Artisan Partners Asset Management - Earnings Call - Q4 2018

Transcript

Speaker 0

Hello, and thank you for standing by. My name is Chad, and I will be your conference operator today. At this time, all participants are in a listen only mode. After the prepared remarks, management will conduct a question and answer session and conference participants will be given instructions at that time. As a reminder, this conference call is being recorded.

At this time, I will turn the call over to Mikayla Taphorn, Director, Investor Relations at Artisan Partners.

Speaker 1

Thank you. Welcome to the Artisan Partners Asset Management business update and earnings call. Today's call will include remarks from Eric Olson, Chairman and CEO and C. J. Daley, CFO.

Our latest results and investor presentation are available on the Investor Relations section of our website. Following these remarks, we will open the line for questions. Before we begin, I'd like to remind you that our comments made on today's call, including responses to your questions, may deal with forward looking statements, which are subject to risks and uncertainties that are presented in the earnings release and detailed in our filings with the SEC. We undertake no obligation to revise these statements following the date of this conference call. In addition, some of our remarks made today will include reference to non GAAP financial measures.

You can find reconciliations of those measures to the most comparable GAAP measures in the earnings release. I will now turn the call over to Eric Olson.

Speaker 2

Thanks, Mikayla. At the 2018, the market drawdown, volatility, and industry wide outflows dominated attention. Our AUM declined by more than 17%, and our stock price declined by more than 30%. Since December 31, our AUM has appreciated 9% to approximately $105,000,000,000 due to investment returns, including alpha and net inflows in January. We understand that markets will be volatile and price can become dislocated from fundamentals.

We have designed our P and L and capital structure to maintain our business integrity through periods of volatility, and we constantly repeat our long term mantra. Stability and a long term mindset position our investment teams and business to take advantage of opportunities during periods of dislocation and disruption. Despite the fourth quarter, 2018 was one of our most successful years ever from a financial perspective. We generated $828,600,000 in revenue. We maintained a 36.8% operating margin, while continuing to reinvest in talent, technology and new investment capabilities.

We generated $2.94 of adjusted EPS, and we paid or declared a total of $3.39 per share of dividends with respect to 2018. Our run rate cash generation yield is approximately 12%, and as I will discuss in a minute, we have numerous embedded options to drive future growth and capital value. We're not trying to be all things to all people, and we're not trying to solve for short term periods. We don't design or launch strategies to smooth cash flow outcomes. We avoid the wrong relationships, and we maintain our investment integrity and pricing power.

We don't guess with our balance sheet, investment decisions, or capital management policy. We simply remain focused on providing the best home for talent to deliver high value added outcomes for clients. We aim to be the ultimate investment and client focused firm, the ideal home for unique investment talent, and a firm that always prioritizes existing clients over sales. That requires discipline, patience, and time. We have launched nine investment teams in our history.

We have merged one team into another team, and we recently split one team into two teams. Each of our teams, spending multiple time periods and asset classes, has successfully delivered value added outcomes for clients. Artisan's edge is the combination of our talent and our environment, basically all the stuff we repeat over and over about who we are. We believe Artisan Partners is the ideal home for passionate and independent thinkers who want to build investment franchises to own the outcomes with as few distractions as possible. The priority we place on investments and talent permeates our firm.

Each investment team has complete autonomy over its investment process and decision making. Each team is built, resourced, and evolved in a way that works best for the team. We don't dictate structure, people, or resources, but we do provide full strategic, distribution, and operational support to implement what works best for each team and maximize time spent investing. We thoughtfully manage capacity to protect the investment process and client outcomes. Our economic model creates transparent, long term alignment for our investment teams, and our long term patient approach gives teams the time to work through difficult periods and execute over full market cycles.

The combination of these attributes is powerful and unique. Through our structure and culture, we generate differentiated outcomes for clients, cultivate existing talent and teams, and attract great new talent. In that regard, we believe Artisan Partners is becoming an even more attractive home for investment talent. It's becoming increasingly difficult, expensive, and time consuming for a great investor to go it alone and start his or her own firm. On the other end of the spectrum, we believe many financial conglomerates are deemphasizing their own high value added investment capabilities in favor of exposure or solution oriented businesses.

The changing industry landscape creates an additional opportunities for us to partner with great new talent going forward. More investment leaders like those who have joined us over the last six years, Brian Krug, Louis Kaufman, Chris Smith, and most recently, Reza Kanovich. On slide three, we show how our talent and model have delivered investment results. A hypothetical portfolio of $1,000,000 invested at the inception of each of our 19 current and historical strategies has grown to $72,600,000 at the 2018 after fees. That's $22,800,000 or 45% more than the hypothetical benchmark index portfolio.

Net of fees, 15 of our 17 current strategies have generated meaningful outperformance relative to their broad based benchmarks since inception. In addition to performing well relative to the passive benchmarks, our strategies have performed well compared to active peers. Of our 15 strategies with corresponding Lipper Fund ratings, 10 have inception to date Lipper rankings in the top decile of their peer group. As you can see along the bottom of the page, we have grown and diversified our autonomous teams and unique sources of alpha over time. Today, we have more and more diverse sources of alpha than ever before.

Slide four shows the long term track record of each investment team. We view the combination of these track records and the talent behind them as giving us numerous embedded options for future growth. Our growth team had strong performance across all four strategies in 2018. We continue to see healthy flows into the Global Opportunities strategy, and we are excited about the growth potential of the Global Discovery Strategy, which combines the punching power of MidCap with the flexibility of the Global Opportunity Set. For calendar year 2018, net of fees, the Growth Team Strategies added 71, five forty two, six fifty three, and thirteen fifty three basis points of outperformance compared to the broad based benchmarks.

On our global equity team, Reza Kanovich and his two analysts are established, and we have reconfigured the non US small cap growth strategy into non US small mid growth, giving the team greater degrees of freedom. We are seeing strong early interest from clients, consultants, and intermediaries. The broader global equity team's non U. S. Growth and global equity strategies both performed well on a relative basis in 2018, outperforming their benchmarks by three sixteen and six fifty basis points, respectively, after fees.

The global equity strategy has a strong long term track record, considerable capacity, and is open across all investment channels. We recently reopened the Non U. S. Growth strategy as well. During the fourth quarter, the international value and global value teams evolved into two separate teams.

Both teams have strong long term track records and compelling brands. Our emerging markets team has an outstanding three and five year track record relative to the index and peers. The team has stable leadership and talent and has consistent philosophy and process. In addition, hardly a day passes without a press release or news story about demand for strategies that incorporate ESG or for strategies managed by women or minorities. The Artisan Emerging Markets team checks all those boxes.

The credit team is approaching its five year mark. For the since inception period, the high income fund is ranked number five of four ninety six funds in the Lipper high yield funds category. In both the high income and a credit opportunity strategy, the team has considerable flexibility to navigate the maturing credit cycle and uncertain interest rate environment. As it is designed to do, the Developing a World strategy provided meaningful downside protection in the fourth quarter, outperforming the emerging markets index by over three fifty basis points after fees. We expect to see demand for the strategy pick up, again from investors seeking a differentiated exposure to emerging markets growth.

The thematic team's long and long short strategies both had outstanding performance in 2018. For calendar year 2018, the thematic strategy beat the S and P 500 by 1483 basis points after fees. We saw increased flows into the team's strategy at end of the year and a trend we believe will continue in 2019. We can't predict when these embedded long term growth options will take off, but given the talent and track records, we feel very good about the long term prospects. Turning to slide five.

In 2018, we had firm wide net outflows of $7,400,000,000 with $4,900,000,000 of net outflows in the fourth quarter as investors dialed back risk and harvested tax losses. For the year, net outflows from our two domestic mid cap strategies and from the non US growth strategy accounted for more than 100% of firm wide net outflows. So for the year, we saw organic growth of about $1,000,000,000 across the rest of our business. Notwithstanding the headlines, there is clearly demand for high value added investing. That's supported by a longer look back as well.

Over the last five years, the two domestic mid cap strategies have accounted for essentially all of our firm wide net outflows, with the rest of our strategies having, in the aggregate, flat flows. Over the last ten years, the rest of our business has had about $20,000,000,000 of net inflows. In the near term, we expect outflows from the domestic mid cap strategies and international growth will continue to weigh on overall flows. At the same time, we expect to see organic growth across most, if not all, of the rest of our strategy. Flows are important.

They help us retain talent, provide growth opportunities for existing talent, and attract new talent. The importance of flows, though, pales in comparison to investment returns and alpha generation. The reason we exist, our fundamental purpose, is to generate and compound wealth for our existing clients and investors. We will always prioritize investing over asset raising. Moreover, as high value added investment firm, we expect investment returns, not flows, to drive our long term growth.

We have always maintained that flows will be lumpy, and we don't seek to engineer or smooth short term flows. Our long term view is shaped by our experience with prospects, consultants, and clients. Successful long term outcomes follow firms with stability, integrity, and performance. Over the last ten years, our cumulative net flows have been essentially flat. Nonetheless, over that time, our AUM has grown from $30,600,000,000 to $96,200,000,000 at the 2018, a compounded annual growth rate of over 12%.

Essentially, of that growth is a product of the investment returns we have generated for clients. Yes, that includes the benefit of broad market returns during a long bull market, but it also includes significant alpha that our teams have generated over and above broad market indices after fees. Just to take a few examples of our largest strategies. Over the 10 period, the non US growth strategy generated 200 basis points of average annual alpha. Non US value generated three seventy four basis points annually.

US mid cap growth, 98 basis points annually global value, two twenty four basis points annually global opportunities, five sixty four basis points annually Generating alpha and compounding returns is a powerful growth engine for our clients and investors' wealth and for our firm. By generating alpha, we lengthen the duration of our client relationships, which allows us to maintain our investment first mentality. We don't have to prioritize distribution in order to thrive and grow as a firm. We need a sufficient asset base to retain, grow and attract talent. Once we have that, we expect the bulk of our growth as a firm to come from the outcomes we generate for clients, not from new assets.

As I said earlier, flows are important, and we'd rather not experience the level of outflows we've seen in our mid cap strategies. The crucial point is that we are not focused on smoothing flows or generating short term organic growth. We are focused on providing the best home for talent to deliver high value added outcomes for clients. If we deliver for our clients, we are confident we will also generate successful long term outcomes for our people and our owners. I will now turn it over to CJ to discuss our recent financial outcomes.

Speaker 3

Thanks, Eric. Financial highlights for the quarter and year are presented on slide seven. I will focus, as I always do, my comments on adjusted results, which we utilize to evaluate our business results and operations. During the fourth quarter, sharp global equity market declines drove assets that we managed from $117,000,000,000 at the beginning of the quarter to $96,000,000,000 at December 31. Markets have since rebounded and our AUM was up 9% to $105,000,000,000 as of the January.

The market declines in the December quarter provided a great example of the transparency and predictability of our financial model. The December end AUM of $96,200,000,000 was down 17% due to the lower equity markets and $4,900,000,000 of net client cash outflows during the quarter. Average AUM and revenues were down 10 from the September, and our largest expenses, which vary directly with revenue, were also down in line with revenues. Fixed operating expenses this quarter included the anticipated one time onboarding costs for personnel additions related to the non U. S.

Smallmid growth strategy. Our operating margin was 33.5, driven down from previous quarters mostly because of the sharp declines in revenues. Adjusted earnings per adjusted share were $0.61 In contrast, for the year and despite lower AUM in the December, average AUM grew 5%, primarily due to strong markets and modest outflows leading into the last quarter of the year. Revenues also grew 4% as to related variable expenses. Fixed costs were up over 2017 by 5% and included the onboarding costs related to the non US small mid cap strategy, costs related to the relocation to new office space for two of our investment teams, and higher compensation costs related to additional headcount and the January 2018 equity based compensation grant.

Adjusted operating margin was 36.8% compared to 37.6% last year. Adjusted net income and adjusted earnings per adjusted share increased 2422%, respectively, reflecting primarily the benefit of tax reform as well as higher revenues. Assets under management and net client cash flows are on slide eight. During the December, AUM decreased $20,300,000,000 or 17 percent compared to $116,600,000,000 at the end of the previous quarter and was down 17% from assets of $115,500,000,000 at the end of the same quarter last year. The net outflows in the December were driven by net outflows in our non U.

S. Growth, U. S. Mid cap growth, and non U. S.

Value strategies. Net outflows in the quarter were due in large part from tax loss selling and risk off client redemptions. After several consecutive years of positive returns, the sharp reversal of the markets in the fourth quarter provided investors the opportunity to realize losses to offset gains, and we experienced significant outflows because of the tax loss selling. We anticipate and are beginning to see January inflows from some of those client assets that redeemed in December for tax loss reasons. The flow picture in January was an encouraging start to the New Year.

The December also included $850,000,000 of net client cash outflows from distributions from Artisan funds that were not reinvested. Net outflows for the year were $7,400,000,000 and were also driven by outflows in non U. S. Growth in our two mid cap strategies. Turning to revenues on slide nine.

Revenues of $191,500,000 in the December were down 10% compared to the September and down 9% compared to the December, both in line with declines in average assets under management. There was no significant change in the effective fee rate for the quarter. Given higher levels of AUM in the first March of the year, revenues for the year were 828,600,000 and grew 4% compared to the prior year. Our weighted average investment management fee remained at 73 basis points in 2018, which included $3,000,000 of performance based fees. Operating expenses are presented on slide 10.

Operating expenses for the December were $127,300,000 3% less than operating expenses in the September, reflecting lower variable incentive compensation and distribution expenses, which were partially offset by approximately $5,000,000 of onboarding costs related to the new team members of the non U. S. Small Mid Cap Growth Strategy. For the year, operating expenses were 5 and $23,700,000 up $27,200,000 or 5% from the prior year. Most of this increase was in compensation and benefits expense, which are presented on the next page.

In addition, in 2018, we invested in investment and distribution related technology capabilities and relocated one of our New York investment teams and our now Denver based investment team to new office locations. Consistent with the guidance we provided during our 3Q earnings call, run rate occupancy expense in 2019 is expected to be approximately $5,000,000 per quarter, and we expect we will incur incremental relocation charges in the 2019 of approximately $2,000,000 Technology costs will continue to average about 10,000,000 a quarter throughout 2019. Our technology spend does not occur pro rata over the year as technology project costs can be lumpy. The spend reflects an increase in market data costs, necessary system upgrades, and further development of capabilities to support our investment teams and marketing capabilities. Further detail on compensation and benefits expenses are presented on slide 11.

In the December, compensation and benefits costs declined but rose as a percentage of revenues as a result of the onboarding costs mentioned earlier. Incentive compensation declined with revenues and as a percentage of revenues remained consistent with the September. Equity based compensation expense declined as we continue to roll off expenses related to earlier equity awards. For the year, the largest driver of the change in compensation and benefits expense was higher incentive compensation. Salary increased due to additional headcount and annual merit increases.

Full year equity based compensation expense increased due to the 2018 equity grant. Consistent with our historical practice, we granted equity awards this quarter, which increased shares outstanding by approximately 960,000 shares. We expect full year equity based compensation expense to be approximately $42,000,000 in 2019 as higher grant date value awards from five years ago continue to roll off. Quarterly expense for equity based comp will average approximately $10,500,000 but will trend down from $12,000,000 in Q1 to $9,000,000 in the fourth quarter. Seasonal benefits costs, which include employer contributions to health and retirement plans and payroll taxes, typically increase compensation expense by about $3,000,000 in the first quarter of each year.

Another $1,000,000 of seasonal expense related to non employee director compensation is recorded in the first quarter as well. The adjusted operating margin and adjusted earnings per adjusted share are presented on slide 12. In the December, the adjusted operating margin was 33.5%, down from 38.5% last quarter and 38.6% for the same quarter of last year. Onboarding costs accounted for a 2.4% decline in adjusted operating margin. Adjusted net income per adjusted share was $0.61 and included $0.11 per adjusted share of non cash equity based compensation expense and $05 per adjusted share of onboarding expenses.

We ended the year with an adjusted operating margin of 36.8%, less than 1% lower than last year. We were able to maintain our margin while making investments in talent, technology and infrastructure to further support our business well into the future. Higher revenues, slightly improved operating results and the benefits of tax reform resulted in adjusted net income per adjusted share of $2.94 up from $2.41 or 22% from last year. Revenues and adjusted earnings per share were the second highest in the firm's history, which brings me to our dividend discussion. Capital management discussion begins on slide 13.

Our capital management philosophy has been and continues to be payment of a majority, if not all of the cash generated from operations in the form of cash dividends. Including the quarterly and special dividend announced yesterday, we will have distributed the majority of the $3.39 of cash generated from operations in 2018 and a pro rata portion of TRA related cash savings. The $3.39 of dividends paid or declared with respect to the 2018 financial results represents the largest amount of full year dividends we've made in our history. The next slide illustrates the transition of our capital management policy to a variable quarterly model. The point of this slide is to illustrate that we would have paid the same total amount under the variable dividend policy as our historical fixed dividend policy.

However, under the variable dividend policy, cash would have been distributed earlier in the year. Quarterly dividend just recently declared of $0.56 reflects 80% of our approximation of the cash generated during the December plus $02 of TR related tax benefits from 2018. Slide 15 shows a historical look at our dividends. Transition to a variable quarterly dividend has not changed our intent to distribute the majority of cash we generate. It only changes the amount that is paid quarterly to better reflect the operating results of the quarter.

We expect to follow the same process each January when we consider the payment of a special annual dividend. That process involves us assessing the current market environment and business conditions and any needs to retain cash for strategic investment or corporate purposes. We expect that the remainder of the cash will continue to be paid as a special annual dividend in February of each year. Our balance sheet summary is on the last slide. Our cash position is healthy and leverage remains modest.

Our leverage ratios have improved slightly from last year due to increased levels of earnings. Looking forward to 2019, beginning AUM at $96,000,000,000 will be a formidable headwind into 2019. However, as a result of positive equity markets and net inflows in the month of January, AUM is up 9% to $105,000,000,000 a good start to 2019 and a welcome turn from the fourth quarter. We remain focused on executing our model to provide our talent with the best opportunity to deliver results for our clients. That concludes my comments and we look forward to your questions.

I will now turn the call back to the operator.

Speaker 0

Thank you. We will now begin the question and answer To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. We please ask that you limit yourself to one question and one follow-up.

If you have further questions, you may reenter the question queue. At this time, we will pause momentarily to assemble our roster. First question will come from Chris Shutler with William Blair. Please go ahead.

Speaker 4

Hi, guys. Good morning. This is actually Andrew Nicholas on for Chris. Eric, you made a comment about larger firms shifting towards solution based investing and it sounds like you view that as a positive for Artisan. So I'm curious, are you seeing materially more opportunities today to bring on new talent versus a year ago?

And what areas are you most interested in?

Speaker 2

Hi, Andrew. It's Eric. With respect to talent in the marketplace and providing a home for talent that wants to align to our structure of investing in a pure sense in the manner and approach that the individual wants to utilize, I believe that the marketplace has given us a better opportunity. As I said, it's very difficult to start your own firm and go at it alone. And it's also more difficult to navigate inside of a large integrated firm to find your own space to invest to your philosophy and process.

Given those two trends, we believe that it's going to be an uptick and opportunity for talent. We have seen a variety of individuals over the last year and we just believe our model will provide that home. And with regards to the types of strategies, again, we remain focused on high value added strategies with high degrees of freedom. And

Speaker 3

we

Speaker 2

are not too specific about are we looking in equity or credit or asset allocation products? Or are we looking in the illiquid private markets? So we're fairly open to strategy.

Speaker 4

Great. Thanks. That's helpful. And then looking at the two mid cap strategies that have been outflows, would it be possible to break down their AUM by channel and give us a sense if the flow pressure is more specific to one channel versus another? I'm just trying to understand if there's a level where in those two strategies where you would expect AUM to level off or to bottom?

Thanks.

Speaker 2

Sure. Can give you the direction and the channel. With regards to the exact leveling off number, it would be a little bit more difficult. Both those strategies in the early 2000s built up a nice client base and a defined contribution space, primarily due to the open architecture that was utilized during that time period. And as the shift moved into proprietary closed structures of target date, We've seen the majority of the outflow come from the defined contribution marketplace.

With regards to exactly where that will settle at, we are unable to give you a specific number until we see some settling. I think we're probably getting a little closer on the mid cap value and we're experiencing some flows last year in mid cap growth, but unable to give you an exact number.

Speaker 4

Thanks. I appreciate it.

Speaker 0

The next question comes from Bill Katz of Citi. Please go ahead.

Speaker 5

Hi, good morning. This is actually Kendall Marthaller on for Bill Katz. Thanks for taking the question. So just given the flow or the AUM update, would you be able to give, a quantity on the flows year to date and also any color on what strategies are driving that rebound?

Speaker 3

Yes. So, the flow number for January was just a little over $05,000,000,000 A lot of that we saw some flows for people that had done some tax loss selling in December. And a good portion of the flows were an international value strategy where we saw a good portion of that tax loss selling in the fourth quarter.

Speaker 5

Okay, great. Thanks. And then just a quick follow-up. So given the uptick in the total comp ratio due to the benefits and payroll expense increase and the seasonality expected in 1Q. How should we be thinking about a more normalized ratio going forward into 'nineteen and 'twenty?

Speaker 3

Yeah, I think our ratio has been fairly consistent. We have on slide 11, you can see the history. So, it's generally been running around 48 to 50. So, I think that's sort of a good run rate. As revenues grow, it ticks down a little bit, but as you saw in the fourth quarter when revenues declined because of declines in AUM, it ticks up a little more to the 50% to 51%, just the impact of those fixed portions of the comps costs.

Speaker 5

Okay, great. Thank you.

Speaker 0

The next question comes from Kenneth Lee with RBC Capital Markets.

Speaker 6

Hi, good morning. Thanks for taking my question. Just in terms of the when you look across the investment strategy, it looks as if you the investment constraints have been lifted across many of them. Maybe you could comment on how you think about the additional investment capacity that's available across these strategies? And whether what you think about in terms of potential changes in terms of profile of net flows given the reopenings?

Speaker 2

Certainly, we've reopened two strategies recently with regards to The U. S. Mid cap growth strategy and non U. S. Growth strategy.

And last year, I believe, did The US Mid Cap Value Strategy. And we have been taking a look at the dynamics of capacity. In all three of those cases, you've seen some outflows in the strategies, and we've also seen increased degrees of freedom. And so the combination of the markets expanding for us with degrees of freedom, as well as capacity opening up because of outflows, we've reopened those strategies and believe that we have good opportunity for growth on a go forward basis with them.

Speaker 6

Great. And then just one quick follow-up. Just in terms of the potential sources of funding for the dividend this year, any latest update on potential excess cash on balance sheet that could be available? And whether in terms of market volatility, how much that could potentially change in terms of either holding on additional cash buffer or things of that nature? Thanks.

Speaker 3

Yes, we've had a very consistent balance sheet policy since becoming public. We've always maintained about $100,000,000 of excess cash on our balance sheet. So, when you look at our balance sheet, everything above $100,000,000 is either available or is either spoken for through accrued payables or taxes or dividends that we would expect to pay or declare in the future. That $100,000,000 of excess, we utilize that for seed investments. We currently have about 40,000,000 of that 100,000,000 in seed products currently, and that's been pretty much the majority of this year.

But that will eventually come back and restore that $100,000,000 of cash. So there really has been no change in the way we think about that.

Speaker 6

Okay, great. Thank you.

Speaker 0

The next question will be from Dan Fannon with Jefferies. Please go ahead.

Speaker 7

Hi, this is actually James Steele filling in for Dan Fannon. Just curious on the flow trends by channel. It looks like the separately managed accounts held up a little bit better than funds in the fourth quarter. Is that just due to funds being more susceptible to tax loss harvesting? Or is there something more encouraging going on in the accounts business?

Speaker 3

I don't think it's anything more than what you suggest. I mean, we were through the first three quarters of the year, flows were quite muted compared to the prior year. And as you saw, it picked up quite a bit in the fourth quarter and that was, we believe, both the of the risk off as well as the tax loss selling.

Speaker 7

Understood. Thank you.

Speaker 0

The next question comes from Mike Carrier with Bank of America. Please go ahead.

Speaker 8

Hey guys, this is actually Sean Kalman on for Mike. Just a quick one on flows. So despite the net outflows last quarter, it looks like gross client inflows were actually very strong. And I was hoping you could give us a little more detail on what you think may have driven that.

Speaker 3

Yes. I think 3Q was quite low due to the seasonality that we typically see. And we the first and fourth quarters historically are much greater on a gross basis. So other than that, there really isn't anything that we're aware of on the inflow side.

Speaker 8

Okay, thanks. And then one more on the reopening of the funds. Can you just give us a quick update on which ones or what percent of AUM are fully open versus soft close and hard close?

Speaker 2

Certainly, Sean. On page four of our deck where we have embedded optionality on the far right, we list out what is open and what is partially open there. And that will give you a good indication there with regards to partial open being similar to a soft close there.

Speaker 8

Okay, thanks.

Speaker 0

Ladies and gentlemen, this concludes the question and answer session and thus concludes today's call. We thank you very much for attending today's presentation. At this time, you may now disconnect. Take care.