proof of the pudding is in the transformational impact of AI. We have much to do on this front. The business is stronger than it was in the previous reporting period, supported by better business conditions and recovering demand. We plan to improve and modernize our business through disciplined investments in and adjacent to our core activities and markets. Emerging markets and the search for diversification are coming back into favor, which supports us.

Active investing has a role to play in this world particularly within emerging markets and in the global equity opportunity set. The strategic clarity and simplicity of our business model enables us to seize the opportunity with pace and strength. In short, we see renewed opportunity for growth. Thank you very much. We can now move on to Q&A. We will take questions in the room first, and then will watch -- then we'll take questions from webcast viewers. [Operator Instructions]

I think Angeliki, you had the hand up right in the beginning, so.

This is Angeliki Bairaktari from JPMorgan. So your flows were much stronger than the previous semester, GBP 2.4 billion. And we -- you say in your presentation that you feel that active is back. Can you perhaps give us a little bit more color with regards to where you see that strength coming from I think you had APAC, Middle East and also equities. But if you can just give us a little bit more color on the pipeline that you're seeing for the next 6 to 12 months where you see the strength coming from? And that's my first question.

And then maybe on the management fee margin outlook. There's a lot of moving parts there, relative to my expectations, the management fee margin followed more. I think we still have some dilutive impact to come from Sanlam once the further AUM gets onboarded on the platform. So how should we think about the run rate, management fee rate for next year perhaps?

I think you've asked the real questions that we all need answers for. So I can give you color on what we see rather than a prediction, Angeliki. So firstly, the -- if I can go to the flow or the pipeline that we see. Firstly, the result is again emphasizing the strength of our diversity. We source capital from the same kind of client but in different regions around the world. They have slightly different perceptions on risk and on willingness to take risk at a point in time. And that's why we've seen equity up weightings from large clients in Asia. And that's really where we've seen it.

In the rest of the world, particularly North America, where we've delivered some positive, we are seeing a significant search activity or investigating activity's about how to diversify's their portfolios. That flood's gate has not yet opened. We expect that given the sense that markets normalize over time, and we've come out of a long period of underperformance for the rest of the world relative to the U.S. And we know these things go into 10, 15-year cycles. There's a very good paper on our website about dollar cycles and dollar cycles and international investments seem to be highly correlated. You can go and read that.

So -- but what we have seen in the last 6 months picking up from the previous 6 months, not the year ago, but the preceding half year is an intensity or intensification of client and search a client engagement and, call it, presearch engagement. What, of course, can change the flow picture is whether we, in this very competitive world win in the very final stage. I mean an example in the last 6 months, and it really hurts me to say it. But after eliminating all competitors, we came second for a sort of close to $5 billion mandate, one client that would have made this figure look a lot better. And so we are driven, and I think you should understand it Ninety One deals in the upper end of the institutional market. Small numbers of clients make a big difference.

The fee on that depends on where they're already engaging with that client at scale, and therefore, the client gets a better deal and we price persistency as well. So clients that are persistent, and this is not price cutting, but clients that are persistent have proven themselves to be persistent over time, get a better deal than those who rent your capacity. And so sometimes, we would not do a deal, which we could do and create great inflows to make all of you happy because we know this client is a capacity renter. And they'll come for 3 years and then cause a problem for us when they go out again, whereas others deserve the respect of a value-for-money deal plus scale benefit.

So it's very, very difficult to predict where we are. I think we still, with our underlying guidance of market fee pressure is around -- and I still think it's around the 1 where we are is 50% of our growth typically when we're in growth cycles is upweighting from existing clients, 50% is new. If those existing clients are the big ones, your fee goes lower, if they come from general market, mutual fund market, et cetera, your fees are a bit better. But I think over time, Ninety One is moving towards and increasingly institutional. So the breakdown in the addendum to the slide pack, the appendix where we show institutional versus adviser actually, we are trending towards a much more institutional business. And even in South Africa, where we have a strong advisory business, those advisory firms are getting bigger and bigger and behaving more like institutional multi-manager.

So I think -- we're going through that lowering a fee process but hiring of what increasing of volume and therefore, increase operating margin but not necessarily on a fee basis. So I think the 1% we guide to is still the underlying fee compression in our industry. We might as of late, be hit by something a little more or less, but it depends. And it also depends on the growth of the alternatives business because that is a still and where I see the real fee pressure in our industry is actually on the alternatives business. I don't think the 2 and 20 models are going to hold because if clients look at their fee budgets, this is where. So what they're currently doing, just an interesting thing in private equity, private credit, et cetera. They pay the full fee, but then they do a deal on the side to co-invest for nothing. So what is the real effective fee of providing those services and your capabilities to a client for free.

So I think about -- it would be a really interesting work -- a piece of work for you to do when you look at that side. So I think that's where the fee pressure is more than in ours, but we are preparing for a world where we have to be at least 1 basis point more efficient every year. And I can't tell you whether we're going to be at 40. Right now, I'll -- Kim, I think you've got the answer. We're running at a slightly higher fee level, maybe you can add here for me, then actually the number shown there.

Yes. Well, I kind of explained that in my sort of daily -- I think I did that on the call this morning actually as well on the sort of daily, monthly factor. But I think you're sort of -- you're asking the question about looking ahead. And Hendrik is right, we are seeing pressure on the fees, both. You've got the standard 1 bp a year that we advise on. But when you're looking at both new mandates, but actually more so existing client mandates that are coming on board at lower rates and then giving us the asset to compensate. So hence, we're seeing the pickup in the AUM, but they are often negotiating at lower fee rates. So this is why we're definitely seeing more fee pressure.

But for us, it is -- the value lies in embedding those relationships for the long term. And if you can do that, you have a higher-quality business. But what we're not doing is price-cutting to win volume. We don't going out there saying, "Hey, we're cheap". But this -- and I still believe, this market will settle down when nominal interest rates are on the rise again because actually, it's hard for a treasurer or someone to sign a check, when he earns it out of interest, it's easier.

So I think there's a -- there is a link, which one day will prove statistically, but we can't give you an exact number now. The next step on the pipeline, we're seeing substantial opportunities against scale ones, so there won't be fee level enhancing ones, they'll probably be roughly where we are for the rest of the year that we should convert. What we don't know is where the unexpected redemptions or changes in strategy can happen with the client. And that's the problem when you deal with these large clients. They get a new CIO, they get staff changes and a new strategy comes in, you're being seen as okay, but not necessarily central to the strategy. So -- but I'm fairly comfortable that the visibility of the pipeline is better than it's been in recent reporting periods.

Jonas Dohlen here from Deutsche Bank. Just one follow-up.

Yes, just one follow-up on the fee margin. I was just wondering if that guidance now includes the Sanlam or if that's still on kind of the legacy assets on that 1 basis point...

Sanlam is lower because it's a $20 billion deal. So it's lower, and it's largely fixed income assets.

Yes. But on a group level, you expect 1 basis point...

Yes, on an organic basis. So there's an organic basis and then there's the Sanlam transaction. And what I'm saying, the 1 basis point is the market pressure. If we were to ex Sanlam or if we were to get a big up weighting from a sovereign wealth fund where we already have a premium deal because they've got billions and billions with us, it's probably going to be below that fee level. If we win 500 million mandate chunks, it will be at or around or above that fee level. You see. So that's why I'm saying the market -- the institutional market pressure is roughly 100 basis -- or 100 basis points per year. The -- sorry, 1 basis point per year excuse me. 1 basis point per year. But the -- for us, Sanlam is a separate transaction and then obviously hugely accretive from a profitability point of view, and it depends then what kind of flow we get.

Great. And then just on the tax rate as well. I think you mentioned...

I don't understand...

25%.

25%. Correct.

Being a reasonable number to go forward. I'm just wondering how to kind of square that circle. I mean you have a higher tax rate in South Africa, and that amortization part not being tax deductible as well?

But we have tax in many other jurisdictions as well. So it's linking up the 2 of it. And -- you're right. When I'm looking at it, I'm looking for the next 6 months and the South African impact is only -- it's going to be in the results for a couple of months next year. I think looking ahead with the nondeductibility of the amortization piece, it will tick up a bit.

Piers, you'll come back in new uniform.

Yes. Indeed, yes, it's Piers Brown from Investec.

Very good.

So very happy about that. I might be greedy and actually, go for 3 questions. So the first one, yes, just back on to the fee rate conversations. So I guess, if you look at this from the perspective of the operating margin, you're -- I mean you printed 32%, which looks very good for the first half. If I take out the performance fees, you -- which I know is a slightly dubious calculation, but it looks like you're maybe sub-30%. But the question would be just on the fee rate outlook, do you think 30% is still the level you can protect?

I think you have to compensate higher average assets under management, that compensates a bit because remember, the markets had a run close to the end, there was Liberation Day down than up. So your average AUM doesn't reflect your actual AUM. And you've got to look at where the sterling is strong or weak, which then deflates a big cost base. So I'm more comfortable than you. But you are right, there's -- the core revenues have not grown as much as they should have. So we don't run to a target actually. And therefore, it's not something we monitor daily. But I'm not at this stage, I'm comfortable that we're going to come back to you with a 25% operating margin, put it that way.

I think that's too right. I think you've also got to recognize the fact that we're taking on the Sanlam assets, as I said, next year at a low cost.

And I would remind everybody, we've bought I know we call the GBP 1.9 billion acquired growth, but we bought back those shares already. So if you think about it, it's just a mandate win, the big one is going to take a bit longer, but if we can do that, if we have the cash flows, then you know what, it's actually akin to an organic transaction.

Okay. Second one is just on the composition of flows. And sort of relating this into Sanlam, but I mean you've had GBP 1.3 billion of Africa outflows, offset by very strong inflows in Asia Pac. Is there anything in the Africa performance, which is maybe impacted by clients reallocating in advance of Sanlam or...

No, no, it's not Sanlam. It's the -- South Africa is actually a very competitive market, and it's very transparent. When you know exactly what each competitor is doing and your cousin or your kid works at the competitor, you literally know what goes on. And so we had some performance pressure in 1 or 2 strategies, which didn't get -- the market goes quickly, moves quickly against you.

We've had the back end of the so-called 2-pot system, which means money was released out of the pension system, where if you're a large provider, you have to suffer that. That is now gone. So that structural bit has left. And then, of course, there was the back end of the internationalization of the SA equity or SA investment market because the exchange controls were relaxed for international opportunities opened up for retirement funds. The Minister gave a big -- a few years -- 2 years ago, a big -- there was a big change in the -- what they call Regulation 28. And that means they could invest more. So there was a structural flow abroad.

Typically, to new competitors rather than to someone already has a high wallet share with a client because it just makes sense for those clients. And actually, international passive was a big winner there where we don't compete. So I think those 2 forces are over, think on our investment side, we have all intends -- we intend to be very competitive, and we have recovered quite a lot in terms of competitiveness. So I think on all 3 factors, we're stronger in the second half than the first, but it is one of those markets where if you have a big share and you're not absolutely on top of it, the competitors come after you and we've got some very good competitors in that market.

Okay. Perfect. And just maybe a last one on capital. So 245% capital coverage ratio. I think you've sort of indicated 200% in the past is where you'd like to be. It doesn't feel like there's an awful lot of need for seed capital for some of the new initiatives. So the obvious question is, would you look to move closer to the [ 200% ]?

We will -- I mean, as you noted, we've continued with buybacks in the actual period. We will continue to look for opportunities to use additional seed capital for buybacks when we're comfortable with the price, and obviously in agreement with the Board.

If pricing is reasonable, we think reducing the denominator is always better than just paying out the cash. But we must look at where the market goes. And who knows, there may be opportunities.

Any other questions? Investing definitely add value for money, you'll get your dividend. Varuni, are there any of online questions.

Yes. There are a few. First one is from Brian Thomas at Laurium Capital. Are you able to comment on the buyback program that was suspended during the half? Are there any metrics that you take into account in determining when you buy back stock that we should be mindful of?

Before we answer that, there's -- Kim just reminds me, there is one thing in the Africa side. There was a 1 single client sort of -- and many clients pay out and eventually but reallocated away from us as well. So you should sort of have the impact of that number. And that's why I'm quite confident that it can turn around.

Sorry, on the buyback, yes, we carefully -- we carefully look at value and value in the context of the industry and the context of what we see ahead because the one downside with buying back is if you overpay for your own stock. And therefore, it's always a consideration and a discussion with the Board. It's not an automatic buyback process. And -- but our industry has been so extremely -- I actually had benefit of last week in Paris when I went to watch the Rugby and I have to remind, I know the French listeners, it was a wonderful moment for South Africa and Paris.

But in spite of referee against us, we're still -- but I actually went to watch the Rugby with someone who used to be one of the top financial analysts in the market about 25 years ago -- 20 years ago. And he's gone to private equity. He hadn't looked at valuations of asset managers. He was -- it's a bit like talking to someone who fell asleep 25 years ago because he was completely mind boggled by the relative valuation of asset managers against other financial firms particularly wealth today because in his time, it was exactly the opposite. We were the 20 multiple shops and the others were single digit.

So I think broad -- and that reminded me again, that these cash flows, quality cash flows are still, in my opinion, or at least in our opinion, fairly cheap, which is why we have also been acquiring stock slowly and as a management team because we think the market is not appreciating the quality of the cash flows we generate. And so even though they don't -- may not grow as much organically there could be -- and there has been a re-rating of late. Now if the re-rating is too much, we will obviously step away. But our industry is still structurally very cheap compared to other cash flows of similar quality. I mean just close your eyes, 30%-plus operating margins is that's tech. Okay, what do you pay for tech? Palantir last when I looked at 185 PE multiple. So it's very different. And it's in that context that we think rather than in short 1 month, 1 week, 1 quarter valuation cycles. But there is a proper process, which Kim can talk to you about when she reports it again. Do you want to add something, Kim?

Yes, that's fine.

Any other questions?

Yes. Next question, Murray Winckler from Laurium again. Congratulations on returning to net inflows for the business. Headcount increased by 8%, which seems high. What should we expect going forward?

Murray, well to done to you, by the way. You're one of those guys stealing business. We will have to come take it back. Just I mean that is one of the big questions. Can we get to a bigger -- a real efficiency for our business? That's about the digitization and the technology investment. But we should also remember that there was some preparation for -- although we're not taking on many people from Sanlam, there's a significant preparation for taking on a book of that size that -- and then there's also the improvement of our communication with end clients, which we had to invest in to make sure it's there. And again, technology over time will make that a lot easier but it was really important, and we've had challenges on -- with South Africa being on the gray list. We've had real challenges on dealing with our international funds into South Africa and our service capability had to just be much sharper, much better equipped to deal with it.

And then we've also been building the private markets business, which is much more -- actually much more human intensive than certain public markets investment businesses. And that's about the reasons. I don't know Kim, are there any other ones that you pick up and you want to...

I think that's right. I think the pickup in a lot of op staff on the IP platform in South Africa. Likewise, on the Sanlam. A lot of them are actually long-term contractors at this stage because I see it as a temporary thing. So I think the sort of more permanent headcount growth has been in private markets and within the actual business. So I think the question is what are we thinking about it looking forward? I'm not seeing an 8%. I wouldn't be looking at an 8% increase in headcount going forward, I think, would be my answer.

And I think with a better use of technology, we could run the same quality service, leaner, that includes client acquisition, client service, investment processes, but it's very important to do these things very slowly over time. I'm not as bold as the big banks that say that they will run -- I mean, 2 of the big bank CEOs in Global Bank CEOs confirmed to me that they'll double their business over the next 5 years with the same staff levels. That has to be seen whether that's going to realize, but those are ambitious goals.

I think we should have similar goals, but it's early stage saying it because the promise and the layer of technology is always there and then the delivery is slightly behind. And we've -- those of us who have worked in the markets a long time have realized that. But definitely don't budget for a 8% staff increase, Murray. That's not going to happen.

Next question from Jaime Gomes, Laurium Capital. Can you please explain the expected total onboarded AUM from Sanlam remaining the same as what it was this time last year, circa GBP 17 billion. Has the book experienced some outflows given the strong market performance over the last 12 months?

The book is roughly -- it's the same number. There might be a little benefit rand to sterling exchange. So it might be a little more in sterling. But remember, it's a very fixed income, heavy book. There are also -- there could be a few wins associated as well, but we first got to deliver them. So we're very comfortable that the numbers will reflect what we told the market at least.

Next question from Hubert Lam. Can you give us an update on the alternatives business and new initiatives, including private credit? And he has a second question, which is, how should we think about further investments you need to make in AI and tech and what that means for your cost base?

Hubert, nice to get a question from you. I know you have another meeting, so you're not here in person. I would say that my simple answer is private markets are hard. And I'm so glad we didn't buy an overpriced boutique to grow, which then doesn't grow, okay? Because the top guys dominate they've got such a strangle hold. And so that's my one point.

I think we found niches which we can live in and defend and grow. And what we have actually done is put some of our -- to make sure they get the full support of the firm, put some of our top leadership very close to the private markets guys and they support them to get through and we build it around and particularly around our emerging markets positioning. Now what we know is the emerging markets haven't had huge flows as such. We think there will be appetite and there will be appetite coming. We modest net inflow have been consistently in that space. But we are building through our cost line, and it's fully reflected in our cost line, we are building capability to be actually -- to be fully competitive in our various areas.

And I think our focus is private credit. And private credit and transition credit, and that is very clear, and we have built a market name and position there. So we would expect accelerating flows to follow. But those businesses take -- will take a while to impact -- to truly impact on the bigger Ninety One bottom line. If you model us, model us largely as a long-only business, long-only active business because that's still very dominant in terms of revenues and flows.

Cost.

And yes, but private market is costly to build. It's high fee, but costly, whereas public markets could be done very efficiently with slightly lower fee, and that's the sort of trade-off between the businesses. But we do see the merger. And so the partnership we announced in the joint venture we announced with in -- with the Singapore based, which we are about to announce because we'll probably -- will probably sign in the next few days, and that's why we haven't been long on detail because anything still -- things have to be -- until they're fully signed, you don't want to talk too much. But there, we have -- we're talking to a business which does long short and crossover between public and private.

Now I think these universes are getting closer, and one just has to make sure you understand what happens to the other side of the liquidity fence rather than just staying in the curated even if you want to be a very good long-only business staying in the highly curated screen-based long-only part of life. You've actually got to get -- understand what entrepreneurs are doing and what's happening in the ever longer pre-IPO pipeline because we do know a lot more happens on that side of the fence now from venture right through to growth.

And I think that's important for us. But as these things emerge, who knows what product constructs will look like, who knows what client appetite will look like. Clients today are still very organized in boxes between the so-called alternatives units, which is now quite frankly, mainstream and active long only, which is becoming increasingly alternative and passive. So they've got their different boxes. But as they start looking at the total portfolio approach, who knows how they are going to buy and that's what we need to be prepared for.

And I think the question on uptick in technology spend or AI spend, which was the other one, I think Hendrik mentioned the fact that our big technology replatforming exercise did complete early this year. So those costs are now -- and the ongoing cost of that are actually largely built into our figures. AI has largely been a part of our operating cost line. So the gain, how you should think about it is really a continuation of what our cost base is right now.

Yes. And we absorb in what is available or what can be bought. We don't go to bleeding edge development. The big thing is getting your data organized. And I mean it's been with -- that data story has been with me ever since I've been in this firm. Everyone said we have to organize our data better. But you can get so much more value if you are properly digitized as digital middle business models are showing, it is not trivial and that easy. But as a midsized business, if we can't get it right, nobody can get it right. So -- but we're spending resource and effort on it to make sure we can extract maximum value given the enhancements of the available tools. And they are genuinely moving very fast.

And I think 5 years from now, we will be in an entirely different world, and we need to be ready for it.

Any other questions, Varuni?

Yes, a couple. We have a couple of questions on buybacks. The first one from James Slabbert from Standard Bank. There was a slide on the existing capital stack in the business, would it be aggressive to model for annual buybacks far in excess of earnings remaining after the payout of dividends. I think you've touched on that. But -- so by modeling for buybacks in excess of earnings. And then whilst we're on buybacks, a question from Keenon Choonoo from Investec. Is there a preference between Ninety One Limited or PLCs when considering buybacks?

So we look at both the plc and the limited lines as far as buybacks are concerned. In fact, we look at even PLCs on the JSE line when we look at buybacks. So we look at all three because there sometimes is a variation in price. So we look at all 3 -- effectively 3 lines, although there's obviously 2 shares to answer that question. As far as buybacks to ceding earnings, we look at buybacks from a capital position. So we -- it comes back to the question asked earlier by peers, you aim for a 200% capital position. We're in excess of that. So I'm rather looking at my capital position, understanding, yes, is there any seed? Is there any regulatory requirements. As you mentioned, there's not an awful lot of that at the moment, but we take that into consideration and at the same time, then look at opportunities for buyback based on surplus capital that we're holding on the balance sheet.

Yes. But we -- what we don't do is this is a highly operationally leveraged business. It will only be an extreme that we will leverage the business. You remember, this is what sticks out asset managers. They go on leverage and then they get the fall in assets under management. They get outflows and the debt stays the same and the equity gets wiped out. So we will be very, very careful to ever go beyond what we can do out of our ongoing earnings or surplus capital.

Some other industries, people get very brave. I think, yes, this is probably one of the reasons why we haven't bought the firm from the market yet, okay, because you don't leverage these businesses. .

Another question from James Slabbert for clarity on the 1 basis point fee margin compression. Would you apply that to the current fee rates that H1 2026 or the FY '25, so the year-end?

I think we've already done this year, we've already done it. I mean we doubled it. So we think we could have a -- we're not 100% sure, but we could have a far lower decline in the second half, just given what's happened in flow dynamics, excluding the Sanlam. But -- and it's really a gut feel here. But that 100 basis points feels like the underlying trend in the market, not necessarily ours. And James, I wish we can't even forecast it to our Board where we're going to be -- it's very -- you've got a very hard job at doing that. I don't know whether Kim can give you any more wisdom except to say the trend is not up.

Well, I think you're right. I think you're going to look at the most recent fee rate. And if it's in the half year, so you're taking half or 0.5 based on the most recent fee rate, but then you have to take into consideration, as we mentioned, the Sanlam assets coming on board, which will have a further impact and should we take on any large new mandates in the period. If we see those flows, there's likely to be further fee erosion, hopefully not, but there's likelihood.

You see -- especially when you do the relationship deals, with a large insurance company or something like that. And they are genuinely sensitive because it hits their profit, but they can give you assurance about commitment, timing, i.e., embedded value or present value of the deal, that's different from when you get in the normal distributed pension market OCIOs most -- many of them are in -- or multi managers are different because you're not going to compete on price there at all.

So it depends where the flow comes from. What we haven't seen, and I think that's the bit you should understand. We haven't seen the sort of -- I've hinted that there are opportunities to grow. But the good times aren't back yet. When you get into the good times and clients want to deploy fast and -- they just want to get the money out there. Then price sensitivity tends to take a backseat. At the moment, they have lots of time to deploy. They're thinking multiyear. They're not chasing markets.

I think if you get up severe underperformance or you get -- and I don't think we're going to see it immediately, but if you get a big correction in the dollar, then that changes life. And that's the positive for us. But I don't want you to model that.

Last question from Herman [ Van Veltsa]. Do new clients favor fixed fees? Or do they tend to opt for performance fees?

Herman, nice to hear from you again. Another old campaign. I wish clients wanted to give more performance fees because the way you could resolve this constant fee bickering and say, come on, pay us afterwards, pay us properly. But Interestingly, clients have typically been burned by performance fees because they end up paying more. And so they're reluctant to do that. They're also reluctant to go to the -- I mean, in mutual funds, where it's quite prevalent in South Africa, it's not actually encouraged in the rest of the world. ETFs are very difficult. You can't really do -- it's difficult to do, whereas institutional owners don't want to go and pay the big check and ask their Board to pay a large check to a manager unless it's in the alternative bucket.

Now again, if those buckets fade and different kind of people contract with us, we could possibly push more performance fees. We think it's a way to align well, although buy-side analysts or sell-side analysts would say it's lower quality of earnings. But I think we could make more profit. They're very happy to do that when they buy Millennium or Citadel. But for some reason, there is a reluctance in our space because that's just what it is. So we would be quite open because we know, over time, 80% of our offerings beat the benchmark. So it's in our favor. But -- it's not the reality today. So I wouldn't model for much bigger performance fee component in our business. I'd roughly keep it similar, noting that a period of good performance, we will own more performance fees.

Thank you very much. Thank you very much, and I'll see you after second half, and I hope the positive -- the positive hence, have realized, but it's up to the market. Thank you.

Thank you.

Thank you very much, guys.