Q3 2022 Virtus Investment Partners Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Yeah.
Good morning, My name is Michelle and I will be your conference operator today I would like to welcome everyone to the bird.
Investment partners quarterly conference call.
Right.
For this call is available on the Investor Relations section of the purchase website Www Dot dot com and the call is being recorded and will be available for replay on the burdens site.
At this time all participants are in a listen only.
The Speakers' remarks, there will be a question and answer period and instructions will follow at that time.
Now I'll turn the conference.
Sean.
Which will officer.
Following the prepared remarks, we will have a Q and a period.
Before we begin please note the disclosures on page two of the slide presentation certain matters discussed in this call may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
And as such are subject to known and unknown risks and uncertainties, including but not limited to those factors set forth in today's news release and discussed in our SEC filings.
These risks and uncertainties me cause actual results to differ materially from those discussed in the statements and.
In addition to results presented on a gap basis, we have certain non-GAAP measures to evaluate our financial results are.
non-GAAP financial measures are not substitutes for GAAP financial results and should be read in conjunction with the gap results.
Reconciliations of these non-GAAP financial measures to the applicable GAAP measures are included in today's news release and financial supplement.
Which are available on our web site.
Now I would like to turn the call over to George George.
Thank you Sean good morning, everyone.
I'll start with an overview of the results reported earlier today before turning it over to Mike to provide some more detail and then I'll provide some additional background on our announcement last week of the Alpha simplex agreement.
The equity and credit markets remained exceptionally challenging the third quarter concerns over rising interest rates inflation geopolitical tension and heightened volatility have negatively affected investor sentiment across products and asset classes.
Our third quarter results reflected this difficult environment with the year to date market declines meaningfully impacting assets under management and operating earnings.
For the quarter, we hadn't it outflows primarily due to mutual funds, though we did have a significant improvement on a sequential basis.
While retail separate accounts and institutional also had modest net outflows. We did have positive net flows enclosed in funds private client and ETS.
Though the environment remains challenging in the fourth quarter. We believe these types of markets highlight the importance of active management. We are pleased with how our managers are navigating these markets and we believe we are well positioned to provide clients compelling solutions now and as investor sentiment improves.
Turning that a review of the results.
Total assets under management decreased 7% to 145 billion, primarily due to negative marked performance. In addition to the net outflows.
Sales of 5.7 billion declined from seven $9 billion in the second quarter due primarily to two large institutional client fundings in the prior quarter as well as a generally unfavourable retail investor sentiment.
Certain asset classes, however, including international equity fixed income and multi asset we had increased sales in the quarter.
Net outflows, where $3.3 billion, a meaningful improvement from $4.8 billion in the prior quarter.
Net outflows were driven primarily by mutual funds, but did include the net outflows and institutional an intermediary distributed retail separate accounts, while etfs some private client again generate a positive net flows.
Closing on funds also generated positive flows which were related to a rights offering during the quarter.
Byproduct funded outflows of 2.8 billion improved from $4.5 billion due to a lower level of redemptions across strategies.
Retail separate account net flows which were modestly negative also improved as a result of lower redemptions.
Institutional turned negative generating net outflows of point $4 billion after many consecutive quarters of organic growth.
The business is inherently lumpy based on the timing of client fundings, we still see a strong level of activity in the pipeline, including mandates that funded immediately after the end of the quarter.
In terms of what we're seeing in October the trend for retail open and funds remains similar to the third quarter, which vary with the market.
For institutional we remain pleased with the pipeline and I've seen several significant mandates begin to fund, including global growth mandate. We also price of $300 million Cielo earlier this month.
Our third quarter financial results reflected the impact on the market declines that began early in the year and continued in the third quarter.
Operating income and suggested was $65 million down from 78 million sequentially and the related margin of 35 declined from 39.2.
Earnings per share suggested decreased 16% to $5.76 in large part, reflecting the decline in average assets under management.
Turning that a capsule given are solid cash flow generation and balance sheet. We continued to return capital shareholders, while maintaining appropriate levels of working capital and leverage during.
During the quarter, we repurchased $10 million of our common shares <unk>.
Totaling $105 million over the past year and have reduced shares outstanding by 4.7% since September 30th of 2021.
So raise our quarterly common dividend, representing the fifth consecutive annual increase.
We ended the quarter and a net cash position of 47 million and continue to have significant flexibility in managing our capital needs with total cash on hand is September 30th of $309 million, the significant undrawn revolver and $120 million in investments.
While we are disappointed with results for the quarter. They are primarily related to market in investor sentiment factors from which we are not immune in.
In spite of the markets, we continue to be focused on the execution of our strategy focusing on building al capabilities position us for future growth is market stabilized.
Our positioning is underpinned by our increasingly broad range of strategies and product offerings to appeal to clients across changing environments and preferences.
Our extensive distribution reach including expanded non U S capabilities, which make us an attractive partner for boutique managers.
Solid investment formants across products and strategies and a flexible balance sheet and strong.
Strong free cash flow, enabling us to return capital to shareholders, while continuing to invest in growth opportunities, both organically and inorganically, including a recent agreement at Alpha simplex as an affiliated manager, which I will discuss later in the call with that I'll turn the call over to Mike Mike.
Thank you George and good morning, everyone.
Starting with our results on slide seven assets under management.
At September 30th assets under management or $145 billion down 7%.
From $155.4 billion at June 30th.
The sequential change reflected $6 6 billion of market depreciation.
At $3.3 billion of net outflows.
Average assets under management in the quarter of $157.1 billion.
Down 8% largely due to market performance.
Our assets under management remained well diversified byproduct type an asset class.
U S retail funds represented 34% of total au M at September 30th.
With institutional and retail separate accounts at 32%.
In 2003% respectively.
By asset class fixed income and multi asset now represent nearly 40% of total.
And alternatives were 7% of AUN.
We continued to generate strong relative investment performance across strategies at September 30th approximately 67% of rated fund assets.
At four or five stars.
And 91% were in three four or five star funds.
We had nine funds with AUN of $1 billion or more that were rated four or five stars.
Representing a diverse set of strategies.
From five different managers.
In addition to strong fund performance as of September 30th 86% of retail separate account assets.
And 63% of institutional assets were outperforming the benchmarks over five years.
Also 75% of institutional assets for exceeding the medium performance of their peer groups.
The same five year basis.
Turning to slide eight asset flows.
Total sales of 5.7 billion compared with seven $9 billion in the prior quarter.
Reflecting $1.8 billion from two significant institutional mandates in the prior quarter.
And continued negative investor sentiment.
Byproduct funds sales of $2.9 billion, compared with $3.1 billion down, 8% as lower small and large cap domestic equity and alternative sales or partially offset by modestly higher fixed income and international equity funds sale.
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Institutional sales were $1.5 billion, a sequential decline due to the two large client inflows in the prior quarter.
Retail separate account sales were $1.2 billion.
Compared with $1.3 billion in the second quarter.
Overall, net outflows, where $3.3 billion, primarily due to open and funds reviewing byproduct.
For open and funds net outflows, where $2.8 billion, an improvement from $4.5 billion in the prior quarter, primarily due to lower redemptions across all asset classes.
Our top two funds strategies for net inflows in the quarter or Multiasset credit and merger arbitrage.
Both from recent transactions and highlighting the benefit of the ongoing diversification of the ohm profile.
I would also note that ETF net flows were positive as they have been for eight of the past nine quarters.
Institutional net outflows of point $4 billion compared with net inflows last quarter, which included the two large client fundings.
And retail separate accounts net outflows of $2 billion.
Compared with point $7 billion in the second quarter.
Domestic mid Cat Smith.
Mid cap and Multiasset strategies generated positive net flows.
And our private client business net flows remained positive as they have for 15 consecutive quarters.
Turning to slide nine investment management fees as adjusted of $164 million declined $11.9 million or 7%.
Reflecting the 8% sequential decline an average assets.
Partially offset by a modestly higher average fee right.
The average fee rate of $41 five basis points compared with $41 two basis points in the prior quarter.
With the modest sequential increase primarily reflecting a higher average open end fund fee right.
Our fee rates, which are net of asset base distribution costs.
Included discreet $1 million third party distribution expense.
That lowered the overall rate by three basis points.
Performance fees in the quarter of where modestly lower at point $3 million compared with point $4 million in the prior quarter.
For the fourth quarter, we believe the range of 41% to 43 basis points remains reasonable.
And a current market levels, we would anticipate being closer to the low end of that range.
Slide 10 shows the five quarter trend in employment expenses.
Total employment expenses as adjusted of $88.7 million decreased sequentially from $89.1 million.
Lower profit in sales based compensation was largely offset by $2.2 million of higher stock based incentive compensation in the quarter.
Primarily as a result of improvement in relative investment performance metrics on.
On which certain awards or base.
Employment expenses also included a point 8 million dollar impact from the addition of two new investment teams in the quarter.
While those teams only joined recently we are pleased that we have already seen modest mandates.
And notable activity.
As a percentage of revenues employment expenses were 47.8%.
From 44.8% in the second quarter, primarily due to these items as well as the market driven revenue decline.
For the fourth quarter, we believe employment expenses as adjusted would be in a range of 50% to 52% of revenues.
Which assumes current market levels and no meaningful improvement or degradation in markets three year and we.
We will update you on that range next quarter as appropriate.
Turning to slide 11, other operating expenses as adjusted worth $31.1 million and included approximately $1 million of transaction costs associated with Alpha simplex.
Adjusting for the transaction costs as well as the point $8 million of annual director grants in the prior quarter.
Other operating expenses as adjusted were essentially flat with the prior period.
And within the 27% to 31 million dollar per quarter range. We previously provided.
Which we believe is an appropriate level going forward as always but particularly in this challenging market environment.
And given the impact of inflation, we are closely managing all discretionary expenditures and initiatives and have taken such actions as eliminating facility costs release consolidation and.
In addition to initiatives under way to provide for future operating efficiencies.
We will however continue to prudently invest to support growth.
Slide 12 illustrates the trend in earnings operating income as adjusted of $64.9 million declined $13.1 million or 17% sequentially due to lower revenues.
The operating margin is adjusted a 35% compared with 39.2% in the second quarter.
As previously mentioned operating income in the margin, where each impacted by discrete items, including the $1 million third party distribution expense.
$1 million of transaction costs and other noted items.
Net income is adjusted of $5.76 per diluted share declined 16% in the quarter.
Regarding GAAP results net income per share of $4.25 increased from $2.29 per share in the second quarter and included $1.12 a realized an unrealized losses on investments primarily consolidated investment products.
And 54 cents of restructuring charges related to the consolidation of office space.
Harshly offset by 73, a fair value adjustments to affiliate Noncontrolling interests.
Slide 13 shows the trend of our capital liquidity and select balance sheet items working capital was $195 million in September 30th.
An increase from 185 million at June 30th.
As cash earnings exceeded capital return to shareholders.
During the third quarter, we repurchased 50422 shares of common stock for $10 million.
Over the past year, we have reduced shares outstanding by 4.7%.
During the quarter as previously announced we also increase the quarterly common dividend by 10% to one dollar and 65 cents.
Our fifth consecutive annual increase.
At September 30th gross debt to EBITDA was 0.7 times net.
Net cache of $47 million compared with net debt of $12 million at June 30th.
I would note that we did not make a discretionary debt pay down in the quarter, So as to preserve financial flexibility and with that let me turn the call back over to George George.
Thank you Mike.
Before we take your questions I would like to comment on our announcement last week regarding our agreement to acquire Alpha simplex, leading manager of liquid alternative investment solutions with $10.9 billion in assets under management at September 30th.
Alpha simplex specializes in systematic investment strategies that are designed to adapt to changing market dynamics, primarily using liquid futures in forward contracts.
The offer a flagship trend following managed future strategy, a multi strat hedge fund replication strategy and risk efficient alternative solutions that seek to provide diversification to traditional portfolios.
<unk> managed future strategy that seeks to January positive absolute returns over a full market cycle with low correlation to traditional stock and bond markets. During periods of dislocation is offered in multiple investment vehicles, including a U S. Mutual funds usage spun private funds in separate accounts.
The firm's five-star 3.5 billion Alpha simplex manage future strategy fund is the third largest U S fund in this category is a strong one year investment return and positive flows through September 30th and is in the top decile of the peer group for each of the three five and 10 year periods.
We're very excited to add office simplex to our family are affiliated managers each of which specialize in individual strategies are asset classes.
This transaction like our previous ones is part of our overall strategy of expanding our offerings of distinctive capabilities provided by dedicated and specialist boutique managers that collectively we will provide the building blocks of a well diversified portfolio as well as more comprehensive investment solutions for clients.
Elvis simplex will significantly enhance and diversify our investment offerings by adding an attractive liquid alternative capability from a market leader with a 15 year track record that has delivered strong uncorrelated returns over market cycles.
The addition will further diversify our asset base, both byproduct an asset class on a pro forma basis institutional AUN would increase to 35% of total and alternative strategies with double to 14%.
Alpha simple strategies will also provide additional growth and distribution opportunities as we seek to introduce their capabilities into different products structures and by leveraging our retail and institutional distribution resources to expand their client base and both the U S and particularly non U S markets.
In addition, there was a strong cultural fit between alpha simplex, and Virtus and they're talented group of experienced portfolio managers and researchers are lined with us on strategic growth objectives.
Like all our affiliated managers Alpha simplex will operate as an individual boutique retaining autonomy over its investment process and maintaining its independent structure culture and brand identity.
Under the agreement, we would acquire 100 per cent of Alpha simplex for $130 million at closing, which includes meaningful deferred retention incentives for management.
Given our balance sheet and cash flow the transaction will be funded with existing resources that included on undrawn revolving credit facility.
We expect the transaction to be immediately accretive to earnings as suggested by approximately 10% based on run rate third quarter earnings.
We anticipate closing near the end of the first quarter, which subject to regulatory client Fund Board and fund shareholder approval. So with that we will now take questions. Michelle would you open up the lines. Please.
As a reminder, cats a question you will need to press start one one when you tell a town.
Standby bye week compiled Q&A Ross.
Our first question comes from Sumi Moody with Piper Sandler your lines now Elton.
Alright, Thanks, good morning, guys.
Just a couple here to start on Alpha simplex.
Just on the maybe it's for Mike here, but on on the fee rates for both the retail and institutional pieces are are those going to be in that sort of 131 40 range for for revenue modeling purposes, and can you talk about the expected impacts the baby copper noncomp expenses as well just a color around those financial impacts would be really helpful.
To me with what we'll do we gave the accretion on an overall basis on this call will go through the impact on each of the rose the fee right the employment and the other operating in more detail when we get on the call at the next quarter, which.
Just sign the transaction, we have a good sense of the accretion is George outlines so.
We'll go into those line items in more detail going forward, but we're pleased with the meaningful accretion that was outlined on the call right and just like even without alpha simplex or.
Employment expense ratio in fee rate will vary a lot depending upon with the market environment is so will also be able to then update it for whatever the market environment is impacting our ratios as well as the impact of bringing them into the family.
Okay, Great and then I guess.
Capital allocation just the impact there I mean, just trying to think through the near term impacts can kind of give it not just the the transaction market environment, so not a buyback side.
Is it safe to assume maybe the focus on our purchases continue kind of given this price action or will you try to accumulate a little capital ahead of the deal closing in on on the dividend side not surprised to see the increase maybe not being as largest prior hikes given the backdrop, but he might as how you maybe think about the managing that that level over the next.
Couple of years or kind of yield focus or or as a percentage of cash flow.
Yeah, no. It's a great question and I think you sort of kind of highlighted an important element, which is the environment right. So the one of the number one functions of our capital on our balance sheet is to protect the business and particularly in volatile and challenging times right and you kind of it's been an interesting year as we sort of say that so we feel.
Through that as we make our various decisions around how to manage the capital again, we've done it in a way that we have flexibility and we continue to balance the different alternatives of things, we need to do and as you can kind of see through what we've reported we did continued to dubai bit buybacks, albeit at a lower level, which.
So as not to pay down debt again, and that's really given the backdrop of all over the environment is unfolding as well as other high uses of capital from our perspective, which include organic and inorganic growth and obviously now we have the announcement on opposite implants.
But going forward I'm, sorry, if you're kind of going forward again, I think what we've always said will continue to be the case, which is we want to maintain with our free cash flow generation a balance between those three.
Areas and then depending upon the environment. We would then prioritise slightly prioritize one or the other but again I think as we've demonstrated we've continuously returning capital either through repurchases or three five consecutive increases in our dividends.
And then when we strategically find a good use of capital V and M&A transaction, we will choose to do some we choose not to do obviously, we just announced one so we will continue to balance all of that.
Alright. Thank you and then just one last one for me on a distribution just out of high level I just wanted to maybe get an update where you guys are in terms of expanding outside of the U S.
Office in flex helps in that regard, but the ultimate goal there over the long term it can be talk about that and what you expect that to come either through organic growth or more likely through acquisition talk about that that'd be helpful.
Yeah, I'll speak to speak to distribution broadly and and actually throw in retail there I think on the retail side.
We continue to see great opportunities expanding our offerings on the retail separate account size. Obviously, we have a very broad range of mutual funds. We should we continue to focus in on but we continue to see opportunities in retail separate accounts, particularly strategies from some of the newer capabilities that we've either recently added or the price.
SS of developing so that continues to be an area of focus including certain sub channels within retail. So we see great opportunities continue on the retail side institutional we think those are actually larger opportunities just because of you know from our history. There are certain areas of the institutional market that some of our.
<unk> have not been able to fully penetrate so as you have seen over the last quarter's except for the third quarter. We we've had had successful mandates, particularly outside the U S for multiple of our managers in multiple strategies that is an area that we continue to see great growth opportunities.
Those growth opportunities will empower come from some of the additional resource expansion that we have as a result of the stone Harbor transaction.
Where individuals with <unk>.
Great experience and contacts in that market are are now, making our other capabilities available. So we continue on on that portion of our business and continue to look at areas to grow not only the offerings in terms of institutional separate accounts, but even in an offshore fund vehicles for mulch.
<unk> of our managers so so generally.
As you sort of see the kinds of products, we are going to be introducing you'll be seeing more of them in the offshore fund side on the retail separate account side and Etfs side and probably on the.
Open inside and that's all really just marrying our product development strategy with where we see the greatest distribution growth opportunities.
Great. Thanks.
Thank you.
Please stand by for the next question.
The next question comes from Michael Cypress's Morgan Stanley Your line of <unk>.
Great. Thank you good morning, guys.
Maybe just starting off with Alpha simplex strong track record clearly that they have there. It's just a question around.
In this market environment, that's particularly favorable perhaps for their strategy. How did you get comfortable that you are not buying this strategy. This business at the peak in terms of performance and <unk>, how do you sort of Derisked that in your view and then can you talk about from a distribution standpoint, what sort of actions and steps you guys can take to accelerate the girl.
Growth of Alpha simplex top decile strategy in any capacity constraints to be aware of.
Sure on the first part of the question I mean for any transaction and we have done quite a few over the last few decades, you kind of really ignore the.
Current environment.
In terms of either being negative or positive right and obviously for announcing it now you should assume we've been in conversations for an extended period of time.
And throughout that entire time they've continued to.
A positive flows as I noted in the earlier comments. So really we looked at that really is part of the strategy. We should we've actually even discussed on previous calls, which is we truly and fundamentally believe that there needs to be a much more <unk>.
Significant component in a diversified portfolio of non correlated strategies. So we have been looking at those looking for those that have.
Demonstrated performance, particularly over market cycle. So this is really a strategic fit and as we go through any transaction, where we're very disciplined about how we sort of approach.
Valuation because again, we don't need to do M&A for our long term growth growth strategy, we choose to do it when there is a great strategic fit is part of our plan and the financial terms are ones that we are very comfortable with in executing that transaction.
On the second part of the question, which I think it was really more on the growth side.
Is sort of alluded to in the comment I think.
What are the only things as attractive about about this relationship is I think there is a really strong alignment between our growth objectives and their growth objectives right. So as I just stated a lot of our growth objectives do include bringing in those more non correlated strategies and capabilities.
And really expanding them through the filters of of institutional as well as ETF and other offerings and I think that dovetails well with what they've done we have views around the opportunities that we we can have together by leveraging their strategies, obviously, there's work to be done and.
As we indicated we wouldn't be closing on this until near the end of the first quarter.
Okay, Great and then maybe just shifting over to expenses just on the Compsci to hear you on that 50, 852% comp ratio range for the fourth quarter I think it was if I heard you right I guess, how should we be thinking about that.
Into 2023 may be a little bit early for guidance, there, but I guess just for modeling purposes, why would that not be irrelevant range. If markets remain at these levels. As we think about next year would there be other things to be thinking about in terms of cost save initiatives that would result in that being anything different from that <unk>.
50, 250 to 52 per cent range for next year and then on the Noncomp side, maybe you could talk to some of the initiatives and I think you were alluding to around managing discretionary costs a bit tighter what sort of actions can you take how meaningful could that be relative to that guidance range. You gave on the noncomp site and could we actually see that towards the lower end.
If not even a decline thank you.
Yeah, I'll, just a couple of comments that Mike.
We're fond as well.
You know as you sort of look at the employment expensive, particularly look at it in terms of the relationship between that and revenue.
The primary driver of that over the years has been and will continue to be.
The markets and the impact of markets on our revenue.
So as we even give guidance within quarters or from one quarter to another.
We do like to stress, it's really kind of important that that will.
Have a big implication even in the third quarter right. As you saw the markets in July versus August versus September .
There is a lot of variability around that so I think the comments that Mike made we're sort of anchoring on if there's no change in the market that that would be the right range and it could change otherwise Mike.
<unk> thoughts on that and the operating expenses as well yeah, Michael I think George George outlined it well.
We are certainly impacted by market driven revenue increases as well as market driven revenue declines and just.
Based on where ending assets settled at 930 verse average assets in the third quarter, we highlighted the expectation for the fourth quarter, and we will update as appropriate moving into 2023 and that could.
Could shift I think the view on our incremental margins is still overall and that 50% to 55% range that we've historically achieve.
<unk> so when we look at the business and we look at incremental margins, we still believe that will be level at the incremental margins come come on so.
Business should be well positioned to to.
To revert back to margin levels.
At at previous levels I think on the operating expense side, we talked about the 2007% to 31 million dollar range and initiatives underway. There. The one most notably as the lease consolidation that we completed at one of our locations that will deliver it savings there were some restructuring that came through related.
To that item.
We will continue to.
Invest in other.
Other areas and other initiatives and we're looking carefully at all of them and I think what we're seeing is savings from those areas kind of keep us in that range.
We've been in that 29% to 30 million dollar level, we kept the range of the same and we're really offsetting inflationary pressures that we're seeing across the business.
So we're really focused at a very detailed level or keeping our our our levels consistent offsetting inflation and continuing to prudently invest in the business and we're closing on on Alpha simplex early in 2023, we are continuing to invest in the business. So.
Balancing all that but being very disciplined as we always have been on the expense side to continue to be in a position to drive those incremental margins like I referred.
Great. Thank you know I guess, maybe squeeze in another question just on the institutional pipeline. It sounds like you had some mandates fund in the fourth quarter. Maybe you can just give a little bit more color around how the pipeline overall in size and shaping up relative to maybe a quarter ago or a year ago, where are you <unk>.
<unk> sort of strange anything you are able to help quantify on that front that'd be very helpful. Thank you.
Yeah, and then a couple of comments and then Michael and onto that so yeah I mean.
I think all of you know the institutional business is really lumpy and some some timing can be pretty heartbreaking.
We're as we noted in the comments certain things that came in right on the cusp, but.
But if you think about this kind of the backdrop I mean, the third quarter really was an unsettled backdrop for people to ultimately make decisions, but we believe what we have seen though is institutional investors are continuing to do what they need to do for the long term and have been much less impacted.
Then then the retail side.
But in terms of the pipeline Mike when he gives us some color yeah I think.
We've we've.
We have been consistently pleased with the pipeline across Ah strategies and managers and geographies I mean, we've.
We have seen our managers outside the U S.
Be considered for mandates and what we know that has been one and not yet funded is.
Significantly in excess of known termination so.
We feel good about it as a lumpy businesses as George noted some of the fundings take time to come in so.
We're pleased that seven of quarters consecutively before the third quarter.
Positive and.
We we feel very positive about the pipeline the activity and then George alluded to a cielo, which will also come through in the fourth quarter, which are also will will generate positive flow. So we're seeing it across multiple affiliates in different product forms and.
Feel good about the continued progress being made there on the institutional side.
Great. Thank you.
This concludes our question and answer session I would like to turn the conference back over to Mister Aylward.
Great. Thank you and I just want to thank everyone for joining us today and as we always do we certainly encourage you to call us or send US enough you have any additional questions. So thank you all.
That concludes today's call. Thank you for participating he may now disconnect.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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