VEF Stock

Thank you. Good day and thank you for standing by. Welcome to the VEF Third Quarter 2026 Earnings Conference Call and Webcast. [Operator Instructions] Please be advised that this conference is being recorded.

I would now like to hand the conference over to our speaker today, David Nangle, CEO. Please go ahead.

Yes, thanks, Najah. Good morning from New York, everybody, and good afternoon to all our followers in European time zone. Welcome to our Q3 results conference call. I'm joined, as always, by our CIO, Alexis Koumoudos, and we'll spend the next 20 to 30 minutes running you through the highlights of the quarter, as well as taking all the questions you have. Moving on to slide 2 of the webcast and the slide deck that's available online. Key events of the quarter. I put four key events here, and these lie below the headline NAV which is flattish for the quarter and flattish year to date. It really gets into the portfolio and then capital allocation.

One, obviously our biggest holding, it continues to compound, and it's compounding at an increased velocity. We're now doing 26% year-on-year on the loan growth side and 30% year-on-year on the revenue growth side. Then below the top line, we're getting a nice level of AI-led operational efficiency, and it's becoming increasingly predictable. More moving from venture capital to private equity, and then on that path towards public equity and an IPO.

Point two, this is high level on a macro level. Clearly, the Brazil election is in full swing. I lost the news and noise around. We did have the first round a couple of weeks back with a very market-friendly outcome, and the markets reacted very positively to a right-leaning government coming in from the current left-leaning government in place, with the currency rallying, rates, forward curves dropping, and underlying FinTech equities and equities on large rallying. So there's fundamental and market-level positives behind these trends. The second round comes up this weekend; we'll get into that.

Below the biggest holding portfolio, we like to highlight some of our smaller names or rising stars coming through, especially when they start to share more information. Abbey, a company invested in 5 years ago, broke the $100 million total of average run rate revenue mark, profitable, over $10 million in the UAE, and it's got an IPO process in the domestic Pakistani market, which is important for the company, which I'll double click on. Then from a capital allocation point of view, it was really a quarter where we reached that milestone of paying back our bonds. Very grateful to our bond investors for their support, and put in place a revolving credit facility which is much more suitable to our needs, better size, mechanics, etc. So a real positive step in the whole area of capital allocation and moving from pay down debt to buying back our shares.

On slide 3, just the numbers themselves, not much to talk about because it's a broadly flattish quarter-on-quarter from a NAV, NAV per share in U.S. dollars and in local currency SEK. So I'll pass the mic to Alexis because there's a lot going on under the hood of that NAV for slides 4 and 5 around NAV movements and the performance for their companies involved.

Thanks, Dave. Hi, everyone. Yes, just double clicking a bit on the valuation approach that makes up. Now, essentially the split between market valuations, market latest transaction, and market model is relatively unchanged quarter-on-quarter. 71% of the portfolio is market latest transaction, 29% at market model versus 70% in the last quarter. There's one methodology refinement that we've had in the quarter, which is in Abbey, which our two largest holdings continue to carry the marks of recent and private transactions, which is held at the $108 million Series G, closed in December, and JustPay at its $50 million Series D follow-on, which is closed in January, priced at our secondary sale in that round. Both marks unchanged quarter-on-quarter, both companies continue to deliver strongly post-raise, and we sense check both against traded comps every quarter.

Within the mark-to-model book, Confio was marked down a further $5.1 million. Two things drove that: the Peso, which weakened 3% against the dollar in the quarter, and the continued multiple compression across rates and FinTech, that drove the peer medians that we use to value Confio. But underneath, Confio continues to deliver inline plan and is reigniting growth. As in the first half, the markdown is a function of currency and comps. The rest of the mark to model book was mixed, but net positive. So far still edged down a bit with, say, multiple pressure. And again, that Nebo was marked up, and Abbey marked up as well, both on strong delivery.

I think the one methodology refinement to highlight is that as Abbey has crossed its $100 million ARR and is on its path to IPOing the profitable Pakistan business, we have moved the valuation methodology further down the income statement, as we did with others. And that's like natural evolution of how we value businesses, to incorporate a proper after tax multiple alongside revenue multiple for Abbey. And so that takes total marked model valuations reflecting a multiple below the revenue line. Moving on to slide 5, just to take you through the NAV bridge for the quarter. As Dave mentioned, the headline for the quarter is that the NAV bridge is going to be built. The NAV was down around 1%, pretty flat quarter-on-quarter.

That was driven predominantly by good portfolio delivery, but offset by market moves. So as you can see on the detail on the slide, within the 29% of holdings valued at mark to model, the underlying portfolio performance added $10 million in the quarter. Against that, the multiple compression across our traded comps took $10 million off. With the pressure really concentrated in rate-sensitive FinTech names, and FX took a further $3 million off on dollar strength in the quarter. So delivery, you know, fully absorbed by the comp pressure and currency really was the For 71% of the holding, value of the latest transaction with no new transactions in the quarter, these were held flat and at the corporate level, cash was reduced $1 million, which is the ongoing OpEx and coupon payments in the quarter with no new exit proceeds, and the translation effect from the bond and our equity liquidity balance is net to zero. So that gives us the net-net kind of flattish balance and that in the quarter. Back to you, Dave.

Great. Super, thanks, Alexis. Well, it doesn't get too exciting at a NAV level, at least in the short term. I think what you'll see from the portfolio slides is that growth is compounding and that bodes well for NAV in the medium to longer term. At a high level, this is a slide we always share on the portfolio, generally self-sustaining, which is what we want at this point in the cycle. It's gone from that early venture stage of burning and growing and getting market share to now in this more private equity, the healthy growth but self-sustaining phase. That growth has really picked up across the portfolio in getting into that 20% to 30% range across key metrics for biggest names. They're out there raising capital.

In the last 12 months, you've seen Creditas and JustPay, a couple of others and some other names. But we expect more in the next 6 to 12 months within the portfolio because our portfolio is performing and that will draw in capital. Specifically, we always have to talk about Creditas because it is important for everything we do at this stage. And these are the charts that we like to present. And this reminds me of presenting charts for Tinkoff in the past and EasyCo, gradual up into the right charts, which we all know, love, and want to be showing for our portfolio companies. But this is the ninth quarter in a row of sequential acceleration of growth from Creditas. Now at 26% portfolio growth, 30% year-on-year revenue growth. We are now starting to reach that steady state of 25%, 30% growth. So I wouldn't extrapolate into the next 20 quarters. But this is something that the company promised and quarter-on-quarter, they delivered and it's been a joy for us to basically come out there and communicate that because it makes our life easy for our biggest holding and how well they're performing.

As important below the top line of the business is the efficiency gains. We talked about Creditas and AI, and Sergio's in a couple of really cool podcasts on this that I recommend people listen to. But the headcount is disappearing as agents take the place of people across various lines of business from customer acquisition, customer service and collections, et cetera. AI into FinTech 1.0 companies is having a big impact on operational efficiency, and we're seeing it first hand through the prism of Creditas. These charts speak for themselves. I expect there's more legs in these charts versus the previous ones in terms of operational efficiency leverage and that path towards profitability beyond. And it's a very exciting, not just top line Creditas, but bottom line Creditas. And all of these things are key to the formation of a company to get towards being a public company from a private company in due course.

Bringing it back to macro level, we hate to get ahead of ourselves and we hate to focus overly on macro. But, you know, our portfolio is a function of country level exposure and country level investor desire. Brazil is in a good place right now. It's election time, which means it's noisy, but the first round went towards the right, and the market reacted quite clearly as it seemed that Bolsonaro will take the presidency. The second round runoff is this weekend, and we will see clear caveat. But what the markets said to us was, you know, from a market reaction on equities, names are up 20% to 30% that are peers for our portfolio companies. The currency jumped 5%. Clearly, we've got a BRL portfolio. Nearly 60% of our portfolio is exposed to Brazil, Creditas, Solfecil, Nebo, and they will benefit directly. Lower rates, better for growth, asset quality, margins, stronger currency, better for translation, better comps. You can extract But, you know, it's very clear that the Brazil trade is something that's in focus and our portfolio is exposed to it with the caveat that the second round is held this weekend.

Then below Creditas, you know, every quarter we like to grab a name to put out there front and center. Abbey has been very, especially when companies are sharing data, which is a private portfolio. Abbey has been sharing more and more for a variety of reasons. But the group ARR is now above $100 million. Their regional in the United Arab Emirates is above $10 million from a standing start about 18 months ago. And these are numbers from a company that we invested in from a blank piece of paper, a $1 million investment 5 years ago into Omer Ansari and his team. As important and as exciting is that the local Pakistani business, which is a size part of the business and which is profitable and has a microfinance bank license, is IPOing or plans IPO in the next weeks, and that's important for the domestic business, for domestic capital raising, domestic brand and customer, and for winning the Pakistani market. It's not a classic IPO group level and cash out. It's within the group, but it's a major milestone and positive for Abbey and thus for VEF.

And we have to choose Abbey because versus others, I could have easily put JustPay in this quarter. It's having a great run at the moment, especially on the international side, where international revenues are 20% now of overall revenue stream. So it's gone from nothing to 20%, and international is really working as it expands outside India. And I could have talked about Confio, which in Q3 is really good, really put the foot down on growth, and it's starting to come through on working capital and credit card volumes. We'll leave them for Q4 as we go.

Moving away from the portfolio and back to VEF, capital, capital allocation, capital ideology. I think we've been very clear with our messaging to the market on this front over the last, I don't know, three, four quarters. And I'd like to think that we message and then deliver, and it goes hand in hand. But we did pay down our bonds, the outstanding SEK 300 million of bonds in Q3. Very happy to do that. I'm very grateful to the Swedish bond markets, international bond markets for supporting us through a window where we needed capital. And we have paid that down and replaced it with a revolving credit facility, a much more appropriate tool for this point in our cycle. We'll see lower level of exposure. It's got better rates, 450 basis points spread over STIBOR versus 650. It's a flexible drawdown structure. So flexibility, cost efficient, lower rate. It's better in all aspects of what we do. And it's an indication of travel, where we've gone from, you know, requiring the bond markets to not requiring them, now having a revolving credit facility in place, which is better for us economically and from a business point of view.

From a numbers point of view, we've got about pro forma liquidity of $11 million at this stage. Our net debt's about $4 million at this point. The facility's $15 million. And we'll work on that basis and manage that around exits and capital position and capital needs as we go forward. In focus for us very much is the fact that we trade at a discount. We do not like this, we're very aware of it as shareholders in VEF. And I think with what we're trying to do at VEF, our portfolio performing incrementally quarter-on-quarter, we communicate that, we deliver exits at NAV, the capital comes in, we pay down our debt. And then what do we do next, we move on to our shares effectively. It's the most obvious, you know, investment company one-on-one playbook. Not that everybody does it, but, you know, we have, not that you can do it all in one go, it takes time, but you do reap the rewards given everything we've seen from peers and over markets over time.

But the exits have totaled over $50 million in the last 18 months to 2 years. We believe we have more over the next 12 to 18 months. We've used that to pay down SEK 300 million, or $30 million of debt. Now we're in a position where incremental exits and excess capital assets will be moved towards capital return, capital return being buybacks effectively for the market. So watch this space. We're not making any formal capital allocation frameworks or capital return frameworks at this stage. We will tie that to exit and capital in and the reality at the moment as opposed to theoretically in advance.

And we just dropped in a slide on Georgia Capital. We are very aware of the investment company peers in Swedish market and international, both today and over time, because we're always looking for best in class and benchmarks to learn from, replicate, and benefit from effectively. And Georgia Capital is a listed investment company in the U.K., but it focuses on the Georgian market of Georgia and the private equity fund, effectively listed private equity fund, focused on that market across multiple sectors. They've had a great run of taking their discount 5 or 6 years ago from over 60% to that 10% to 20% range. We're very close to that company. We've done sessions with them and their CEO. The feedback and the playbook is clear about what they've done, the similarities to us, and there's clearly key differences. But we take the learnings for what they are. They had a performing portfolio. They first paid down their debt. They had excess capital in. They bought back their stock. They kept on having a clear message. They kept on delivering on that message. You know, some nuances and differences in that they have a big public listed company in their portfolio, something we would look to do in the future. It's been a performing asset as well, which clearly helps. But a lot of lessons from Georgia Capital, and there's others which we'll bring to the table to show that we don't live in a vacuum. We're very open and aware of what works and doesn't work around the investment company world.

And if anything, we're always going to be there, going to be logical, process-driven as we look to build our NAV per share and close the discount to NAV. And then finally, just to close off on everything that we've said, it's always all about the portfolio. I say this a lot, but without a performing, a quality and performing portfolio, you know, nothing else really matters. And in our portfolio, we are very comfortable and confident in that portfolio today, the quality of it, the growth of it, and the fact that fresh capital's coming in to strengthen it and give it fresh valuation marks. The exits we talked about 2 years ago, it was empty promises, and then we delivered. So now we've got traction. We've got market traction on that front. We believe we can do more. And then you start looking at what those exits can do for us. In the past, they have proven our NAV, in theory, in the market. They've allowed us to pay back our debt. Now, looking ahead, they will allow us to buy back our shares and start to close that discount NAV and give a decent return for shareholders. And then we can move forward from there, talk about medium to longer-term plans for VEF. But that's for another day. We will stop there, operator, and happy to open up for any questions that anybody has.

[Operator Instructions] And now we're going to take our first question. And it comes from the line of Linus Sigurdsson from GNB Carnegie. Your line is open, please ask your question.

Thank you very much and good afternoon. We're coming up on a year since the Creditas fundraise, and I'm assuming we'll see slightly updated valuation there. And we've seen the encouraging financials in H1. But can you just remind us a bit over the past year how, say, your forward expectations have changed incrementally for Creditas? And then perhaps if you could say something about how you think about the way the valuation backdrop has evolved.

Yes, hey, how you doing? No, look, it's not lost on us and it's something that we're focusing on and speaking with our auditors on. You know, logically, it'll be in Q4. It may be in Q1 and some date mechanics there, but it's in the coming quarter or two quarters that we logically move from last round to mark-to-model. I think the mechanics which feed into this, like one, you've got your starting point of the last funding round and the valuations that fed into that, the currency at that point, the market multiples, etc. That's a point in time 12 months ago. But as you said, over the last 12 months Creditas has been performing, arguably it's been performing according to plan but it's been performing exceptionally well. The flip side of that is that the comps, and many of the comps, have actually gone the other way, where multiples have actually fallen over the last 12 months for many of those FinTech names. And then you move to the fact that in this Brazilian election cycle, if we had valued Creditas just before quarter-end Q3 versus 2 days later, there would have been a 25% swing. We did a simulation math on it, which is I hate that volatility in something like Creditas, which is the biggest name in our portfolio. All in, we're not there yet in terms of our valuation, the latter be Q4 or Q1. The underlying performance of company is a tailwind for any valuation we come out with. Over the last 12 months, the multiples have been a headwind and with the currency somewhere in between. So that's kind of where we're at without giving any forward guidance, if that's okay.

Yes, that's helpful. And then on JustPay, I recognize a lot of this, the value from these UPI fees could likely end up with the banks. Could you say anything about what kind if any would be feasible for JustPay to take in that environment?

Yes, what I'll do is I will let Alexis speak on this because he's on the board and the details. And we've been, we're just trying to be very cautious on something that's very top-down positive with still not a lot of micro-level detail. But Alexis, why don't you.

Can you take the mic? Yes, just to provide a bit of context, right, so for the longest time UPI MDR has been mandated to zero and finally the regulator has allowed pricing and 40 basis points on larger UPI that provides a $2 billion a year revenue pool. That will go to predominantly, as you mentioned, like the banks on the issuing and acquiring side, and also the UPI apps. There isn't necessarily a direct benefit to JustPay. They operate predominantly as a technology service provider for most of these services. But historically, the payment infrastructure has had to be subsidized and funded from other profits of these entities. Now there's a very significant revenue pool that will help fund some of the infrastructure projects that JustPay provides and carries out for some of these users. So, you know, I think my expectation is that once this gets implemented, the pricing power just improves pretty materially. But it's hard for us to say with certainty what the direct impact might be anytime soon. I think the other thing to know is that initially, it would plan to be implemented from the 15th of October, and on the 13th of October it was decided that it would be delayed and rolled out post-Diwali. We still don't have a specific date in which this would be rolled out. I think the expectation is somewhere between Diwali and November and the beginning of the new year, but that's another kind of moving piece here that's hard. Yeah, net net very positive, and a company is just half the table right now. Okay, that's super helpful.

Yes, and that very. Understood. And then finally on Confio, I mean, two quarters in a row with clear valuation headwinds. And you mentioned reigniting growth here. Could you perhaps provide some more context on what's changing there at the moment?

Yes, no, I think that the valuation headwinds have been a function of multiples and FX as opposed to anything fundamental in the business. What I would say from a fundamental in the business, you know, so year to date for the first half, Confio is running behind their forecast and pointing to a stronger second half. Really with AI implementation, capital in place on the funding side and looking for the foot down on growth. So we were, you know, glass half empty in the first half, but then it flipped in Q3 to glass half full and they've really delivered on the growth profile of what they were appointed for the full year. So not to get carried away, but basically they're starting to put a foot down on growth, kind of like what we saw Creditas do three, four quarters ago. And we're seeing it through both the working capital book and the credit card book. It's been a very strong quarter. And given the indications from management that should roll into Q4 as well. So we're back in growth mode, and that means, Confio, in the 30% to 40% growth mode. It's maybe 25% to 40%, similar to Creditas and JustPay, where it was lagging in the first half of this year. So hopefully I can give you a bit more context in Q4.

Excellent, thank you very much.

Yes, I'm sorry, just to wrap up on that, Linus, it's kind of like a, you know, on a portfolio level, you're just kind of hearing all these tailwinds in Creditas, JustPay, Confio, Abbey. It's quite nice for us as portfolio managers to have these things to share. It's a good time.

[Operator Instructions] And now we're going to take our next question. And the question comes from Stefan Knudsen from Red Eye. Your line is open. Please ask your question.

Good afternoon, Dave and Alexis, and congrats on the underlying improvements. First up, the Brazilian election. Does it change your view on new investments in the country going forward if we have a Bolsonaro that ultimately wins next week?

Yes, I'm in New York this week meeting investors and there's a lot of people getting carried away with the impact of Bolsonaro on Brazil. We're trying to be level-headed, well, cautiously optimistic, given everything we've seen in the emerging markets over time. But, you know, the fiscal focus of a Bolsonaro right-leaning government is on the economy. Government around government debt rates will be very market friendly and will be very FinTech friendly in terms of growth and margins, asset quality, especially for the lenders in that market. So, yes, it would. If it is cemented this weekend, it would make us net more positive on Brazil, even though we've been in Brazil for 10 years through the governments of right and left, and there's a lot of fundamental positives. I think first and foremost, you have to look at it through the prism of the fact that we're very long Brazil, and we benefit on that front. But yes, it would make us more positive, and it would make international capital more positive, which would be good for both capital into the country, and in theory, capital out in terms of IPOs and M&A.

Very good. And then the other thing, you were really clear about the buybacks priority going forward. One thing that is missing from that piece now, obviously, it's liquidity. So can you say anything about how you think about potential exits, where you would like to focus, and how do you view it from a strategic point of view?

Yeah, that's fair. It's not much of a buyback without cash, is it? But where we're at is, I think what we've been trying to do with the markets over time is just drop breadcrumbs, let them know where our mindset is, where we're going to next, where the direction of travel is. You know, we did it with exits, then we did it with debt, and now we're doing it with buybacks. Nothing's real until we have the exit and the cash on balance sheet to do them, so hence we're not coming out with anything too deep and formal. It's just a high level ideology and direction which I think the market understands and likes. And regarding exits, I hate to pick timing of exits in our world because they're so volatile and so unforecastable, even if you are confident on different ones and when. So, you know, what I just say is we're confident over the next 12 to 18 months we will see more continuation of exits. But we'll hold back on anything a bit deeper on capital allocation until then if that's okay.

Yes, sure, no problem. And then lastly from me, a really good case study on Georgia Capital there. I think it quite resembles Kinnevik back in the days when it used to own a large chunk of Tele2 for cash flows. I mean, in your situation, do you see that, for example, Creditas can be comprised that's holding for you in the future that can provide cash for you as a second liquidity lever?

Yes, no, for sure. I think there's many possible futures clearly for VEF. And one of them is one where Creditas does IPO. We exit some in the IPO, but we've got a large listed asset in the portfolio, portfolio that's near liquidity, probably pays dividends, and is an anchor from a valuation perspective because it's got a public market price. We had that when we began with Tinkoff Bank. It was a great experience, albeit we were very happy to sell it when we did and make a great return for investors. But that's whether we go there organically through the IPO of Creditas, Confio, JustPay for example, or whether we go there inorganically in time by the acquisition potentially of something listed. And that's beyond the short term strategy. You can see how a listed company in the investment company's portfolio, like what you said in Kinnevik in its glory days with Tele2, is a great example of what we could do.

Super. Thanks, Dave. Good, very clear. Thanks for the presentation today.

Thank you. Dear speakers, there are no further questions for today. I would like to hand the conference over to your speaker, David Nangle, for any closing remarks.

Just a quick one to say thank you very much for following us as always, your participation, your patience. I believe we're doing the right things to have a better future for all our shareholders. So watch this space. Stay close to us. Any questions, feel free to come back to us directly. And we look forward to seeing you next quarter. All the best. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day.

This live transcript is auto-generated without human intervention or review.

Good day, and thank you for standing by. Welcome to the VEF 2Q '26 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Nangle, CEO. Please go ahead.

Thank you very much. Good morning, good afternoon, everybody, and welcome, as per usual, to our results conference call, which follows the release of our 2Q results earlier today. On the call, myself, David Nangle. I'm CEO. With me is Alexis Koumoudos, our CIO and partner since pretty much inception at VEF. I'll start and then Alexis will come in and I'll round up, and then we'll open up happily for questions after about 15 minutes of presentation as per usual.

Just to kick off on Slide 2, some of the key events of the quarter, and we'll go through some of these in a bit more detail in the presentation itself. But the headline NAV itself was broadly flat quarter-on-quarter, albeit up 8% plus year-on-year. That's in dollar terms. Slightly higher in SEK. From a NAV point of view, there's a lot of detail below that, really valuation multiples compressed in some of our key markets, but that was offset by the underlying performance. Strong performance, robust from the portfolio itself, which continues to be in a good state of health.

Specifically, Creditas, we always focus on in these events given its size and importance to VEF. Another strong quarter for Creditas in Q1 '26, with the last official numbers out, with growth now in the company loan book top line exceeding 20% and compounding faster quarter-on-quarter and improving in efficiency gains as it goes and something I'll definitely double-click on. And a lot of double -- a lot of those efficiency gains are actually coming through from its engagement with AI. And we spent a lot of time with our portfolio and its engagement with AI, and we're actually starting to see real benefits. We use Creditas as a casebook example this quarter, both in the management letter, but also in this presentation to touch on some of the key aspects that Creditas is using and the positive implications that we're seeing, not in theory, but already for operational efficiency costs, but also on widening TAM and growth, which is key on both sides of the fence.

From a personality point of view, we freshened up, strengthened our Board. For a company now 11 years old, there's always going to be turnover in the Board at this juncture. And we're very happy to have Will Pruett from Fidelity -- formerly with Fidelity and Torun Litzén from Kinnevik in Sweden, 2 very high-profile individuals with deep expertise across a number of areas, which are very important to VEF as a listed investment company in emerging market fintech.

And finally, our strategy remains very much focused on long-term value creation and compounding growth in our portfolio. We spend a lot of time talking about our portfolio because it is everything. But around that, what we can control is the exits we've been delivering, how we put that capital to work to strengthen our balance sheet, paying down our debt and moving on to our shares, which trade at a discount, we can buy them back and obviously create value for all as we go, and I'll double-click on that.

Moving on to Slide 3, just a couple of numbers. Quarter-on-quarter, the headline itself made it feel like a quiet quarter, albeit a lot happening below the hood. Year-on-year, a bit more tenor to it on a dollar point of view. From an NAV up 8.4% year-on-year. And from a SEK per share, up 11.6% year-on-year.

From here, let's move over to Alexis, and I'll take -- pass you on Alexis for Slide 5, plus, you can get a bit more into actually what happened in the quarter from a financial NAV key trend point of view.

Hi, everyone. Yes, as we look at the portfolio in the second quarter this year, there's been no change in the splits on the quarter, of 70% of the portfolio is valued at latest transaction and 30% mark-to-model. That is unchanged quarter-on-quarter. Our 2 largest holdings both carry the marks of very recent and sizable transactions. Creditas is held at its $108 million Series G [indiscernible] at its $50 million Series D follow-on in January, priced at our secondary sale in that round. So both marks are unchanged quarter-on-quarter, and both companies continue to deliver strongly post-raise. We sense check both against traded comps every quarter. And so today, 70% of our NAV is anchored by third-party transactions closed within the last 7 months.

Within the mark-to-model book, Konfio was marked down around 6% in the quarter. This is purely a comp story. The listed LatAm fintech and financials names that drive our peer medians came under pressure through the quarter, but underneath that, Konfio continued to deliver in line with plan. So as in the first quarter, the markdown is a symptom of market moves rather than anything company-related. And encouragingly, the rest of the mark-to-model book moved higher on delivery, Solfácil, Abhi, Nibo were all marked up in the quarter, with Abhi up around 25% quarter-on-quarter as the business continues to compound at pace, and Dave will spend more time on Abhi later in the presentation.

Moving on to Slide 6. Here, we show our regular quarterly NAV evolution and the breakdown of the moving parts. The headline is this quarter has been a quiet or stable NAV bridge. The NAV at the end of the second quarter ended at $406 million, as Dave mentioned, down $2.5 million or 0.6% in dollars and up 8.4% year-on-year. Within the 30% of the holdings valued mark-to-model, the underlying portfolio performance added $5 million and FX added a further $3 million with the Mexican peso up 30% (sic) [ 3% ] and the real up 1% against the dollar over the quarter. Against that, multiple compression across our traded comps took off $8 million. So delivery and currency largely absorbed the comp pressure.

On the 70% of the holdings that were valued at the latest transaction, that was unchanged. And at the corporate level, cash was reduced by $3 million, which is our ongoing OpEx and coupon payments in a quarter with no exit proceeds. And there was $1 million of positive translation effect on the bond. So net-net, the NAV is broadly flat on the quarter with robust underlying portfolio performance and FX tailwinds offsetting market volatility.

Moving to Slide 7. On this slide, we want to reiterate we continue to feel confident in the high-quality portfolio and its ability to compound from here. Over 90% of the portfolio has achieved self-sustaining cash flow profiles, and all of our top 3 holdings are there. We see the portfolio growing 20% to 30% over the next 12 months on a revenue basis and 30% on a gross profit basis, with our large late-stage top 3 holdings driving much of this. And Dave will talk a bit more about Creditas, but Creditas is that really strong proof point where we've had 8 straight quarters of annual, quarterly growth and seeing record originations up 29% year-on-year.

On fresh capital, our companies are well capitalized across the board, Creditas and Juspay, the latest standout fundraisers. We remain encouraged by deal activity across our geographies and by our company's ability to keep attracting fresh capital at strong marks, which drives real value growth and creates liquidity options over time.

With that, I'll hand back to Dave to go through a bit more detail on Creditas and Abhi.

Super. Thanks. Yes, there's a few topics I want to touch on before I wrap up and open up to any questions. First is portfolio on a micro level as opposed to a macro. Creditas itself, we are very happy with Creditas at this point in its cycle, and we've been with the company for coming up to 10 years next couple of years. But it's in the best operational health. We've seen it. One is the growth aspect of the story, and this comes through on Slide 8. And it's just clear in the slides and the charts that we see with the loan portfolio evolution, the revenue evolution. We were talking a lot about Creditas reigniting growth back in early 2024, when it was theory. And what we've seen is, quarter-on-quarter-on-quarter, when we look at the year-on-year growth, it's gone from single digit to low double digit, and now we're north of 20% in Q1, and that goes for both the loan book and also the top line revenue.

We're looking at Q2 numbers as we speak in-house, and I sit on the Board of Creditas and what we're seeing is that improving yet again in Q2. So this really acceleration of growth at Creditas compounding again inside of our portfolio is happening and is very visible through the data that they are producing. As important, less well flagged or predicted, was the operational efficiency, the cost evolution that we're seeing at Creditas, which is a real positive. A lot of this is AI-driven, which I'll talk about in a second, but we're seeing great operational leverage at Creditas at this point in its cycle as the top line of the business just grows at a pace much higher than the OpEx base. We're seeing CAC at all-time low. Customer acquisition fell below 10% for the incremental loan and for the first time ever in Q1 and falling. And a lot of that is down to the headcount evolution of the business, and I'll talk about that now.

And this is AI. This is a thing that we didn't overly amplify when AI was coming through 12, 18, 24 months ago. We've waited. We've worked with the tools. We've worked with our companies until we're at a point where they're actually starting to make a difference on a -- from a real point of view, from a numbers point of view, from a business point of view. And now we're starting to highlight and show both some of those examples. And it's nothing better for us than showing through the prism of Creditas, our biggest company, and it's having a real impact on their business.

Sergio joined Keith Richman recently on a podcast. He's a Board member of VNV, a sister company. And in that, he went through a lot, and he talks a lot about this with the Board at Creditas and the key shareholders. And what we've seen is that agents are now a big part of the business, working along with humans, the better humans are becoming more like air traffic controllers in the business, and AI tools and agents are coming through from customer acquisition: onboarding, communication, collections, into scoring. And what we're seeing then from a math, from an Excel, from a classic analytical point of view is that the employee count is falling. They were 4,000, remember, over 18 months ago. They're below 1,800 today. They're above 2,000 at the start of the year. So it's really starting to compound down.

So at a time when we're getting our growth in the loan book coming through and it's improving in terms of pace, we're actually seeing a real operational leverage story as the AI tools and implementation of them are really hitting headcount and operating expenses. And to add to that, once you've got lower operating expenses, you can do better pricing, better cost to serve, and actually AI then enables a bigger TAM for Creditas to sell its products into. So I think we're still very early days on this with Creditas, and many of our other companies have got many other examples to play out there, but we're actually seeing tangible benefits in the Creditas, efficiency gains, increasing TAM and operational expenses, which just adds to that top line growth story I was talking about on the previous slide.

I also wanted to talk about something beyond the top 3 this quarter because we do have a number of our companies coming through, albeit smaller in scale. So less impactful on NAV today, but can be more impactful on them tomorrow. And just a reminder, we'd like to remind the market that we, on average, do pick winners to get into the portfolio. We do nurture them through to maturity and do create a lot of value for our shareholders over time. And Abhi is one of those rising stars in our portfolio. And this is a seed investment. We don't generally go that early at VEF these days, and we're more in the growth stage when we do invest. But Abhi was a seed investment. It's a company -- a fintech company in Pakistan, since expanded to the Middle East. But it really has scaled at pace and in a very disciplined manner.

They've managed to balance organic growth, which is classic fintech, but game-changing M&A when they bought a microfinance bank and got regulated and licensed in Pakistan and also partnered to a similar degree in the Middle East. Middle East really is growing the expansion because Pakistan were quite a sizable entity even after just 5 years. And what I'd say from a numbers point of view, it is exactly what we're trying to do. This is a company that's got now a $200 million loan book. It's got $260 million of deposits, real banking, mainly in Pakistan, these numbers, $85 million of run rate revenues at the top line and $20 million plus of EBITDA. So this is a company from inception, us backing a founder in key scale emerging markets, mainly in digital banking, we're starting with one product, earned wage access into SME lending and has become a much more broader financial product platform.

We do -- I'll also have an interview with the founder of that company, Omair Ansari, on our website. We did that recently, and we're very excited with where Abhi is going. And I'd say watch this space. There's a lot more to come from this company in terms of size, shape, compounding and value, and it can become one of those ones that are breaking out from the general part of the portfolio into the top 3 to start making a real impact on our NAV and compounding going forward.

Beyond the portfolio on a micro level, I always want to talk about our cash and balance sheet. It's key. We are at a position of $24.7 million of debt, which is falling due by year-end. And our cash position today is slightly below $22 million. We're continuing with the communication. The plan is to pay down our debt ideally by year-end. If not, we will be directionally positive as in, reducing our debt, and we've done that since we kind of peaked at a $50 million debt ticket, and we brought that down half already and more to go as we deliver exits. The exits are coming. We did one in Q1, nothing in Q2, but we're very confident there will be more coming in the coming quarters or next 18 months. We're very focused on a number of opportunities on that front, always looking to pick the best opportunity at the right time, at the right price. There's no pressure on us to do the wrong thing.

So reducing our debt with this capital allocation ideology is key. And then it's very hard for us to look beyond our shares, which I'll talk about trade at a deep discount and that's the highest IRR opportunity that we see with excess capital as we start to get beyond the debt hurdle, which is in front of us. So directionally positive, strengthening our balance sheet, logical capital allocation, and that's key to driving future value for VEF and our shareholders.

A couple more slides. One is I wanted to bring back up the share price and the discount to NAV, just to remind the market, our shareholders, of which we are some, that we have not forgotten. We're very focused on this. We are not happy with this. We talk a very strong game about what is happening under the hood at VEF, and that's our portfolio, the trends, the exits that we're delivering, the compounding growth. That's all good in its pocket. At the same time, we have to be very cognizant of the share price and where it's at. It's something we're not happy about. We believe we have a playbook of delivery, and that delivery of the playbook with a performing portfolio and the right use of excess capital as it comes back in capital allocation from debt into equity is the right way and tools to close that discount and improve the share price over time. So it's kind of hand-in-hand approach of the portfolio and then the right use of capital allocation over time fixes this and the right -- makes it directionally positive as it was in the past.

Before I close up, very happy to talk about our new Board members. This is something we have been working on for a while. We want to surround ourselves and have the right people in the room for long-term value creation. We want to have the right people helping us in EM, fintech investing and questioning us on corporate governance, capital allocation. Will Pruett joined the Board recently. Will is a phenomenal individual, very experienced ex-Fidelity for EM, emerging markets financials, but also for Latin America. He's on the [indiscernible] listed Latin American fintech companies. He's very much in the wheelhouse of what we do day-to-day. He's more on the public side historically. We're on the private side. But he's got great experience and great insight [indiscernible] hit the ground running.

And also Torun, who joined us, ex-Kinnevik. What we like about her is the fact that she's been through cycle with Kinnevik, up, down volatility. She has seen everything from the inside of an investment company: riding high, going through headwinds. And she just brings a lot of honest insight to us and our story around just lessons learned, what happened where and the implications of different decisions and movements. So 2 fresh additions, fresh mindset, fresh energy to the Board, and we had our first Board meeting with them after the AGM in May, and it was a very positive event. I'm very happy to have them on board.

So just to close off, I think that our message in the market continues to be, one, we're very happy with everything that's under the hood at VEF. There's a lot of controllables, and we believe we're controlling them well. A lot of the focus is the portfolio which -- self-sustaining cash flow profiles are not needing those cash that did maybe in the past, growing now start to compound at a faster pace. Creditas is a great case in point and attractive enough to be raising fresh capital from the market, which is great for us to see in new marks and capital in. The exits, they don't happen every quarter, but we've proven out with a number of exits over the last 18 months and a clear guidance for more over the next 18 months.

And then you kind of look at capital allocation and what we've done with that. We're very clear we want to be rid of our debt, and we're very clear that our shares trade at a discount that makes them too enticing not to be buying with excess capital. So it's -- happy to see the portfolio compounding in value feeding through to NAV and then very focused on the controllables around capital, capital in and capital allocation to add value as we go.

Operator, I will stop there, and we can open the floor to Q&A for any of you, please.

[Operator Instructions] Our first question comes from the line of Stefan Knutsson from Redeye.

First off is regarding the exit part of progress sort of -- I mean, you talk a lot about Creditas and the impressive AI development that they've had. At the same time, we have seen some LatAm fintech having a hard time in the public market. So my question is really regarding how flexible you can be with the bond refinancing coming up, if you can sort of wait to do exits to get a better price? Or yes, can you talk about that development, please?

Yes. Stefan, I think you've touched on a few different aspects there. So I think Creditas on a micro level is doing very well. We were very transparent. They're very transparent. Numbers are coming through. The information is being shared, both from a growth, top line, operational efficiency, AI. So very happy to see when we're winning with Creditas, and it's in a very good place.

You did allude to Latin America. A lot of our markets and markets in general do blow hot and cold on a quarterly half year basis. Last year, 2025, was very strong for Latin America. Latin American equities, they did compound at a very healthy clip. Year-to-date, it's been less positive, while U.S. markets have been rallying hard. LatAm markets and some of the peers to the likes of Creditas, Konfio have come off highs. That said, we have a tailwind of the currency. So there's many moving parts in a valuation. But we're very happy that through cycle, once we got the right companies, we will be able to exit them at the right point in the cycle, and we try not to get too caught up in markets up, markets down in any given quarter in our markets, the same with currencies as tends to happen.

Now bringing all that back to exits, what I'd say Creditas is one of our companies. We have more than 10. We have a number of work streams around exits to get cash in. And so Creditas obviously is a big one. There's a longer-term playbook on Creditas where the founder is very clear, and he plans to IPO, and that business is definitely going in that direction. We're working with him towards that, not today, but we're hoping in the next couple of years. Outside of that, there's always potential for secondary shares and sales, the right price, right opportunity. But these things go across the portfolio. As you've seen with Juspay, we did some top slicing twice in the last 12 to 18 months. And we've done M&A and IPOs within our names. So it's not just all about Creditas.

And I want to say from a bond point of view, I think we're $400 million of NAV, $25 million of debt, not to be blasé, but I think we're in a comfortable debt leverage position. And direction of travel, what we've told our Board and shareholders is we want it to be constantly down and ideally gone. And that will be a function, obviously, of delivering exits and what we can do. But we believe we can. Outside of that, you have other tools beyond simple bond. You've got revolving credit facilities, et cetera, where you can bring down the actual exposed number of debt by using other tools at your disposal from a capital markets point of view. So we have a goal in mind. We have a lot of moving parts in that, but direction of travel is lower debt irrespective of the quantum of exits that we get in the next 2 or 3 quarters.

Very good. And secondly, on Konfio, was the NAV write-down mainly multiple-driven? Or does the business face any challenges of late?

No, it's multiples. To allude to your first question, it was multiples on the headwind. It was FX and company performance on the tailwind, but the multiples were the bigger force this quarter. So it's always an interesting one. At the moment in time, it's at the date at the end of the quarter that you do your calculation for your NAV. And if the FX skews one way or multiples skew the other, the only -- the lowest beta part of it is actually your company forecast and everything else can skew and spike one way or the other. So it's almost -- we think we know the NAV is coming into quarter end and then numbers can move left and right, but Q2 was heavy in terms of LatAm multiples, and that flowed through to Konfio.

Thank you. There are no further questions at this time, so I'll hand the call back to David for closing remarks.

Super. Thank you very much. Everybody, thank you very much for your time and for your interest and for following us as always. I think we're quite clear with our message. We are happy, but working hard on everything that's under the hood at VEF. There's a lot to be happy with in terms of the portfolio, the nature of compounding value and what we're looking to do on the exit front and capital allocation.

As management, as shareholders, we are not happy with the share price, but we believe we've got a strategy in place, with everything I said on the portfolio and capital allocation, to put that right and in accordance with time. But thank you very much for your time and interest again today, and we'll see you again next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.

Good day, and thank you for standing by. Welcome to the VEF Q1 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, David Nangle, CEO. Please go ahead.

Super. Thank you very much, operator, and good morning, good afternoon, everybody, and thanks for joining us in our First Quarter '26 Results Call and Presentation. As per usual, I have my colleague and CIO, Alexis Koumoudos, with me, and we'll spend the next 15, 20 minutes just running through all the events and key numbers and parts that made up the quarter for VEF as was.

And all the details are online as well from a presentation point of view, and that will be available as well after this call. And the key events of the quarter. Looking at Slide #2, and I think bigger picture, we're all very cognizant and aware of the geopolitical-driven volatility the world that we're living in, the first order effect, the potential second order effects. We're not going to delve into all of that here because it's well documented. And but many people elsewhere, but we will give you a bit of a flavor of how light at VEF has been affected by that, while we marry in all the micro level delivery of the first quarter.

I think the first point is the NAV itself. Obviously, we had a bit of a headwind in Q1. And naturally, when 30% of your portfolio is market to model and you have a market sell-off. So the NAV was of 5.8% quarter-on-quarter in dollar terms, a bit less in SEK terms. Fundamentally, portfolio is doing very well. Currencies were in our favor, but multiples on some key names drove the NAV quarter-on-quarter down.

And more specific and back to the micro level and performance exits continue. And we had another secondary in just pay in 1 quarter '26. And at our Series D follow-on, $50 million is $1 billion-plus valuation company we invested in $100 million a few years back from a total valuation point of view. But yet again, we use the opportunity to top slice our position there and taken nearly $15 million of gross proceeds, at a healthy IRR of 34% and still having a decent stake in the company.

I think most important for us and our narrative to the market is that was an exit of NAV plus/minus. That was an exit of both NAV. So continue to turn our NAV, our companies into dollars at the valuation that we say, plus minus.

And coming back at the macro level, I think from an exposure point of view, we're getting a lot of questions, obviously, from the geopolitics of the world and how we are or aren't affected, even though. I think everybody is affected in some way, shape or form. We are actually in a relatively good and I'd say relative macro position in terms of our exposure geographically with 80% of our portfolio plus/minus being Latin American exposure, which is a relatively safe haven part of the world. And Brazil alone was over 50%, maybe 60% of the credit cost being our key asset. And we're obviously the commodity trade that Brazil is a bit of a safe haven status with high interest rates, commodities and just geographically well placed. We're seeing markets there rally currency index, et cetera. and we're indirect and direct benefits of that exposure, and I'll get into that in the presentation.

And more micro level, back to Creditas, it's been a really good window. And last, we've enjoyed the last 15 to 18 months of Creditas quarter-on-quarter-on-quarter, the fundamental story continues to improve in terms of accelerating growth and there's a new layer of positively been coming into the story. Now it's more around AI-driven efficiency, you get nice operating jaws from a top line volume revenue growth and efficiency coming through. Healthy guidance looking forward. And those kind of catalysts that everybody likes to see around raising capital, nice valuations, getting a bank license. So it's a nice window. We're enjoying us. They are delivering, and that's most important for us as an investment company.

And then finally, a more macro again, away from geopolitics, but more in the tech side and the AI adoption, we would kind of stayed away from overly talking about AI and from [indiscernible] portfolio point of view. But I think the pace and progress of these models now has really become game changing. All of our companies are engaging. It's gone theory to reality. We're enjoying seeing what they're starting to do, and some has already started to feed through to the numbers like its I guess we just wanted to put a marker down this quarter, and we'll be updating you as we go on this front because it's been a very exciting next wave of efficiency growth, costs, operating jaws that we can see even true in our portfolio.

Going into the presentation proper, just a few numbers. It's all been flagged earlier on in our release, but our NAV is at $408.6 million for the quarter, up 5.8% in U.S. dollar terms. As I said, the second set per share is down less because of the weakness in the local currency, and it's down minus 2.8% in the quarter.

I'll skip over Slide 4, and I'll move directly to bringing Alexis into the call and for Slides 5 to 9, where he'll talk us through valuation moves in the quarter. I know a little bit more about the exits that I talked about in JustPay Ambien.

Alex, it's over to you.

Thanks, Dave, and hi, everyone. Yes. So as Dave mentioned, in the first quarter of '26, 70% of the portfolio is valued at latest transaction and 30% mark to model. Within the portfolio, as Dave mentioned as well, Justpay completed the $50 million Series D follow-on at a 16% dollar premium to the Series D of 2025, in which we took $14.6 million in secondary sold for cash, and we hold a 6.4% remaining stake priced here at the secondary price. You'll see that the net impact from the NAV of -- is the net impact of $10.8 million markup from the up ground that happened and selling $14.6 million for cash, which reduces our NAV for Justpay in the mark value by $3.8 million in the quarter.

The other thing to point out on this slide on Slide 5 is Solfacil rolled off a recent transaction to mark-to-model as it completed 12 months from the transaction. And Solfacil, Konfio and Nibo valuations under mark-to-model valuation and methodology were impacted by the March sell-off and comps across tech, fintech and SaaS. And outside the impact of the comps, each of these businesses continue to deliver in line with or ahead of our business plan. So the markdowns were purely a symptom of market moves.

Getting into this in a bit more depth on Slide 6, we show the breakdown of the dollar NAV evolution over the quarter. And you can see the biggest impact on the NAV in the quarter was really the sell-off in comps and there are multiple impact on the mark-to-model portion of the portfolio. This impacted our NAV to the tune of $14 million and it's reflected in the valuations of the companies and the mark-to-model methology names like Konfio, Solfacil, and Nibo. And the -- this was offset to by the portfolio performance, which had a $10 million positive impact on the NAV.

Under the latest transaction portion of the portfolio, you'll see like a negative $4 million move in this section of the portfolio. And that is purely the $10 million uplift in the Justpay valuation, offset by selling $14.6 million in Justpay. And the corporate cash increases $10 million, that is predominantly from the proceeds of the sale of Juspay offset in part by OpEx and coupon payments in the quarter. Overall, the FX impact was neutral in the quarter. And the net impact of all of these moves was, as Dave mentioned, the 5.8% contraction in NAV quarter-over-quarter.

On Slide 7, we continue to -- we just want to reiterate that we continue to feel more and more confident in our -- in the quality of the portfolio and its ability to compound from here. We see our portfolio growing at 25% to 30% year-on-year from a profitable base with our large late-stage top 3 holdings driving much of this on a self-sustaining basis. And we're encouraged by the deal activity we're seeing across our geographies and feel proud of our companies and their ability to continue attracting fresh capital, which drives real value growth and creates liquidity options. And we're also proud to find opportunities to continue converting slice of our NAV to cash at or above the marks we hold them at whilst delivering benchmark returns like we did in the Juspay round.

So moving to Slide 8. We just wanted to reflect a little bit and update everybody on what Justpay is as a business, our history with the company and where we stand after this transaction. So Justpay is the leading payment orchestrator in India with a dominant market share. JustPay power some of the largest enterprises in India and now has a large payment infrastructure business, powering UPI apps and bank infrastructure. Justpay has also now launched an international business, and they have offices across Asia, Europe, the Middle East, U.S. and Brazil.

And by the numbers, Justpay power is over $450 billion of annualized TPV, representing about 70 million average daily transactions, and it's growing its top line in over 50% year-on-year and the business quality is high with near 0 churn over 80% gross margins and it's been profitable for over a year now.

Justpay was our first investment in India. And we made -- we wrote 2 checks into the business, 1 of $13 million in early 2020 and $8.1 million in December 2021. And since our first investment, revenues have grown over 10x and the company has raised money in rounds led by Tier 1 investors, including SoftBank, Cidara and WestBridge.

And if we include the 2 realizations of $29.4 million, our invested capital has grown from $21.1 million to $94.9 million representing of 4.5x [indiscernible] USD terms. And the proceeds of our latest secondary sale, the Series D follow-on represents 6.6x mark and a 38% IRR in U.S. dollar terms.

As we mentioned, we retain a Board seat at Justpay post this transaction and a 6.4% stake in business. And Justpay really operates at the bleeding edge of tech by any standards, and we continue to be very excited about the potential of the business and the path that it's on. We believe they will be in a position to announce some more international success very soon. And we've become -- and it's become one of the strongest AI native companies across the fintech ecosystems that we've seen with a product road map to reflect that. We're excited to continue our journey with [ Vimal and Sheetal ] into the future.

On Slide 9 we just wanted to update our summary of exits of the last 18 months in a slide. And so since November 2024, we've delivered 4 exits totaling $52 million. We continue to target opportunistically converting our NAV to cash at or above our marks to strengthen our balance sheet and improve optionality in an environment where we see plenty of opportunity.

Overall, the $52 million in exits represented by BlackBuck IPO in sale, Gringo sale in the and the 2 Justpay partial sales to Cidara and WestBridge were executed at an 8% premium to the pre-transaction NAV marks on these companies. a 1.4x aggregate MOIC and 11% gross IRR over a 3.5-year holding period. And if we include the retained stake in Justpay, the total value of these investments would represent a 2.5x MOIC and 24% gross IRR, including the unrealized gains at Justpay. And we continue to work towards more exits of a similar standard going forward.

Dave, back to you.

Thank you very much, Alexis. Look, a few slides to wrap up, and then we'll open up to Q&A for anybody who wants. But leaning on from where Alex talked about the exits there, most not -- the Justpay the most recent one. A lot of this has been about strengthening our balance sheet from a period of 2 years ago where we had a debt position. We're along a portfolio of private EM assets, and we start making promises to the market about being focused on exits, delivering those exits close to NAV, then getting that capital in, strengthening our balance sheet looking at our debt, start to pay that down as a priority, then looking at our equity and everything that extrapolates from there.

And where we're at as of the end of Q1, approximately are cash neutral in that we've got $25 million approximate of cash from the ages the buildup over the last 12 to 15 months, and our debt outstanding at current FX is about $25 million. So our capital position is in a much more, let's call it, healthy position, but work to be done. We're still very much focused on strengthening the balance sheet. And then the capital allocation and ideology and what would I share with you today. I think what you saw last year was capital allocation policy 101.

As funds came in, we paid down half our debt. We showed a market we're serious about that. So we've delevered the balance sheet, strengthening our position. And then we nibbled at our shares and bought back a couple of percent at what are significantly low valuations, especially as we're realizing our MAP positions as we go. At this moment in time, we're out there talking to our investors talk in the market, we're listening and we're logical as we go.

So we've got a priority. We've got a bond falling due at year-end. We already pay that down or roll it but that's in our focused vision. And then after that, you have the natural hurdle of your shares trading at a deep discount, and it would be very hard for the dollar to work beyond that in the near term with incremental capital coming in. At this point, it's all theoretical because we are in the capital position we are in. But as more capital comes in, we'll start to shape this out. and give the market more color where we think. But the bonds, our own shares is definitely where our head space is. It's where head space was last year, and that's how we act so just by our actions as we go.

Moving back to a macro level, I talked about this at the start, but I suppose the slide of our exposure as an investment company. And geographically, we are exposed heavily to Latin America and then India, with some small snippets elsewhere in the emerging world. We're very cognizant. We're not complacent of what's going on in the Middle East. We've seen this many times before. We know there are the first order immediate effects of these teams as commodity prices spike and people look at most obvious things. But then there's a second and third order, depending on the longevity and the debt of this situation as it feeds into global macro inflation, interest rates, a listing point of view, but also on individual markets.

I guess what we can say today is being close to our countries and our companies, the focus is that we're in a relatively good position. and it's all relative in a world that we live in. But Latin America is a strong point and Brazil specifically. It is a size commodity producing country, both food and hard and soft commodities it is benefiting, obviously, from [indiscernible] well insulated from a lot of the issues given this geography.

We've seen at the Bovespa being 1 of the most impressive or best-performing markets year-to-date. Also the BRL, the local currency I think as of today, it's 10% versus U.S. dollar year-to-date. And I was just reading about BlackRock and Brazilian ETFs are seeing record inflows. So some of the a read across from what we are an exposure that we have. But some of them are actually fundamental as in the BRL, we are directly exposed by Creditas, Solfacil, Nibo and to the local currency. It's a nice tailwind for what we do. We're not a macro fund, we do take the macro benefits when they come. So we're well situated at this time. We're watchful of countries like India who are net importers of commodities. But through the prism of all our companies, we see no issues to share with you to date. We have some small exposure in the Middle East via Abbie, mainly a Pakistani company, a small growing part of their business with no issues today. And so I think geography, geopolitics, we feel well positioned. We are watchful and we will continue to share as we go.

And getting on to Creditas on a micro level, so we're stepping back and forth between macro and micro because it's that kind of quarter. But what you're seeing at Creditas is at the side of the start, we're liking the compounding nature quarter-on-quarter-on-quarter of both news flow and performance. I think the loan portfolio year-on-year growth, we started talking about this early last year, how it's starting to accelerate, but nothing is real until you see it. And you're seeing the acceleration of the loan book to nearly 20% year-on-year as of Q4. I expect that to continue into Q1. That feeds into revenue growth.

I'm probably as exciting something that we didn't predict when we started talking about Creditas has returned to growth status, back at the start of 2025, was the efficiency drive and the second order benefits we're now seeing from AI and it becoming an AI-first or native company when it comes to a lot of parts of its business, and that's really join driving elements like the CAC falling, and we're seeing more growth versus costs, revenue growth should exceed costs. There's a lot of positives starting to feed in there, which we'll get into gradually over time. We share some metrics here around origination growth being 2x versus the percentage growth in OpEx, which is very nice to see.

And just on AI, what I'd say here is we're kind of putting a flag down this quarter. We're starting to share on AI. And Alex has talked about just pace and its initiatives. I'm seeing a personally true credit as really around the CAC, the customer acquisition costs, which was running at 20% of originations only a few years ago, it's now fallen below 10%, to record low levels. And a lot of what they're doing is around collateral underwriting their go-to-market customer service road.

You're seeing the same in comp in Mexico. But where these things become real and where we can start sharing and get excited and get you excited is when they start to hit the numbers. So the CAC is 1 example that Creditas shares openly with the market. The operational efficiency where we got 2x growth in originations and only 25% of OpEx in the last 2 years.

And finally, the head count, which peaked at over 4,000 is now below 2,000 and moving. So there's a lot of nice trends to senior. Yes, a lot of nice underlying trends that we're seeing from the AI-driven efficiency drive, and this goes well beyond the top 3 companies in our portfolio.

And then moving to the last slide, Slide 14. Just to wrap up what would I say, very similar to what we said in previous quarters with on tweaks. We'd like to be consistent and evolve our messaging, nothing too dramatic, but it always comes back to portfolio. We're very happy with our portfolio. It's a very focused portfolio. It's cash flow profiles are very positive there, getting to that neutral position and then moving into positivity, growing again. We want growth in this environment. Efficiency drivers are kicking in at some names. You get nice jaws starting to evolve, it early and raising fresh capital, as Alex said, new marks for Justpay and Creditas. Best-in-class companies raise capital in size in these markets.

I think the exit is something that you're going to hear from us again and again and again. because we're very happy and proud of the fact that we're delivering them. They're hard. We're delivering them at the right price. And then you build that cash pile, you strengthen your balance sheet and then it's what you do with it. I think so far, our experience has been around focusing on debt and looking at our shares and looking forward. I don't see that being too much different. It's just a matter of which we prioritize and win with what cash balance that comes at us and what the space we will be communicating, but we get what we should be doing. We're listening to the market, it's obvious.

And finally, pipeline, I think is a long-term story of best that continues we are well situated in the world of emerging markets fintech well connected. We're seeing a lot of good companies that we would like our and your capital in. There will be a time for that, and we're positioning ourselves for that always.

And so, I'll stop there. I'm very happy to open up for questions from the floor.

[Operator Instructions] We will now take the first question from the line of Linus Sigurdson from DNB Carnegie.

I hope you good starting with a question on Creditas. And anything you can say about the growth outlook. I mean, Sergio talks about accelerating to over 25% this year. And I think you wrote 25% to 30% plus in your presentation today. how much of, say, blue sky scenario is this? Or rather, how should investors think about the visibility on this number? What are the main moving parts on the revenue side?

Yes. Linus, thanks for the question. And it was good, we had Sergio in Stockholm. It's good to have him out there meeting people like yourselves and tell them the story. He do talk a range in furnace 25% to 30%. I think 25% is level he would think he can achieve and 30% is the level that he wants to aspire to in the current environment. I think you'd rather do multiple years of compounding at these levels, not us speaking for him, but just getting the read from him as opposed to accelerating to 50% to 100% growth given what they did in the past and burning to get there. We'd rather do it on a cash-neutral basis and nice sustainable because that obviously feeds into an IPO narrative where you've got compounding growth that seems logical and forecastable to the market as opposed to higher than loads in those trends. So I think that's the way he's thinking.

And I think if you look at the year-on-year growth of the loan book into Q4, what 19%, 20%, just keep on moving up quarter-on-quarter through the year. You can see how you go 20% plus in Q1. I would like to think we'll see and how that extrapolates. I think the caveat here, lines are everybody is going to caveat everything with global geopolitics and macro. And if that turns or changes, it could change everything everywhere. That is 1 caveat natural. The other is around Brazil and interest rates staying high. And we had our first 25 bps rate cut earlier this year. We were hoping for more, but I understand why the Central Bank of Brazil held a little bit higher for longer, given what's happening in the world and the risks to inflation. And then in Q4 in Brazil, we have elections, which are always interesting to say at least the far left and far right going off against each other, which is the natural order of play.

So it can get a bit noisy a nuance in Q3 into Q4, may slow down before they pick up again. So there's a few caveats here and there. But given everything we and he sees through the business, I think he's confident enough to go out with those numbers and he wouldn't say them unless the things he could achieve them.

That's good color. And then I just wanted to ask on with Creditas and Justpay now at latest transactions, I guess, Konfio will be key here in the next coming quarters and the sort of 2026 story. Could you just double-click a bit on operations and how you think about the outlook for this year in Konfio?

Yes, that's fair. Like I think there's many ways to looking at the first part here, what you said, there's many ways of looking at our -- what's important and what's key for this year. Like obviously, for us, the performance of Creditas, Justpay, Konfio, and that Nido is all key, but we're less likely to see a markup in Creditas or Justpay given that they've just raised even though 1 never knows. So Konfio, I think, is where you're leaning on in that regard in terms of mark-to-model or raising capital.

But to answer your question specifically on Konfio, it is business as usual. They are also accelerating growth like Creditas. They didn't reach the 20% highs that Creditas got to from [indiscernible] No growth at the start of last year. And in Konfio, from memory, got to 15%, 16% year-on-year growth. But there would be any similar trajectory or aspirational category to Creditas in terms of growing the loan book in that 20% to 30% in 2026.

And margins are healthy, and they are cash flow positive on the bottom line, so they're building a bit of cash. So it's nicely self-sustaining. We always allude to the bank license, which is a ongoing process. And we like the fact that they've been given out in Brazil or Mexico to many MS boring entities. We like the fact that Konfio is towards the top of the list, but it's very hard to put a mark on when it happens. But the underlying businesses in root health. And I'd say just tracking Creditas, but maybe 3, 6 months behind in terms of getting to that growth level.

We will now take the next question from the line of Stefan Knutsson from Redeye.

I hope you are well. Just a question on the balance sheet. I see now that at the recent transaction, you are close to have a neutral situation in the net debt maybe your 1 exit away from, yes, being able to be deploying capital again. But just hypothetically, if you were to do another exit, how would you prioritize the capital that you would gain?

Yes. Stefan, it's -- yes, look, there's different ways that we can deploy capital right now and let's be honest, I'd like to get rid of the debt. And I think that's the most obvious thing we shouldn't be funding long-term, long-duration private assets and emerging markets with short duration sector. It serves as purpose, and we're very happy and proud of the Swedish market supporting us with the debt. But we're down to a manageable level that we'd rather pay off, and we don't want our need, I think we may to do that market again in the future. But -- so I would edge towards the prior prioritization of that. And given the small amount of debt that it is, it's very hard to pay down some, but not all. You got to roll it all or you pay it off. So I think it's a little bit binary. So we had a decent other exit probably that, but I don't give me 100% on that.

And then you look at your own shares. It does hurt us. We are shareholders. We work very hard for this company. We see how our portfolio is doing. We report everything we see to the market. We get exits at NAV in the market is what it is. But the market isn't going to reward our shares with that delivery and those exits at NAV plus/minus, we'll just do it ourselves, buy back our shares all day. So it's very hard to look beyond your shares.

So -- the easier to answer in a normal world where I had all the choices you do a bit of both. But given how that markets work, it's probably lean into your debt clearing it before you start to eat away at your shares.

Perfect. And regarding exits, how are you thinking strategically on portfolio concentration, like we have seen you exit a few of your smaller holdings concentrating into the top holdings. Is that the way forward? Or are you also looking to maybe decrease the size of the exposure for Creditas that is over 50% now?

Yes. There's a little bit of strategy here, and there's a little bit of the markets give you what they give you as you try and do a lot of things at the same time. But strategically, we are definitely trying to shrink and focus the portfolio. We don't have a small amount of winning names. That's good for us from the opportunity cost over time, and it's good for communicating to the market.

Within that, I don't mind, I'm very comfortable with concentration once concentration is on quality where I believe it is today. So that makes me sleep well at night, and we'll continue to try and clean up or exit position some smaller names for sure. And then on the top names, they're just constant work streams where we may have done 2 exits from just paying the last 12 months, but they could have easily been Konfil or Creditas or other names, had the market and the opportunity being there at the time. So these are work streams across a number of names that are leading us to a smaller number of holdings, a more concentrated quality portfolio and what excess capital that comes in being delivered to deleverage the balance sheet and buy back our shares at these beautiful levels.

Thank you. There are no further questions at this time. I would now like to turn the conference back to David Nangle for closing remarks.

Yes. Thanks, Andre, and thank you, everybody, as always, for joining us on this call. Very happy with what we're seeing at VEF irrespective of what is a very noisy and volatile world. we will continue to deliver and focus on all the right things, and we'll continue to listen to our investors and our partners as we go and looking forward to talking to you again next quarter. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the VEF Fourth Quarter 2025 Earnings Call and webcast. [Operator Instructions] Please note that today's conference is being recorded. I would now like to hand the conference over to your first speaker, David Nangle, CEO. Please go ahead.

Super. Thank you very much, and good morning, good afternoon all. I welcome you today from Manila in the Philippines, where I'm on the road, seeing companies and looking at some of our investment companies in Dubai for the last couple of days. This is -- welcome to our Q4 '25 results presentation. I do have Alexis Koumoudos, our CIO, with me on this call as per usual. And I'll spend the next -- we'll spend the next 15, 20 minutes just running through key highlights of the quarter and the year, given it is the end of year quarter and outlook for everything that we see at VEF and then happy to answer any questions that you have.

Moving on to Slide 2 in the presentation. It's an evolution of what we've been saying for most of the year. Like the NAV does continue to trend higher. We're very happy. It's a reflection, obviously, of everything in our NAV, which is our portfolio of companies and their performance. Q4 in itself was up a healthy 6.9% in dollar terms and over 22% for the full year, obviously less in SEK, given the SEK strength versus the dollar. But the big driver in Q4 was Creditas, which we'll speak about and its latest fundraise, which came through quite nicely in Q4. But generally speaking, the NAV this year was a reflection of our portfolio, and it's really about a portfolio that the risk reward is much better than it was in the past.

We're majority at, give or take, breakeven and growth is very much back in focus. That's been reflected in our top names like Creditas, Konfio, and Juspay, which is humming along quite nicely at a very healthy clip. The focus in the quarter, and obviously, it's a big part of our story is Creditas, and had a very big quarter in terms of, one, results, it's been coming. We talked about the transitionary period from hyper growth and burn to no growth in breakeven and now they're starting to put the foot back down on growth again, but more sustainable growth at this point in the cycle.

So through the quarters this year, we've seen them get towards 20% year-on-year credit growth, which is driving the income statement. We'll talk about that. And that was key to see those results coming through quarter-on-quarter-on-quarter as we went through the year, and that's key for our value and our future. Also from the Creditas side, they had a number of standout events in the quarter. We already mentioned or touched on the latest funding round, but also they closed the Andbank. They got a bank license in Brazil, which is key for the franchise value and their funding and also made a substantial higher at top level.

And then last point, the whole area of capital, capital management and capital allocation effect. We've, in 2025, very focused on strengthening the balance sheet, exits. We'll talk about that in this presentation coming in, capital coming in, to pay down some debt, buy back some shares. And as a team and as a Board, we're sitting down and strategizing as we look into 2026, how we manage our capital for the best risk reward for our shareholders, both in the short term and to manage that discount to NAV, but also for the longer term in adding new portfolio companies, that's a broader discussion point. Moving on to Slide 3. The key highlights and numbers I've touched upon, of the NAV in dollar terms, up 6.9% and 22.9% for the quarter and for the year, year-on-year. And from a SEK point of view, a healthy quarter of 4.6%, not a lot of currency diversion and up 2.8% for the year. Share price obviously been weaker, flat year-on-year at the year-end and up 3.3% in the quarter.

And on Slide 5, this is a chart we show every quarter and what you're starting to see since year-end '24 is a gradual pickup in the NAV in dollar terms to now $434 million. As I say, this is -- there is a micro level of our portfolio companies, but then obviously, it feeds down from the macro level and the cycle level. Venture capital, capital is in a better place. Capital is flowing. Macro is in a better place. The companies that were invested in quality companies are starting to grow again, and that's feeding through to a growing NAV, which is key, obviously, for everything that we do here at VEF. And Alexis is going to talk [indiscernible] provide slides around the NAV dilution over the year, and I'll come back on some key points before we open up for questions.

Thanks, Dave. Hi, everyone. Yes, just looking at Slide 5, which highlights the valuation approach and key takeaways for the portfolio in the quarter. The main mover there is Creditas moved from mark-to-model in the previous quarter to this latest transaction priced at the $108 million Series G round that they closed in December, which resulted in a $33 million uplift to the NAV. The rest of the top 3 names like Konfio and Juspay remained at mark-to-model and latest transaction, respectively, which results in the portfolio being valued on 69% at latest transaction and the remaining 31% of the portfolio being valued on a mark-to-model basis. And of those 31%, 90% plus of those mark-to-model valuations reflect multiples further down the P&L, i.e., like below just the revenue multiple.

Moving on to Slide 6. So on Slide 6, we just break down the NAV evolution in the quarter, and we show the breakdown of that and how it's attributed to different factors. So the biggest part of NAV growth in the quarter is attributable to Creditas' round and the impact of that round on the valuation of the company. In the portion of the portfolio that's mark-to-market, you can see the slight positive portfolio growth was partly offset by the market pullback in the quarter. So the holdings that are valued at mark-to-model had a relatively neutral impact in the quarter. Just on to Slide 7. So -- in Slide 7, we show an aggregation of the NAV evolution over the year and how the different parts or the attribution to that over the quarter. So overall, in 2025, we saw a strong contribution to NAV growth from portfolio performance, the market performance through comp multiples and also strengthening non-USD currencies. And importantly, we also converted $37 million of our appreciating NAV to cash, which shows up in that net $18 million positive cash position over the course of the year.

So in aggregate, there was $81 million of positive NAV evolution. As Dave mentioned, that was 23% year-on-year dollar NAV strengthening. And on a per share basis, that's 26% year-on-year once you factor in the buybacks that we did over the course of the year. And then just on Slide 8, we use this slide to just reiterate our -- how we continue to feel confident in the strength of the portfolio, the fact that we have a portfolio that's growing 25% to 30% year-on-year on a self-sustaining basis. And Dave will -- a lot of that is driven by Creditas, and Dave will get into some of the details of that in the preceding slides.

But we're also feeling confident that there's been a change in the environment, far more fundraising activity in our markets. It's definitely heating up, and there's been a flight to quality, which has benefited our portfolio. And we expect to see rounds like Creditas and Juspay to continue to take place and continue to benefit our portfolio and help us improve our liquidity and balance sheet. So handing back to you, Dave.

Super. Thanks, Alexis. Look, I think from a portfolio point of view, as Alexis alluded to, what's key is that you invest in quality companies and you've got a through cycle performing portfolio. And that's what we're starting to prove out having gone through the boom years up until 2021, the VC winter of '22 and '23, where we reevaluate our portfolio and set a valuation mark lower and then the recovery and the growth that we're seeing in 2025. So you get to -- you invest in these companies, you live with them through cycle, you see them in the up and the down cycles, and that's how you build longer-term value. So we're very happy with the overall portfolio where it is. And we do have tailwinds from an ecosystem, VC capital flows, valuation point of view, all very helpful to what we do. Specific to us, obviously, is Creditas. Creditas performs. It's a big part of VEF performing, as we all know.

And 12 months ago, these numbers weren't what they are and what you see today. And this is what we said the management was going to do, and they are delivering, and we expect that to continue into 2026 and beyond this year. And what you have is an improving growth profile at a very managed risk-reward basis as they manage their cash flows on a neutral basis. And in Q4, we'll get to about 20% year-on-year loan growth. Revenues are following that growth. And that's key for future value of Creditas as it looks to be, at some point in the future, a public company with real value needs to start growing again, that engine has really kicked in. As impressive or as important is the -- what they're doing from an efficiency and cost point of view, enabling AI tools across the business, and you're starting to see that efficiency gains kicking in. So you're not just getting growth, we're getting more efficient growth, which is the future of this company and the industry as a whole.

Besides the numbers themselves, what is key for Creditas in Q4, all these things kind of came at the same time, but they've been work in progress for quite some time. One was obviously the announced Series G funding round, $108 million coming in, and we spoke about that in Q4. The bank license itself was approved in Q4, and that's key, lower cost of funding, more availability of funding and a franchise uplift for the overall business and its optionality going forward. And in the top team, Ricardo Forcano came in from formerly a BBVA Group, top management. It's the type of caliber of top management that the company is now attracting, not wasn't attracting, but it is on the front foot, and that's the kind of talent that comes with that. So it's kind of like an ABC trade. So I think from all aspects of Creditas, we're very excited as we look at the company where it's positioned, the tailwinds that it has, capital position, economics, et cetera, as it goes into '26 and '27.

And besides Creditas, I want to talk about cash exit capital. What's key is we're always looking at our cash and capital position and our balance sheet strength, and then we're making -- looking to make logical decisions around that positioning. At the same time, we're very focused on the short term, more so in the past and now transitioning as we balance, obviously, short term is important, but start to look at the medium to long term for VEF and for all our shareholders. From a cash position point of view, we had $15.9 million of cash and liquid assets at the end of Q4. And that's -- our balance sheet is stronger than it was in the past. But what's key is we paid down half our bonds, but we still have $26.1 million of bonds outstanding. So we're in a negative net cash position, and those bonds are due at year-end '26.

So any kind of decisions that we make has that in mind. And that's a kind of a cash liquidity risk management overlay to everything we do. When that capital started to come in from the exits we did last year, the initial allocation was obvious, pay down some debt, start to buy back your shares. Now that we're net negative on cash, we balance that with how we look to more cash coming in and also thinking about the future and looking at pipeline and balancing all that into a broader strategy. That's all a work in progress at this point in time. What I will say is the key to all of this and us having the tools or the ability to do more as in pay down more debt, and we do aim to go debt 0 by year-end. That's one of our inherent goals.

We do have options around rolling the debt, but the plan is to buy back more shares and then put capital to work in new pipeline companies, Key to that is capital in and key to that as exits. We had a very -- off the back of promises to investors, we had a very healthy last 12 months in delivering exits, which are hard in our industry, and we delivered 3, as I said before, in India and in Brazil via IPO, via M&A and via secondary sale, the biggest and the most juicy of which was Juspay, about $37 million of gross proceeds came in, in the last 12 months. We look at the next 12 months, and we're fairly confident that we will see more exits. We're working on the number. By no means is a VEF wind-down vehicle, but we're taking our opportunities to take capital off the table at NAV plus/minus in our companies to bring that money in, and that strengthens our balance sheet, puts us in a stronger position. And with that capital in play, then we have the range of decisions to make and actions that we took like we did in 2025 around debt and -- around VEF debt and VEF equity.

I think this whole ideology is just keeping the market updated on how we're thinking. We haven't set anything in stone at this stage. As I say, a lot of it is around our capital strength with more capital strength, you can make more decisions and what's the priority. There's more capital you have, you can prioritize different things for both short term and long term. But bolstering the capital position is key at VEF, bolstering our balance sheet. We want to be a strong investment company with optionality of capital. We've paid down half our debt. We would like to go debt-free by year-end. Narrowing the trade discount has not gone away as a concept. We're all shareholders. We value our shares and narrowing that discount is a key part of anything we do. We cross-reference that with our cash capital position versus our -- what money is due in the bond markets. And then we're starting to gradually overlay that with the future and the future growth of VEF because we look at our portfolio, we look at Creditas, Juspay, Konfio, we look at the past of Tinkoff, EasyGo.

We know we have the muscle to invest in best-in-class fintech companies. We know those companies compounded value, and we know we can realize that value for shareholders as we've seen with Tinkoff, EasyGo and more recently with Juspay. So balancing that long term with the short term is all part of the strategy that we're doing at the moment, cross-reference with the capital position we find ourselves in today. And just to finish off, so the broader investment case, and this is very similar to last quarter. We keep on saying it's about the portfolio. Any investment company is about its portfolio. And I think we have proven through cycle that we have a quality portfolio that our investment radar is good and that names are now starting to break out then in terms of growth, profitable growth and they're raising fresh capital. So we're in a as comfortable and as positive position as we've been for a long time in terms of the quality of our portfolio. And that's the basis for value creation and growth.

Then you've got exits. Exit markets are back, but it's hard work to exit. We're proving that we can exit our positions and we can exit them at the right price. There's been no fire sales, nothing forced at the door, the right exits at the right time at the right price, strengthening our balance sheet. Then you've got questions around capital allocation. And we look to win the near term as well as the long term and put that capital to work in the most value-added way. It was paying down some debt, it was buying back some shares. And now while we're in a negative net cash position, we sit back, we strategize as and when the next capital comes in, how do we allocate that.

And then we're debating the short term versus the long term because it's very logical given our track record of investing versus the very short-term obvious traded discount playbook of buying back your shares. We get that. We're very cognizant of that. And within the pipeline, we are flexing that muscle again. We are seeing best-in-class EM fintech companies around the world. We are excited about names that we could potentially bring into our portfolio. We need to cross-reference that around, A, our capital position; and B, the opportunity to create value for everybody involved by our shares and obviously delevering our debt. I will stop there. And operator, very happy to open the floor to questions at this stage.

[Operator Instructions] We are now going to proceed with our first question. And the questions come from the line of Linus Sigurdson, from DNB Carnegie.

And starting off with a question on the Creditas raise. If you could just walk us through maybe some of the details and how this has affected your ownership stake in terms of dilution?

Yes. I think last part first, from an ownership point of view, we broadly own what we did before. But there was a lot of moving parts to that in that the round itself was led and underwritten by Ann Bank, who's a key investor in Creditas. And so the capital came in. But there were a number of notes outstanding convertible notes of which we held from previous round back in '22 and '23. So they converted at a discount to the overall round price. So net-net, we still own the same -- sorry, approximately 9% of Creditas. It didn't move that much given the mechanics and the math of the round. And then from a valuation point of view, there was obviously the headline valuation, but we value Creditas at the convertible note, the discounted notes just to be conservative and in line with our most recent effective capital in.

That's very clear. And then a question on Juspay, which you saw putting out some numbers a few months ago. And just any updates on how they're tracking along? What should we expect for 2026? Should we see some moderating momentum? Or is this going to continue to compound in the same way?

Yes. Alexis, do you want to grab that?

Yes, Juspay continues to execute well. So I think in -- for the calendar year of 2025, the company grew around 40% top line. We are forecasting the company expects to grow like at a similar pace this year. I think the big variables within that are as they -- last year was about planting seeds in international markets, and this year is about seeing those seeds like really thrive and start to contribute to the top line. So I think some of the variability about them being able to deliver 40% or maybe more will come from their success internationally. And so far, we're feeling pretty strong. There are some large signed contracts, which can be quite juicy and fruitful. But yes, I'd say 40% to 50% top line growth for '26 similar to '25.

Yes, Linus, what you have is, you've got the -- the top 3, you've got names like Creditas and Konfio that are coming back into their own and starting to compound back into that 20% plus growth zone. And they can easily go to 30% given the markets are in the TAM. But Juspay has been compounding at a healthy clip through that cycle. So -- and we do expect a healthy year again next year.

I appreciate that. And then my final question was just double-clicking on this near-term capital allocation. How we should interpret those comments on balancing? I mean, should we think some new smaller exit before buybacks are resumed at scale? Or is this something you'll be starting in the near term?

Yes. No, look, it's a very fair question, and we're not ignorant to the share price. And we -- what I'd say to you is we're making no firm statement today, and that's not hiding behind anything, but it's very clear that we need to manage our capital position given what we need to outlay at least on paper from a debt point of view by year-end. And that was a very cognizant management and Board decision when we stopped the buyback as in let's get the balance sheet to a more comfortable position for everybody involved. We are comfortable on line of sight of exits. We would like to see those exits coming in. Nothing is guaranteed. But as they do and the capital position strengthens and you go net cash positive, then you have the decision tree, whether you keep the capital to pay down your debt. Is that the most important thing in an ever-changing environment, that may be more important than buybacks.

And then you cross-reference that with the clear IRR that you have in buying back your own shares as well as the indication to the market, which is very positive. And then you start to cross-reference that with the long-term value when you see some awesome fintech companies like the ones we've invested in the past that we could potentially add to the portfolio. Now we're trying to get all our ducks in a row. And we're being -- I think we're being maybe overly transparent and communicative with the market about how we're thinking as opposed to just finishing our thinking and putting all down on paper. But I think that we respect the market enough to share as we go. I think we've always done the right thing for long-term value for shareholders. We can't control the share price. That's very clear. But I think to your point, Linus, I think more capital in gives us more comfort to do more across all areas of capital deployment.

We are now going to proceed with our next question -- and our next questions come from the line of Stefan Knutsson.

Firstly, on geopolitical situation in South America following like the U.S. operation in Venezuela, have you seen any impact on your business or any increased risk that you foresee going forward after this development?

Interesting. Not really in the specific context in a global context, clearly, there's a lot of moving parts geopolitically and U.S. is at the forefront of a lot of them. And these are unpredictable. We wouldn't expect anything to happen in any of our investment countries in Latin America or elsewhere similar to what happened in Venezuela. I think it was a very specific case in point. And obviously, we like the event. We like the outcome of the event, but the event itself and the nature of it was tricky, let's say the least. But no, I think from the landscape in Latin America, the markets that we look at Brazil and Mexico haven't been touched really by that.

And we talk to a lot of global investors who invest in emerging markets in LatAm. And even to other markets like Colombia, Chile, et cetera, we haven't really seen any impact. I think there's a very specific excitement around the potential for Venezuela off the back of what happened. But it's a country with many possible -- lots of potential and many possible future scenarios. So I think removing bad leadership is only the start, but then the pathway, there's a lot to work on there. But no, we've seen no negative outcomes or volatility or risk to any of our countries. This is all within the domain with a very fluid, noisy global geopolitical kind of environment, much more than it was in the past.

Yes. And then I think like most of the questions was answered by Linus question, but maybe if you can share any operational update on Konfio and how their banking license application is going.

Yes, that's fair. It's been overweight Creditas communication in Q4. And obviously, Juspay Alexis spoke about Konfio did very similar results to what Creditas did in terms of top line growth, loan growth and top line growth in the 20% bracket, albeit it wasn't the upcurve that Creditas had quarter-on-quarter through the year. It was more sustained through the year. It is a bank that can do a lot faster growth and Creditas can be the same given the TAM that their environment in. So an easy do 30% growth plus as we look into 2026. I don't think it will start off that way. I think it will -- Q4 is generally faster than Q1, so it really picks up.

Margins are holding steady and tight. They're cash flow positive, have a strong cash position. And on the bank license, we'll see. It's one where they're position that we said it before, I think as a Konfio is planning life without a bank license, albeit we know the benefits of a bank license. So very clear that it's in line to get one. Just when you're talking about regulators and timing, it's always a risk. The upside is clear. Like Creditas getting its bank license in terms of funding costs and franchise value. But we're comfortable it will get the banking license. We just wouldn't like to put a time on it because we've been there before with regulators and bank licenses and these things just take time. But the good thing in Mexico is we have seen bank licenses being handed out. So it's something that is and has happened. So it's not like it never happens.

We are now going to proceed with our next question. And the questions come from the line of [Tobias Carlsson].

And I have 2 questions. The first one is about -- that I can read in your report that you underline that you want to make new investments. And I wonder how you're going to finance them considering that you also want to reduce the debt and perhaps also buy back shares. My second question is if you intend to try to reduce the discount to net asset values as it's 50% right now.

Tobias, thank you very much for the questions. And I think our sharing around our direction of travel has been bigger picture and broad as opposed to specific. And we didn't mean to mislead our investor base in what we're doing. We are an investment company. We are working pipeline. We are very keen to get best-in-class fintech companies around emerging markets into our portfolio. It's been part of our muscle and our job for the last 10 years. So when I say we've been building that muscle again, we've been out there looking for these best-in-class companies. And that's part of our job.

At the same time, when we looked last year and the year before, it was a very clear priority around strengthening balance sheet, getting capital in, putting capital to work where it was most clearly needed, delevering, paying back the debt, and that's there still as a goal for this year. There are 25 million plus/minus to go. And clearly, to buy back shares is part of the IRR given where VEF shares currently trade. What we did was we paused effectively in Q4 of last year around the buyback and touching the debt for now because of our cash position going lower than our debt that was due at year-end. And we wanted to continue to strengthen our balance sheet. It's a general top-down statement where we are looking to transition to going -- to getting VEF back on the front foot investing. The debt still is very much there. It has to be paid. It will be paid.

Our shares do trade at a deep discount to NAV. And there's many ways of delivering, closing that discount to NAV, and we have been working, focusing on communication, Investor Relations. We bought back some shares last year, transparency for our bigger companies, exiting our positions at NAV plus/minus to prove that our NAV is real. We continue to work that mandate. So there's many ways of attempting to -- we don't control the share price, but attempting to decrease that discount to NAV. And it's in our interest as much as all shareholders' interest to have that discount lower if even nonexistent. That is part of our short-term, medium-term goal. We stopped doing everything for now until we get the capital in, and we're just strategizing around these things. And there will be a priority depending on how much capital we get in, what pipeline companies we see, the IRRs in those pipeline companies versus IRR and our shares versus buying back the debt.

So I think it's all just there. I think our track record last year was buying back shares and paying down debt. We're just talking about the 3 different aspects and saying we're ready to go on all. But with $15 million of cash and $25 million of debt, we just paused, took a moment, strategy discussing and we're going to -- we're really focused on the exits because with more cash, we can do more things. So it's -- that's on balance sheet. We're also looking at potentially doing off-balance sheet structures.

We can use our investment muscle, our ability to find, underwrite, get allocations, best-in-class fintech, but do it off balance sheet by potentially SPVs. So it doesn't have to be A, on balance sheet. It can be B, off balance sheet, which doesn't touch VEF, but can benefit VEF in terms of fees, carry and different ways. So we're just looking at all of this. We're discussing it internally. We're positioning ourselves. Maybe we're opening too much to the market, but I'd like to share as we go. And I'd like to listen to the market and the market speaks very clearly, we take all that on board and we try and make the right decisions as we go.

We have no further questions at this time. So I'll now hand back to you, David Nangle, for closing remarks.

Yes. Thank you. Look, thank you, everybody, for following us, for the interest in our story and our stock. We have people coming in asking questions by e-mail. And otherwise, we will come back to you for sure. We're very happy with where we're at in terms of our portfolio. That's key. You can't do anything with a strong portfolio. We're very happy where we are in terms of cash generation and delivering exits. If not every investment company that's in a position like us being able to do this, it puts us in a strong position. And then we're very clear and maybe overly leaning in around our thought process around what we do on capital allocation as we look forward. Watch this space. We'll be more clear as we go forward as capital comes in, but we're listening to the market as well as trying to make the right decisions for VEF, both short term as well as long term. But thank you.

This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.

Good day, and thank you for standing by. Welcome to the VEF Third Quarter 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Nangle, CEO of the company. Please go ahead.

Thank you very much, Heidi, and good morning and good afternoon, everybody, and thank you once again for attending our results call this time for Q3 '25. My apologies to our investors and followers in the U.S. We started a bit earlier this time around, but can't be helped because of travel plans. But thank you for dialing in nonetheless.

Going straight into -- and joining me on the call, as per always, will be our CIO, Alexis Koumoudos, who will join us for the valuation section and portfolio update. But going straight into the deck, going to Slide 2. And I guess just events of the quarter, but more really areas worth highlighting from today's release and what we're seeing, and it's really fourfold.

One is NAV continuing to trend higher. It shouldn't be a surprise given the capital market trends, macro trends and everything we're seeing, but we're also seeing it through the prism of our portfolio. We ended the quarter at nearly $406 million of NAV, up 8.3% quarter-on-quarter and nearly 15% year-to-date. And that's just a nice supportive trends from markets, multiples, FX. But most importantly, it's really around the portfolio, which is now in a -- I like to think of it as a lower beta mode, breakeven, reigniting growth, better risk reward, and that's feeding through to the numbers that we're seeing in the portfolio that come through every month and every quarter as we see it.

Point two is around Creditas. Clearly, our largest holding still in the portfolio. Two aspects on this, one fundamental to its performance, this reacceleration of growth that we're seeing in Creditas. It's not V-shaped, it's U-shaped. It's gradual. It's picking up. We're seeing the loan growth year-on-year from Q1 at 11%. It was very little year before year-on-year to 14% in Q2 and picking up again in Q3, given everything we see at the company. But then you cross-reference that with quality fintech companies attracting capital. And Creditas just announced its latest bond closure, raised $50 million senior bond, 10.5%, 3.5-year bond, but also made an announcement, a very high-level announcement about a month ago around a planned equity round of about $100 million -- minimum of $100 million at an indicative valuation of $3.3 billion. So it's an early high stage or high-level announcement that will be followed up upon, which we obviously press released, but it's just a sign that quality fintech companies are once again attracting the right kind of capital.

Point three, and this kind of touches on the first two points is around fintech markets. They just are strong at the moment, and this is capital markets into fintech markets, and this is capital flowing in as well as capital flowing out. I think everybody grabs on the high-level announcements around Klarna IPO or Chime IPO in the U.S., and that's what grabs the front page of the financial press. But within our world and within the broader fintech ecosystem, we're seeing a lot of capital flowing into companies across early to late-stage rounds once again. So we're getting back to healthy capital inflow markets as well as capital flowing out, not just with IPOs, but also M&A and secondaries. And we see that in our portfolio, and there's plenty of examples, and it's just coming through from the broader ecosystem.

And point four, the final point, not on this slide, but it's really around pipeline. This is an area that we're really spending more and more time on. We're getting more focused on a select number of quality EM fintech targets and just positioning ourselves and our shareholder capital for the right moment with the right asset at the right time to put the next Creditas [ EasyCo ] into our portfolio to work for medium- to long-term value accretion for all.

Moving on to Slide 3, just a quick highlight on the numbers. As I said, from a dollar point of view, we tend to focus on NAV. Total NAV, we're now back over $400 million, given the performance year-to-date, $405.7 million, up 8% quarter-on-quarter, as I said. And from a SEK point of view, on a per share basis, we end the quarter at SEK 3.75 NAV per share in SEK terms, still trading at a fairly robust discount to that from a trading point of view, but that is starting to close in the markets.

And finally, from my side on Slide #4, just a general path since inception of VEF and our NAV, not NAV per share, but overall NAV. And what we're seeing is an evolution of what we've been talking about for the last few quarters, mainly at the back end of last year, we talked about the reset and things starting to grow again, macro, micro factors working nicely in our favor. And that just gets reflected in your NAV as you start to grow again, and then that happens to feed through to share price and your market cap. And in markets like this, the discount tends to close as well and all kind of works in a nice manner once the trends continue.

I will stop from my side at this point and come back at the end, but I'm going to pass over to Alexis, our CIO, who's going to talk you through some of the valuation moves and approaches we had in this quarter and some of the detail behind that. Alexis, over to you.

Great. Thanks, Dave. Hi, everyone. Yes, just running through, I think, the major valuation approach and changes in the quarter. I think the biggest change in the quarter is really Konfio that had been marked at latest transaction for about a year. And we rolled it into a mark-to-model valuation methodology now. And that was a big contributor to our quarterly -- our quarter-on-quarter NAV change. Another driver, as you can see on Slide 5, being Creditas. Overall now, with Konfio joining the mark-to-model portion of the portfolio, the mark-to-model methodology accounts for 79% of the valuation methodology for the portfolio and 21% is now valued at latest transaction.

And yes -- moving on to Slide 6. So on this slide, we just break down the third quarter NAV evolution. And you can see there are three big contributors to the quarter-on-quarter $31 million growth in our NAV. The first and biggest is the portfolio company performance, which contributed around $20 million in the quarter. The second -- and that's a factor of our portfolio companies growing and executing on their business plans. The second is strong equity market performance and the impact of it on our comps for the mark-to-model valuation methodologies in the portfolio, and that contributed $15 million. And with the further appreciation of the Brazilian real and the Mexican peso in the quarter, contributing another $6 million or so. And that -- there are some small like offsetting factors like our OpEx and coupon payments here. But all in all, those were the biggest drivers in the $31 million quarter-on-quarter growth in our NAV.

Moving on to Slide 7. Because of the size of the change in Konfio valuation, we just wanted to walk you through the key contributors to this and why there was a 39% uplift in Konfio's valuation quarter-on-quarter. And there are three key components to this. So first of all, we have the company growth. What we've broken out here and shown is Konfio's loan portfolio has grown 30% year-on-year from August '24 when the last transaction happened to August this year. And then we've broken down some of the key comps that we use for Konfio here. And you can see that there was broad appreciation over the year that Konfio was held at latest transaction in share price and therefore, valuation of the comps. I think the biggest portion of that gain as well was felt in the last quarter where a lot of these stocks performed pretty well. Then the third component to it is the peso appreciation over the year. The peso appreciated 7% versus the dollar over the year. And when we stitch these together, these elements combined with the outlook that we have for Konfio and the business plan that we keep, this results in a 39% uplift over the course of the year for Konfio.

And just moving on to Slide 8. So to reiterate, we continue to feel confident in our high-quality portfolio and its ability to compound from here. We see our portfolio growing around 30% year-on-year from a profitable and self-sustaining base. And Dave is going to talk a little bit about Creditas' reacceleration in an upcoming slide. We also definitely feel that we are entering a new cycle, as Dave alluded to at the beginning of the presentation. We're seeing a real pickup in fundraising activity across our core geographies and ecosystems with rounds like Creditas' upcoming that are taking shape. And this increased interest, we feel will definitely benefit our portfolio. Handing back to you, Dave.

Super. Thanks, Alexis, for that. Moving on to Slide #9. Just to focus on Creditas because it's been a busy year-to-date in fairness for the company. But I think on a fundamental point of view, this whole idea of reigniting growth is nice to talk about, but it's actually great to see in the numbers. And I guess -- when you talk about reigniting growth, there's elements of the market and people expect a V-shaped recovery, you go back to strong double-digit growth from no growth. But what you're seeing here is a gradual U-shaped recovery in the trends as the machine starts to reignite the lending machine, the underwriting process, which is great because there was a real focus in the years of 2022 and 2023 of efficiency of margins of asset quality of getting to that breakeven point and that sustainability point.

And then you switch gears and you balance a better risk-reward model. And you're seeing the year-on-year trends on the top of the slide, the loan portfolio year-on-year trends on a quarterly basis, going from 1% year-on-year to 7% to 11%, 14%. That's a very simple, clear trend. And we see it once again going that feeding through to Q3 of this year, given the data that we're seeing on a monthly basis. So it's a nice trend. It's a gradual trend, getting to 20% to 30% growth level that Creditas feels is a sustainable level if compound at a cash flow neutral positive baseline as it moves forward over the next couple of years. And the revenues obviously feed off that balance sheet growth.

And then the flip side of that or linked to that is capital does tend to flow towards companies that are performing in better environments and Creditas is no exception of that. They've just closed another bond, $50 million Eurobond, quite nice to see them closing that. But obviously, a month ago, they did, as I said at the start, they announced the planned fund raise, $100 million, indicative valuation, $3.3 billion, which they believe is coming their way. We keep that very high level until things are firm and concluded. But it's very clear that we welcome any fundraise, debt equity that strengthens Creditas' capital position. It's good news for the company. It's good news for us and where the company is growing. And when all those details become firm, finalized, we will clearly communicate them to the market, a; and b, reflect them in our NAV.

Moving on to Slide 10, just getting a little bit more micro on these healthy markets. And one can't go too far on overdoing how healthy they are. But just versus 2022 when the music stopped in 2023 when it was tumbleweeds, there's just been a gradual pickup in activity through '24 and '25 across. We see both sides, private, public entries, exits. We see it in emerging. We look at developed for lead indicators. But in emerging, the benchmark -- we play a lot in Mexico, Brazil and India. There's a lot of strong double-digit million and triple-digit million fundraisers happening across benchmark fintech names, of which some of ours are benefiting. We talked about Creditas just now, but also Juspay earlier this year. So our portfolio companies are benefiting with capital coming in. It also helps us with capital going out. We did a bit of secondary in Juspay.

The IPO markets are very healthy -- getting healthier, sorry, in the U.S., and the U.S. tends to lead and the world tends to follow, albeit India has been healthy and we IPO-ed BlackBuck in that market. But we know there are a number of companies getting ready for IPO across a number of scale emerging markets following the U.S. lead. So these are just good trends, capital flowing in and out of the industry is good for our business and for our companies and what we do on a kind of a macro bigger picture level.

And then Slide 11 before I wrap up. And just the whole cash and balance sheet, we've been keeping the market up to date on this. I think we've been very focused on getting cash in. We've been talking a lot about it through '24 into early '25. I think the three exits we did, which we've talked -- maybe over talked about at this stage, has put us in a very solid position from a balance sheet point of view and from a debt leverage point of view. We ended the quarter with $17.6 million of cash on balance sheet. Our debt position after paying down approximately half of our debt earlier this year is just over 5% of our NAV at $25 million. So we're in a very comfortable debt position.

And we've also used the opportunity year-to-date to be buying back our shares when the discount actually touched nearly 60% at one point. It was just the most obvious thing to do with our capital. We bought back over 2% of our shares, about $5.3 million. So it's been a good exercise in capital in delivering exits, delivering the NAV and then the most logical capital allocation tools as you work through your debt and deleveraging, buying back your shares. And now we're into a -- it's nice to be getting to a point where you can sit back and have a good healthy debate at team and Board level around capital allocation strategy, where we're going from here with the next incremental dollar in, cross-referencing our debt position, which is a lot lower, our equities, which is the discounts closing with the pipeline that we're seeing, and it's a much more robust debate as opposed to one dimensional obvious, we'll pay down our debt, we'll buy back our shares, then we'll get back to investing. So it's a nice evolution of that.

And finally, just to wrap up, pretty similar to last time, and we are a beast of consistency, but we try and do that and then we tweak as we go. Look, it's always been about the portfolio. We talk a lot about Creditas, Konfio, and Juspay because they dominate, they're over 80% of our NAV. So it's natural we do so. And the reigniting growth we're seeing at Creditas and Konfio is clear. Juspay continues to compound at a healthy level, and hence, it was able to raise capital earlier this year, and we were able to take money off the table. And fresh capital is coming into our company, which is great.

But there is a number of companies coming through. And maybe that's a point for next quarter's update. I alluded to companies like Abhi growing triple-digit percentage growth in a lot of its key metrics, and is a company that's doing exceptionally well in Pakistan and into the Middle East. Rupeek gold lending in India is getting a very strong tailwind from the gold price and its core business. Juspay, which is solar panel ecosystem distribution into lending, and is producing record results month-on-month for August into September, and it's feeling very good about itself again. So a lot of this is macro markets, capital trends, but then it feeds into the micro level delivery and it spits out results. So maybe that's one for next quarter. We get a little bit deeper into behind the big three, which we tend to overfocus on.

I think the exits we've done so far over the last 12 months have been good. We have no pressure to push anything out the door at the wrong price. We do have offers for different names as we go, and we're selective in what we do, right asset, right time, right check, right price. And we're pretty confident that we could get more out the door in the next 3 to 15 months as we look ahead.

And capital allocation has become a broader debate of what is the next most important thing. I think it's a healthy debate, but quite obvious, we've been doing the most obvious next thing with our debt into our equity. And it's just nice to be in a capital comfortable position with options on the table, and we'll continue to do what's best for shareholders, both from a short-term value accretion point of view, but obviously a long-term growth point of view. And that kind of touches on pipeline. And this is probably one of a bit like some of the smaller names in our portfolio, which is worthy of a slide or 2 in the next time we give an update. But pipeline work is getting a lot more focused.

We're enamored by a kind of very focused number of fintechs that we've been very close to over the last 3 to 5 years, tracking them and scale in emerging markets, staying close to the founders and their shareholders, watching them trend positive as they come out of the last cycle. And we're just positioning ourselves as we have always done in the past to make sure that we are a capital allocator of choice for best-in-class fintechs who want capital to be with them for their next part of the journey. So these are healthy work streams, debate that we're having at the moment, but it's taking a lot more of our time as we go. But I will stop there and maybe, Heidi, operator, if you want to open up to any questions there are from the floor.

[Operator Instructions] We will take our first question, and the question comes from the line of Linus Sigurdson.

Starting off, is there anything at all you can say about how the capital raise for Creditas is progressing? And just on a high level, any indication on what we should expect in terms of a timeline around a potential outcome?

No, look, it's the right question to ask, and I'd do the same if I was in your seat. And we're a little bit or a lot restricted in what we can and can't say for obvious reasons. I guess what I would say is that they wouldn't have made an announcement unless they thought it was real, and then we wouldn't have followed up unless we thought it was real. So that's just probably point number one. And timing is just difficult. It's difficult because these things can take time because there's parties involved and there's structuring and the legals. But I guess the indication that they actually felt confident enough to put it out there in the first place would give you the shorter than longer feel in terms of timeline.

Okay. That's helpful. And then my second question was on Konfio. You mentioned how the comp set has come up mainly in the last quarter. But can you say anything about how operational momentum has progressed sequentially throughout this past year?

Yes. No, that's fair. And obviously, the core delivery of these companies is key for them and for us. And actually, the reason I called a little bit earlier is I'm off to D.C. for a Konfio Board meeting. So we're doing a good session there with all key shareholders in place. But now they started off the year super strong. Loan growth really picked up. So whereas the kind of Creditas performance has been a gradual reacceleration and Creditas is clearly more transparent in its information. So I guess I always apologize when we can't show what we want to show. Konfio front-loaded a lot of its growth in the first half and it's slowing a bit now. But overall, we're probably going to end the year in a very similar outlook for Creditas and Konfio where they both end up in that 20% to 30% credit growth for the year.

Margins are holding strong. Asset margins at about 50%. Pricing is not under pressure in the market that it's playing in. And it's getting more and more efficient on the cost base. Actually, Konfio is probably one of the more impressive companies in our portfolio with use and impact already of AI tools, and it is cash flow positive. So it's building a little bit of cash.

One focal point, and we've talked about this line before, and it's been something that I've talked about for a number of quarters is around the licensing, the bank license application, which is very clear and transparent for Konfio and will be a fundamental game changer in terms of franchise value as well as a cost of funding game changer in terms of how they fund themselves. That's just an ongoing process. For me, it's a when, not if scenario. I'd like to think it's in the bag by year-end, given what we've seen with other fintechs like Revolut, [ Plata ], there's been a number over the last 2 or 3 years who have been received their banking license. And I fully believe we're next in line.

But I hate to put timing on these things because we get them with regulators. So I think operationally, directionally positive, a bit like Creditas, albeit more front-loaded for this year anyway, next year will be different. And then regulatory rise and fundamentally to the valuation of the business and where it's going, the bank license is the key.

That's very much appreciated. And then I wanted to ask on your other investments line in your NAV keeps getting larger. And is there anything you can say about the general direction of travel in that end of the portfolio in terms of operating performance?

Yes. No, like I alluded at the end of the presentation. What we'll do is we'll do a session in the next results deck where we get into some of the names beyond the top 3 because even though the top 3 dominate over 80%, there's still a big state that's not the top 3. And there are names like Abhi. It's really growing exceptionally fast. It's the only fintech in Pakistan with a banking license, which gives an exceptional position to enable growth and value creation, but it's also doing very well in the Middle East and the interaction between the two regions. As I said with Solfacil, the solar lender and ecosystem play in Brazil. Once again, their trends are picking up very strong, strong double-digit growth in that name.

And Nibo is another one I didn't mention in the accounting stats from software like [ Fortnox ] for Brazil, we're seeing this kind of 30% to 40% compounding profitable growth now, albeit from a small base, don't get me wrong because these aren't scale like Creditas. And so there's -- it's -- I mean there's some which are going less exciting in there, as you would expect. But it's -- I think we're going to see some breakout names coming out of there into the top end of the portfolio that we'll be highlighting a more consistent basis as we go forward.

Okay. And then my final question, could you comment anything about how you think about exits near term in terms of should we think more like full sales or more like your partial exit in Juspay?

Yes. No, that's fair. We think about it a lot. And what we've learned -- you learned a lot doing this over time, but you should always be trying to exit. You should always be looking for the dollar in and you should owe -- and you're not forcing anything, but it just should be constant. So we have a number of work streams and people owning those work streams across different areas, M&A, IPO, secondaries and across key individual names. And more likely than not, it will be slicing of positions like what we did with Juspay. So you stay in the game of company X or company Y. You take a sliver off the table, $10 million, $20 million of top 3, for example. And as you go, as they raise money or somebody leans in versus a wholesale exit of a company. So I think historically, people tended to think about exit as your IPO or maybe your M&A.

What investors are getting more and more comfortable and used to is that the secondary market for private companies is becoming a more real thing. We're seeing obviously daily flow in big global private companies like Stripe, for example, and SpaceX, there's daily markets in them. But that trend and theme is actually flowing down to smaller markets, emerging markets and smaller stocks, albeit it's less liquid at the gray market, but it's more and more happening. And doing them around events when a company is raising like Juspay did this year, it's easy, but around that, there's a lot of conversations going on constantly. And that's also from the shopping and the investment side.

So when there's -- when we're looking at a pipeline of 5 companies or 10 companies, yes, you're waiting for the next fund raise to be part of that lead it or be part there in. But in between funding rounds, there's always areas where you can clean up cap tables, buy secondary and buy employee shares, the founder might want to take some money off the table. So it's becoming a much more intricate area of capital in capital out as opposed to the plain vanilla Series A, B, C, D is the way in, and M&A and IPO is the way out.

There are no further questions. I would like to hand back for closing remarks.

Super. Thank you, Heidi. Look -- and thank you, everybody, for dialing in at a slightly earlier time this time around. We're pretty happy where we're at from a business point of view year-to-date and how everything is going, but there's a hell of a lot more work to do. We're quite excited. We're working hard. And it's not just the short term in terms of what we're doing with the exits, the buybacks, to pay down debt, but it's also reigniting growth in our portfolio companies, but also in our pipeline engine for putting more capital to work in the medium term into the next-gen winners at VEF because -- we're 10 years old or young at this stage, but we're looking forward to the next 10 to 20 years of doing more of the same, but obviously bigger, better, faster. So thank you very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.