Georg Wunderlin - CEO Mary-Anne Daly - CEO, Wealth Management David White - Global Head of Insurance, Client Group

Good morning, everybody. Thank you for joining us. You're investing your time with us this morning. It really is great to see you, and welcome to everyone who has joined us on the Zoom call. So it is a great privilege to be sitting in front of you as the CEO of this amazing company. And I know you've really come to hear about the results and what we're going to be doing from a strategy perspective. But if you can indulge me, I want to spend a couple of minutes giving you my perspectives that will hopefully also show why I'm super energized about the group. So I'm going to start with a little bit of a story. So every weekend, I sit down with my 2 teenage daughters and I scan the newspapers. And we have a chat about what's going on. Like any good parent, I thought that was all about me preparing them for the outside world. And then, of course, what I realize is I get all the benefit because they give me the views from a 19-year-old. So it's super interesting. But of course, the conversation is entirely dominated by, "Dad, what's all this geopolitical uncertainty, immigration, demographics? Why is all this uneven growth leading to a changed political environment?" And then, of course, we inevitably get on to the thing of the transformative impact of climate change and AI, of course, they're way better than me on AI. Those are things that are going to impact their lives and the next generation's lives, and they're not going to go away. So the key thing for me every week, and it's not quite like Sky read the press, by the way at all, but the thing that's always amazing is they sit there and say, "How do I get certainty in what is an uncertain world?" And the only advice I ever give to them is that now is not the time to be a follower. I'm leaving that message with all of you to have in the back of your minds as we go through today because to lead, adapt and innovate, you have to be active. And I am a vocal advocate for active management because given the backdrop that came out of that conversation with my daughters, we've got to move the debate away from talking about barbells to actually how do we manage the balance between risk, return, and cost. And in today's environment, if we can't have that debate, then I don't know when we can. We are the home of active management, a place where some of the industry's best talent aspires to work. And everything we do in managing those assets is for -- in the best interest of our clients. So I know because I've read some of your broker reports that many think I obsess about numbers. But the thing that I have grown to obsess about in 30 years are clients because no matter what industry you're in, if you win with clients, it's going to drive better outcomes for shareholders and better outcomes for our employees. So my obsession when I'm here at Schroders is not going to change. It's my lens on the world. It's actually why I joined Schroders. So I made a commitment that I would see a client every single day. So I've been pretty busy in the last 4 months. I've seen more than 120 clients. Bottom line, their feedback is amazing. They tell me what a great organization I now lead. And what's crucial from those conversations is evidence of the depth and breadth of our client relationships. They drive how we innovate. And the deep relationships, plus the breadth of capability in both public and private markets, actually drives our revenue growth. And to maintain our relationships and our reputation, we need to drive and deliver strong performance and not just investment performance, but business performance too. So Meagen is going to talk to you about our 2024 results. But here is my headline you can write down. It's not good enough to deliver AUM growth and not operating profit growth. We care about delivering for value for our shareholders as well as our clients. But let's dwell for a moment on strong performance, because strong consistent performance is exactly why our clients come to us is at the heart of what we do. So Johanna is going to talk about the statistics that we normally talk about a little bit later, but I want to focus on this chart on the left. So thank you, UBS. It is always nice to have someone else tell you how good you are. What it actually shows you is that we are the most consistently high-performing listed asset manager in Europe, active or passive. And we've been 1 of the top 2 in every single quarter for the last 20 quarters. And I'm pretty convinced our investors are hungry to make sure that blue line goes to the very top. That's why clients come to us. That's why we raised records amount of -- a record amount of money in 2024. Our talented investors deliver through the cycle, 20 quarters, and the depth of our bench here at Schroders is astonishing. So I hope you get a sense that I am quite passionate about what we do, and I actually really believe Schroders is a tomorrow company, not a today company. And put simply, we're committed to independent active management driven by exceptional talent. We have broad, deep relationships with clients that allow us to innovate and remain relevant. And we have a really strong performance as investors, and we strive for that performance as a business. And I'll come back to this because it's really a great story. We have a brand position you just can't replicate. But look, I think it's important to recognize that Schroders is and will always remain an international business focused on growing markets, headquartered here in London, which we see as the center of talent and innovation for our industry globally. I don't have very tinted glasses on. I know there is a lot to do. We will simplify our business, scale it and deliver to make the best from our brilliant assets. And the entire leadership team that you have in the room today are now focused on getting this business back to profitable growth. And that's why all of you are here today to understand what we're going to do about that. So here's what I'm going to cover. First up, Meagen, our new CFO, is going to quickly take you through the 2024 results. Then we'll do Q&A. After this, you get a 30-minute break, which gives you an opportunity to meet with all of my ExCo colleagues. I put their photos up behind you, so you can spot them in the room. This is probably the best time for me to say that actually, last week, you'll have seen that we announced that Mary-Anne is stepping down. Where are you, Mary-Anne? Right at the front. She's stepping down as the CEO of our Wealth business. She joined us back in 2013 when Schroders acquired Cazenove Capital, and she has been totally central to that amazing growth story. So I am going to thank her actually on behalf of all shareholders for the great work that she has done. But actually, for me, personally, she's been a huge support over the last few months. But I'm also excited that Oliver Gregson is joining us in June. He brings a deep understanding of the Wealth Management business, most lately at the JPMorgan Parish. I'm looking forward to working with him to deliver the next phase of growth for that business and exploring actually where we can accelerate beyond what we're outlining today. After break, Meagen and I were joined on stage by our third Executive Director, Johanna, who is the Group CIO and CEO of Public Markets, and then we'll go through the strategy update. So without further ado, Meagen, over to you.

Thank you, Richard, and thank you, everyone. It's a great privilege to be able to present my first set of results to you for Schroders today. For those who don't know me, I joined Schroders as a group COO 2 years ago. Having spent my time delivering transformation, I was curious and excited about being part of the next generation of leadership, leadership in an organization that I've long admired. Now as a COO, you need to understand the plumbing of the business and how the organization fits together. And then you need to seamlessly mold it to enable your investors to focus on delivering client -- better client outcomes. So that role at Schroders has given me a great insight as to how Schroders works front to back across the organization, understanding the levers for profit and the drivers of cost. Now as a CFO, I have a great opportunity to leverage those insights and to build a culture which is commercially focused. I have 3 main priorities

one, embedding cost discipline in our DNA as we scale; two, ensuring that our resources and our capital are focused where we get good shareholder returns; and thirdly, injecting the energy to deliver our transformation at pace. Now as I take you through the results today, I will highlight areas where we have strong foundations. And I will also show you where we have more work to do. You have asked us to improve our financial reporting and disclosures. We've listened, and I'll explain the plan on how we intend to move forward with greater clarity and transparency. With that, let's move on to the 2024 results. As you can see, our results came in a little ahead of our expectations, thanks largely to the better markets at the end of the year. There are 3 key things I want to call out on this slide. Firstly, our net operating income was stable. This despite the net outflows of Institutional and Solutions business highlighted in Q3. This is attributable to our growth in Wealth, Schroders Capital and also, importantly, the resilience of our mutual fund gross flows. Secondly, we contained our operating expenses to 2%. And finally, we can't overlook the fact that our operating profit was down, despite the 4% growth in AUM. Moving on to funds and flows. Our AUM finished the year 4% above at 778.7 billion because of strong markets and investment performance. Key to me on this slide is our flows data. We saw an impressive 129.7 billion of gross inflows this year, the highest we've had since 2020. This points to the sustained client interest and demand across all of our capabilities. In public markets, our mutual funds returned to net inflow after 2 years of outflow. This is possible only because of the quality and the breadth of our investment capabilities. We saw the greatest flow into fixed income and global equities and outflows in the higher-margin regional equity strategies. In Solutions, OCIO performed very well, but the positive flows were masked by the outflows in the Scottish Widows mandates. We'd normally expect those outflows to be about 3 billion a year, but this was closer to 14 billion as they chose to exit the bulk purchase annuity market and switch out of their quantitative equity strategies. This said, there is tremendous value in our partnership with Lloyds Banking. The group extends relationship across Scottish Widows, Cazenove Capital and Schroders Personal Wealth. In Wealth Management, we had another strong year. Our total net new business was in line with our guidance in Q3, but our AUM was up 15%. If we just look at Cazenove Capital in the U.K., our organic net new business rate was industry-leading at 8% this year. In Schroders Capital, we finished the year in line with our Q3 guidance. Now what the net new business numbers don't tell you is that the gross fundraising increased to 10.8 billion or 16% of our opening AUM. And finally, our JVs. These interests provide our shareholders with an attractive exposure to high potential markets. And in 2024, our net new number was positive across all the JVs. Axis drove most of the flows, contributing 3.4 billion of the 6 billion in total. Turning on to operating income. The thing that jumps out to me on this slide is the benefit from investment performance and buoyant markets. This was partially eroded by the adverse FX movements, mainly due to our exposure in the U.S. dollar and the net outflows I just mentioned. Our performance fees and carry were down 21 million on the previous year, but higher than we had guided in Q3. That was largely due to the strengthening of markets at the end of the year, which supported higher performance in our Public Markets business, alongside some earlier-than-expected distributions from several of our private equity funds where they were triggered in terms of the anticipated carry. Looking into 2025, the usual caveats apply. It's difficult to predict the levels of performance fees and carry in any one year. We are, however, currently assuming the level of fees in line with the 63 million we earned in 2024. Our income from JVs and associates reduced slightly. This was largely driven by the BOCOM Fund Management venture, where we felt the full year impact of the fee wide caps that we introduced in 2023. This was partially offset by the growth in AUM and the good momentum in the ventures of Axis and Schroders Personal Wealth. So overall, pulling our operating income together, it was marginally up year-on-year. It demonstrates the breadth and the sources of operating income that will give us stability through the various cycles. Let's take a closer look at the segments, starting with Asset Management. You will notice that we are now reporting Solutions as part of Public Markets. This is because we manage it together with Public Markets offerings in terms of the way in which we support our ability to meet our clients' demands. There are a couple of things that stand out from the slide for me. The first thing is the diverse sources of income in terms of our Asset Management business. And then secondly is the chart on the bottom left with the challenging operating profit trajectory, which we faced in the segment. We will talk more about this later in our plans as we address this as part of our strategy when Johanna talks. Moving on to Public Markets. Now there's a lot on the slide, so let me talk you through it. Starting with the chart on the top. We saw a 2% reduction in our net operating revenue for the Public Markets in 2024. The key drivers were the outflows in Solutions and the softening of margins in Mutual Funds and Institutional, reflecting the change in mix of what our clients are demanding. As the table on the bottom left shows, margins for both mutual funds and institutional were in line with our Q3 guidance. This year, for the first time, we have presented exit margins. We believe this gives a clear view on where we ended the year. Progress in 2025 will clearly be influenced by our client demand. In Mutual Funds, we generated positive net flows in the first quarter for -- from -- sorry, for each quarter from Q2 onwards. And the AUM in both Mutual flows and Institutional combined grew by 6% year-on-year. This provides us with a really strong foundation to move forward. Now moving on to Solutions. I've heard that you'd really like to understand this business better, so what we've done is on the far left there is to provide a greater clarity on our mix. So whilst the overall outflows in insurance partnerships, principally driven by the Scottish Widows, our core Solutions strategies continue to perform well, generating 8.8 billion of net inflows. This business combines our actuarial advisory and investment capabilities to develop bespoke solutions for our clients based on their outcomes, and we typically see a higher level of average longevity here. The Solutions net operating revenue margin was 11 basis points, a little lower than our guidance, and our exit rate is expected to be much the same. So in summary, good demand across the breadth of our Public Markets business, and this is a cause for optimism. We will talk more in terms of how we stabilize the revenue in this business as part of our update later. Moving on to Schroders Capital. Now the most important aspect of our performance this year is the near doubling of the revenue contribution of this new -- of the new business, which you can see on the table on the left. On the right hand, you will see that we generated gross fundraising of 10.8 billion, 16% of our opening AUM, with particular good contributions from private equity and private debt. This said, our new business was flat at 6.4 billion. We must do better in this. The net operating revenue margin for the business was 57 basis points, a little higher than we guided in Q3, and this was mainly due to the higher real estate transaction fees and the shift towards private equity that we saw at the end of the year. The exit rate going into 2025 remains the same. The improvement in the revenue contribution from this new business is really important as we look to accelerate its growth. And again, we will tell you more about that later in our strategy update. Moving on to Wealth Management. This business has again demonstrated excellent performance. Operating profit increased 15% year-on-year, and the segment now makes up 27% of the group's operating profit. As you'll see from the bottom left-hand chart, a large part of this growth is driven by the success of Cazenove Capital and our strategy to build out on business owners, charities and high net worth individuals across the U.K. The net operating margin was in line with our Q3 guidance at 40 basis points, and we are exiting the year at the same rate. Moving on to expenses. You'll see that we've included our central costs on this slide. This is really important because as we lean forward, our discipline on costs will be across our full expense base. In 2024, we focused on embedding better cost discipline across the organization. This, along with the restructuring measures we took in 2023, enabled us to keep our compensation ratio flat at 46% and contain the increase in expenses to less than 2%. This notwithstanding the inflationary pressure and the ongoing investment into our business. The bridge on the right breaks down -- breaks this down. We generated savings of 34 million through our focus on costs and the benefits of the restructuring that we put through in 2023. This included things like the change of our technology strategy, our -- cloud technology strategy and the relocation of our wealth service center to Horsham; 13 million of this was reinvested in the business, notably building out our wealth technology platform. The remainder of the benefit was offset by the effects of inflation of 58 million and those costs that are linked to our higher AUM. In 2025, our focus is on driving further cost efficiencies and delivering sustainable operating leverage. I will come back to you on this as we go through our cost and go through our cost guidance for 2025 as part of our strategy update later. And now let me talk you through our capital position. Our capital surplus over the regulatory requirements and the Board established allowance increased from 551 million to 838 million. This is principally due to our Tier 2 bond issuance, which provided us with increased financial agility, capital diversification and additional liquidity. Importantly, given that we are regulated as a bank, this surplus will enable us to absorb the impacts of Basel 3.1 anticipated in 2027. Important to note that a significant portion of this balance will be used organically to invest in the growth and accelerate Schroders Capital and our Wealth Management businesses, whilst recognizing that our capital generation will reduce during this transformation period. I will talk more about our disciplined capital approach as we get to our strategy update. Clearly, it's a really important part. So to conclude on our 2024 results. We generated operating profit of 641 million, down 3% compared to the prior year. After taking into account our nonoperating items, our profit before tax was 558 million, up 14%, supported by the absence of any restructuring costs this year. In light of these results, our Board has proposed a final dividend of [15p] [ph] per share, and that would provide a total dividend of -- [21.5p] [ph] for the year. Now before I finish, I wanted to focus on some forward-looking changes that we're making to our financial reporting framework. As I mentioned earlier, one of my commitments to you is to bring simplicity, clarity and transparency to our financial reporting and disclosures. You've told us that the way we present our results is not intuitive or consistent with our peers. So going forward, we'll be providing clearer and more standardized approach to help you track our progress. There are 3 key changes we're making to our reporting framework. Firstly, simplifying the way in which we represent our operating profit. We are simplifying our statutory profit to include all costs with operating expenses. We will separately report an adjusted operating profit measure that excludes acquisition-related costs and one-off items to help you understand the ongoing operational performance of our business. You'll find more detail of this in your data packs. Now we've purposely left the year-end results in the current format to enable you -- to help you manage your models, but we will report on the new basis from the half year. Secondly, in Q1, we will be providing greater clarity and granularity on our AUM, flows and margins. This is to help you understand the different components of our business and our business dynamics and principally to reflect how we engage with our clients. The breakout of our core Solutions business that I showed you earlier is a great example of that. We will provide detailed reconciliations of the changes in both of those into our data packs that will be delivered to you in May. And finally, as Richard mentioned in Q3, we are committed to providing regular updates, AUM and flows on a quarterly basis. I hope that gives you useful insight to our 2024 results, and I'll pass back to Richard as we open up for some Q&A.

I got my pad ready, Meagen. So this is going to be super frustrating because I'm going to ask you all not to cover questions related to strategy because we're going to come back to that. So we can just focus on 2024, that would be great. Super eager straight away actually. So can I just say for the benefit of everyone in the room and online, usual things apply, name, where you're from, limit of 3 questions. David, for everyone online, is behind the wall at the back of the room moderating what we can see through Zoom. So I am going to start in the room and [indiscernible] super quickly, I'm going to go straight to him.

Great, thanks. It's Hubert Lam from Bank of America. And thank you for the new disclosures. Really appreciate it. So I guess, I'll stick to the results questions. Firstly, on the fee margin for Mutual Funds, I think the exit rate is about 2 basis points lower than what you reported in 2024. Can you maybe explain what's driving that? I assume it's mix, but could there be potential for further downside as we get through the year? The first question. And second question is on NII assumptions, Wealth Management. How should we think about that with the base rate expected to come down further? And is that going to present further potential pressure on margins, even though the exit rate seems like it's unchanged? And lastly, can you explain also what's your outlook for the JVs and associates with what's happening in China? Do you see that stabilizing or growing going forward?

So this is really hard for me because I still want to jump in on some of the CFO questions. So I'm going to let Meagen do the first 2, and then maybe I'll just deal with the third one now, right? So on the JVs, we're going to talk about them a lot more in the strategy session. So I'm going to hold that question, Hubert. And if we don't answer it, I'm sure you're going to ask it again anyway, but let's just hold it. Meagen, do you want to take the first 2?

Yes. Sure. Thank you for your question. So just starting on the mutual fee margins, as mentioned, our mutual fee margins have really dropped off as a result of a change in our client appetite. We've seen a change in mix in 2 places. One, there has been a move towards more fixed income products with high interest rates. And secondly, as we've seen clients' appetite move away from some of our local strategies into the global equity strategies. So we have guided on that as the exit rate as well. I'd leave it to you in terms of where client appetite and interest rates will go in terms of the market. In terms of the second one, net interest rates inside our Wealth business, now Cazenove's Wealth business in terms of earning interest passes through most of the benefit of any of our interest earnings, where they hold on to about 50 basis points in terms of the interest earning in that business. We really don't -- that is pretty stable. We don't anticipate any major impact on that business. Clearly, as clients move toward more risk off, that is a great opportunity for us to generate more income on our equity products, but we don't see any impact on that business today.

Who's next, really?

Sorry. We didn't answer the third one.

I didn’t. I did comment that we will come back to it.

Okay.

So, yes, Bruce Hamilton from Morgan Stanley. Just a quick one on the -- again, thanks for the improved disclosure. That's great. Comp to revenue is something that historically you've looked at, and I suspect you may talk about this in the strategy update. But where was that number running? Because, obviously, there's a balance between talent retention and trying to drive efficiency. So is that something you're completely stepping away from? Or what was the sort of number in 2024? And any way to think about 2025?

Yes. I'm happy to answer that one. So thanks, Bruce. So as we have guided in the -- in our R&S, and we'll speak later about, we're looking at total costs going forward. And therefore, our guidance is really looking at a cost-to-income ratio as our key guidance to market. It's really important to bring that discipline into the organization in terms of how we think through costs. Clearly, from a comp-to-income ratio, we had a 40% -- 40.4% cost to income -- 46.4% cost-to-income ratio this year, which was consistent with prior years. Talent is massively important. We will consider investing in talent. And as we go on to the strategy section, we will talk about some specific actions we're taking to acquire some talent in specific areas. So yes, no issue on talent. But in terms of cost, we will guide on a cost-to-income ratio going forward.

And Bruce, just to add to that, we're committed to getting a grip on costs, right? And actually, if we try and split out non-comp to revenue ratio, it creates some perverse outcomes about where we want to do things. So one of our firm beliefs is that we should get the best people doing the things that we can at Schroders, whether that's internally or externally. So we want a little bit of freedom as we go through this transformation plan to actually manage our cost as a whole, not actually in components. We're going to go right to the back actually first because -- I'm sorry, Angeliki, I don't have my glass on. I can't see you that far away, sorry.

Mandeep Jagpal, RBC Capital Markets. Two for me as well. I'll try to stick to just the results. First one on margin, slight margin increase in private assets versus guidance. Could you provide some details on what the drivers were there? And then on capital, how much of the surplus of [indiscernible] is actually available to be utilized, for example, investing in the business, distributions and M&A?

Will you take those, Meagen?

Yes, I can take both of those. Firstly, on guidance -- sorry, on the margin guidance on the Private Markets business, we saw that rise slightly towards the end of the year, ending on an exit rate of 57 basis points. That was largely driven to a switch in our private equity mandates, where we've seen the runoff mandates exiting at a lower rate in the new business that we had attained in Q4. That remains our best source in terms of margin in that business. And then secondly, in terms of capital, we will talk in the strategy update in terms of a significant amount of that capital that we will be investing organically in the growth of our business. As I mentioned, that is the amount that sits outside and above our regulatory hurdles as well as our Board early warning signals. So it's all available.

All surplus.

All surplus.

Angeliki? Angeliki, you've broken the microphone.

Good morning, thank you. This is Angeliki Bairaktari from JPMorgan. A question on Schroders Capital flows, please. Thank you so much for giving us the gross flows together with the net. As we sort of look forward, do you expect to see more fundraising? And I was wondering if you have an update on the LTAF initiative that you have been pursuing over the past year. If you can give us some color on sort of how many flows the LTAFs have actually collected. And second question with regards to the Wealth Management business, just to follow-up on the NII question. We have seen NII flattish despite the drop in interest rates, and I hear you on the 50 bps that you retained. But in terms of sort of the different dynamics within that business, what are you seeing in terms of deposit flows versus investments in gilts versus perhaps investments in riskier assets at the moment?

Maybe -- actually, Meagen, why don't you start off on the growth flows? And I am might -- because I have the benefit of asking the audience, we've got Georg and Mary-Anne here. So we might go to Georg just to touch the LTAFs and then Mary-Anne just to touch on what we're seeing with the flows in Wealth.

Sure. So just to be clear, the gross -- it was gross flow in our Private Markets business. Our gross flows in the market -- fundraising was 10.8 billion, as we mentioned. The good news there is we have dry powder of 4.2 billion, which is still available to be deployed. We don't have any issues in deployment. That is a very healthy and -- a healthy deployment rate, and we are above market averages on that. In terms of where we're seeing the flows, our private equity business has done extremely well. It's well positioned in the market, which Richard will pick up later in our strategy sessions. And we continue to see good flow into both private equity and our infrastructure debt products.

Georg, you have to just come on the stage. Just -- maybe just give you as a minute on where we are with the LTAFs. I want everyone online to see what a good-looking chap you are.

Thank you, Richard. So -- and Angeliki, briefly on the LTAFs, we've launched LTAFs in several areas. You might have followed the news on the venture capital side. We've been awarded a mandate between BBB and Phoenix, which is 500 million committed and starting to invest soon. It's currently being built, but it's been publicly announced. And we have built 2 LTAFs, again, in the joint venture with Phoenix through Future Growth Capital, and they are both approved now and starting to be ramped up with the seed capital from FGC. And I think we said publicly that we're expecting this to become 2.5 billion, but they're still small at this stage. And then we've launched an LTAF via our Solutions business, Climate+, which is above 100 billion roughly now. And then lastly, there is an LTAF on the renewable energy side, which is approaching 200 million roughly.

And Mary-Anne, did you want to just touch on how we're seeing cash and gilts flow?

Sure. Absolutely. So on -- I think on -- I think I might -- hopefully, you can hear me, yes. On the gilts, we are still -- Angeliki, we are still seeing some interest in the gilts. But I think 1 of the major -- 2 major points really to note. One, they're -- it's a sign that we are being very successful in our ability to attract entrepreneurs. You'll remember, those of you who were here at our sort of Wealth in Focus Day that we said we wanted to expand that franchise beyond London and the Southeast, and we've done that very successfully regionally. And those flows tend to come when entrepreneurs exit their business. And typically, those entrepreneurs that exit the business are actually quite risk averse. They need time to reflect. They need time to think about what they're going to do next. And so having that first conversation to say just invest in a gilt for higher rate taxpayers, it's actually a very useful and a very attractive way to sort of hold your money until we decide how to structure your assets, what else matters. But what we are seeing as well is year-on-year, we are converting the previous year's gilts, if you will, into more risky assets as they then decide what their investment strategy is. So I hope that's helpful.

And Angeliki, of course, that's central to our Cazenove business model is actually the fact because we're a bank, we can take large deposits and move them from cash to gilts to risk assets pretty seamlessly. So it's a big differentiator for us, Mary-Anne.

It is, as is our sort of sophisticated financial planning advice where we're talking to clients about how they want to structure their assets going forward.

Thanks, Mary-Anne. Where were we next? David, are you going to ask me a difficult question?

Let's see. Dave McCann from Deutsche-Numis. And it shouldn't be too difficult. These are obviously backward looking at this point. Again, echo the comments and thanks for the new disclosure. That's really helpful. And just on one of the new piece disclosure, the segmental information you've given us on the Solutions business. Are there any major differences in the revenue margins between those categories you've outlined? That would just be useful to know. And then second question. I guess, slightly surprised there was no new share buyback announced today. So maybe just your thoughts on why you didn't take the opportunity to, yes, I guess, refresh and reload that program. Thanks.

On the second one, again, hold that question, David, because I think we're going to talking about how we might use our capital in the strategy section. So I'm sure you will come back to me if you're not convinced at that point, but we can definitely take the first question.

Thanks, David. And the way we've broken down our Solutions business, there are really 3 components to that. There's the multi-asset funds, which generally get a revenue of about 30 basis points. And then there's the OCIO components, the fiduciary management, where we generally come out below 10 basis points in terms of those broader mandates -- large-scale mandates like Tesco.

Mike?

Thank you. Mike Werner from UBS. Meagen, I think you mentioned on something and when you were talking about the capital surplus about the potential impact in 2026 of Basel 3.1. I was just wondering if you could just give a little bit more color just to see what -- how we should think about that going forward.

Sure. Thanks, Mike. As you know, Basel 3.1 has not -- where we're heading on Basel 3.1 has not yet been clarified. We're working really closely with the PRA in understanding nuances, and I think it will depend very much in terms of what we got on our balance sheet at that point. So it's very difficult for us to predict, but we do know we need to hold something, and that's really what we indicated.

Any one at the back?

It's Greg Simpson from BNP Paribas. Three quick ones on my end. Firstly, can you provide any color around flows by client geography, particularly in Mutual Funds, U.S. versus Asia versus Europe? Secondly, there was a comment in the release that year-to-date flows are modestly positive. Can you provide any color? Has that positive momentum in Mutual Funds last year kind of continued into this year? Or has that slipped back? And thirdly, just any comment on impact in Wealth from the budget? Any behavioral changes given there is some changes to pensions and inheritance tax?

So Meagen, do you want to take the first one? I'll take the last one.

Sure. Yes. If we look at our geographical split of flows, our Mutual Fund flows in Europe, where we have our SICAV have been extremely positive. They were the big contributor to that 1.3 billion net positive flow over the last year. Slight -- Asia has been slightly muted as a result of our investor appetite -- or not investor, our client appetite in terms of where they're wanting to position, and they've moved out of some of those local strategies more into our core global strategies.

Greg, it's very interesting on the U.S. flows, Meagen, for the third consecutive year now, we've actually been in positive flow. So all of those people who keep saying 40 Act funds are dead and everyone is going to be in an ETF, that is not our experience. So through the heart of the platform, we are consistently generating really good positive flow.

Yes. And then the second question, just in terms of flows year-to-date on our comments on outlook, we're really focused there in terms of our Institutional business where we've landed as a large mandate, specifically the St. James Place mandate, which was well documented in the press where we've landed a 5 billion mandate really off the back of our great equity and sustainability mandate. So that's what we're guiding on.

Greg, I think the -- in relation to the budget, I assume the question I'm really talking about is the change in the non-dom tax regime. The great thing about our business, because we have Schroders Wealth Management that enables us to serve international clients, actually, we haven't seen -- I'm going to park the question of where people might live. We haven't seen a mass exodus of money flowing out of our business in Wealth Management. Actually, far from it. So I'm not going to get into it actually, but I can assure you that the impact of the budget on us as a business managing high net worth individuals, Wealth has not been impacted. Any more in the room before I go online? So David, do we have any questions online?

There's no question so far, but there's a Q&A button in the top right-hand corner of the screen. So if you've got a question, you can type out the question, add your name and where you're from, and we'll read it out for you. But there's nothing at the moment.

Well, if there isn't anything, we might have to pick those up in our next Q&A session, actually, because I think we're going to go into a break now. We're going to give everyone and everybody in the room, but conscious the next session is quite long. I deliberately wanted to give you 30 minutes to meet with the ExCo. They have not been scripted. There have no talking points. It is your opportunity to go and ask them any questions that you want and get a really honest answer. So with that, can we all be back in the room at just 10

10, and we'll carry on with the strategy update. Thanks a lot.