Full Year 2026 L1 Group Ltd Earnings Call

August 17, 2026

Speaker #1: Thank you for standing by, and welcome to the L1 Group Limited 2026 full-year results. All participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session.

Operator: Thank you for standing by, and welcome to the L1 Group Limited 2026 full year results. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Julian Russell, CEO and Managing Director. Please go ahead.

Operator: Thank you for standing by, and welcome to the L1 Group Limited 2026 full year results. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Julian Russell, CEO and Managing Director. Please go ahead.

Speaker #1: If you wish to ask a question, you will need to press the star key, followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Julian Russell, CEO and Managing Director.

Speaker #1: Please go ahead.

Speaker #2: Thank you, operator. Good morning, everyone. Thanks for joining today's call to go through our results for FY26. I'm joined in the room by Andrew Stanard, our Chief Financial Officer.

Julian Russell: Thank you, operator, and good morning, everyone. Thanks for joining today's call to go through our results for FY26. I am joined in the room by Andrew Stannard, our Chief Financial Officer. Let me start by saying we are extremely happy with this result, the execution process on the Platinum integration, and the broader performance momentum across our group. Touching briefly on the agenda, I am going to talk through the highlights for the year, including our financial results and the group's strategic process since the merger in October 2025, before moving on to our outlook. We will then finish up with your questions. In the first instance, let me turn to slide 4, a snapshot of our key metrics. In summary, at 30 June, our group funds under management was a touch over AUD 19 billion. This was largely driven by L1 Capital inflows and strong overall performance in those funds.

Julian Russell: Thank you, operator, and good morning, everyone. Thanks for joining today's call to go through our results for FY 2026. I am joined in the room by Andrew Stannard, our Chief Financial Officer. Let me start by saying we are extremely happy with this result, the execution process on the Platinum integration, and the broader performance momentum across our group.

Speaker #2: Let me start by saying we're extremely happy with this result, the execution process on the Platinum integration, and the broader performance momentum across our group.

Speaker #2: Touching briefly on the agenda, I'm going to talk through the highlights for the year, including our financial results and the group's strategic process since the merger in October 2025, before moving on to our outlook.

Julian Russell: Touching briefly on the agenda, I am going to talk through the highlights for the year, including our financial results and the group's strategic process since the merger in October 2025, before moving on to our outlook. We will then finish up with your questions. In the first instance, let me turn to slide four, a snapshot of our key metrics. In summary, at 30 June, our group funds under management was a touch over AUD 19 billion. This was largely driven by L1 Capital inflows and strong overall performance in those funds.

Speaker #2: We'll then finish up with your questions. In the first instance, let me turn to slide 4, a snapshot of our key metrics. In summary, at the 30th of June, our group funds under management was a touch over $19 billion.

Speaker #2: This was largely driven by L1 capital inflows and strong overall performance in those funds. Compared to FY25, our revenue is up 49%, and costs were down 15%, which translated into very strong profit growth. I'll expand in more detail on slide 5.

Julian Russell: Compared to FY25, our revenue is up 49% and costs are down 15%, which translated into very strong profit growth, which I will expand in more detail on slide 5. On any metric, this was an exceptional first year for L1 Group as a listed company. EBITDA was up 102% and NPAT was up 97%. Both were driven by a range of factors, including cost synergy realization, FUM growth, new product launches, and strong FUM performance driving significant performance fees. We have been able to achieve our synergies more quickly and in larger size than we had initially expected. By 30 June, we realized cost savings of AUD 31.7 million. For the second time, we are increasing the synergy target from AUD 35 million to AUD 43 million. Our funds under management have increased 17% in the year.

Julian Russell: Compared to FY 2025, our revenue is up 49% and costs are down 15%, which translated into very strong profit growth, which I will expand in more detail on slide five. On any metric, this was an exceptional first year for L1 Group as a listed company. EBITDA was up 102% and NPAT was up 97%. Both were driven by a range of factors, including cost synergy realization, FUM growth, new product launches, and strong FUM performance driving significant performance fees.

Speaker #2: On any metric, this was an exceptional first year for L1 Group as a listed company. EBITDA was up 102%, and NPAT was up 97%. Both were driven by a range of factors, including cost synergy realization, firm growth, new product launches, and strong fund performance driving significant performance fees.

Speaker #2: We've been able to achieve our synergies more quickly and in a larger size than we had initially expected. By the 30th of June, we realized cost savings of $31.7 million, and for the second time, we're increasing the synergy target from $35 million to $43 million.

Julian Russell: We have been able to achieve our synergies more quickly and in larger size than we had initially expected. By 30 June, we realized cost savings of AUD 31.7 million. For the second time, we are increasing the synergy target from AUD 35 million to AUD 43 million. Our funds under management have increased 17% in the year.

Speaker #2: Our funds under management have increased 17% in the year, while there were outflows in the Platinum strategies, largely pre-merger with L1. They've been more than offset by inflows and performance.

Julian Russell: While there were outflows in the Platinum strategies, largely pre-merger with L1, they have been more than offset by inflows and performance in the L1 Capital strategies. A key call-out here is that L1 Capital now manages 73% of group's FUM versus 55% at the time of the merger. The vast majority of L1 Capital funds have outperformed strongly in the period. Our flagship Long Short and Global Long Short strategies have delivered net returns of 45% and 58% respectively over the past year, which continues their impressive track record. The L1 Capital Catalyst Fund had an exceptional performance in FY26, delivering a 38% net return to our investors. The Gold strategy delivered 83% net performance over the same period across both the wholesale funds and since becoming a listed investment company, LGF.

Speaker #2: In the L1 Capital strategies, a key callout here is that L1 Capital now manages 73% of the group's funds, versus 55% at the time of the merger.

Speaker #2: The vast majority of L1 Capital funds have outperformed strongly in the period. Our flagship long-short and global long-short strategies have delivered net returns of 45% and 58%, respectively, over the past year, which continues their impressive track record.

Julian Russell: Our flagship Long Short and Global Long Short strategies have delivered net returns of 45% and 58% respectively over the past year, which continues their impressive track record. The L1 Capital Catalyst Fund had an exceptional performance in FY26, delivering a 38% net return to our investors. The Gold strategy delivered 83% net performance over the same period across both the wholesale funds and since becoming a listed investment company, LGF.

Speaker #2: The L1 Catalyst Funds had an exceptional performance in FY26, delivering a 38% net return to our investors. The Gold Strategy delivered 83% net performance over the same period across both the wholesale fund and, since becoming a listed investment company, LGF.

Speaker #2: It's worth flagging that the closure of the L1 wholesale gold funds generated a one-off performance fee of $79 million during the second half of FY26.

Julian Russell: It's worth flagging that the closure of the L1 Wholesale Gold Fund generated a one-off performance fee of AUD 79 million during the H2 of FY26. The recently listed LGF also has scope to generate performance fees. I'm pleased to say that the portfolio has generated positive returns since the IPO, despite a difficult backdrop for gold and gold equities. In addition to financial performance, there's been great strategic progress in the group since the merger summarized on slide 6. The capital raise in late October has given us the flexibility to make a number of compelling investments that we expect to deliver new earning streams and very attractive returns on invested capital. There are many call-outs on this slide, but I'll talk to just a few initiatives.

Speaker #2: The recently listed LGF has also coped to generate performance fees, and I'm pleased to say that the portfolio has generated positive returns since the IPO, despite a difficult backdrop for gold and gold equities.

Speaker #2: In addition to financial performance, there has been great strategic progress in the group since the merger, summarized on slide 6. The capital raising in late October has given us the flexibility to make a number of compelling investments that we expect to deliver new earnings streams and very attractive returns on invested capital.

Julian Russell: In addition to financial performance, there's been great strategic progress in the group since the merger summarized on slide 6. The capital raise in late October has given us the flexibility to make a number of compelling investments that we expect to deliver new earning streams and very attractive returns on invested capital. There are many call-outs on this slide, but I'll talk to just a few initiatives.

Speaker #2: There are many callouts on this slide, but I'll talk to just a few initiatives. After a process with PMC, that listed investment company became GLS, moving the management of the portfolio to L1's global long-short strategy.

Julian Russell: After a process with PMC, that listed investment company became GLS, moving the management of the portfolio to L1's Global Long Short strategy. We subsequently executed a one-for-one rights offering with a placement, effectively doubling the FUM of GLS to around AUD 950 million. Off the back of the successful GLS raising, we identified an opportunity to convert the wholesale gold funds into a listed investment company through an IPO, which was conducted in early April, again, raising about AUD 950 million in FUM. We invested further in our offshore distribution footprints, moving for the first time to establish a presence in the US and European markets.

Speaker #2: We subsequently executed a one-for-one rights offering with a placement, effectively doubling the firm of GLS to around $950 million. After the back of the successful GLS raising, we identified an opportunity to convert the wholesale gold funds into a listed investment company through an IPO, which was conducted in early April, again raising about $950 million in firm.

Julian Russell: Off the back of the successful GLS raising, we identified an opportunity to convert the wholesale gold funds into a listed investment company through an IPO, which was conducted in early April, again, raising about AUD 950 million in FUM. We invested further in our offshore distribution footprints, moving for the first time to establish a presence in the US and European markets.

Speaker #2: We invested further in our offshore distribution footprints, moving for the first time to establish a presence in the US and European markets. While we acknowledge it may take time for those offshore distribution investments to generate a return for us in the form of new flows, we feel that we have high-quality funds and a strong initial response from prospective offshore clients that justifies us making the long-term investment.

Julian Russell: While we acknowledge it may take time for those offshore distribution investments to generate a return for us in the form of new flows, we feel that we have high-quality funds and a strong initial response from prospective offshore clients that justifies us making the long-term investment. We expect to add another 1 or 2 people to this team in the near term. In relation to other strategic initiatives, we announced the PXE Advisors joint venture, our first joint venture since Catalyst launched in 2021. Chris Ashman, our Head of Partnerships, has recently commenced in New York and has begun building a pipeline of prospective joint venture partners for us in North America. Today, we are formally announcing that L1 Capital will launch an Australian small cap strategy.

Speaker #2: We expect to add another one or two people to this team in the near term. In relation to other strategic initiatives, we announced the PXC Advisors joint venture, our first joint venture since Catalyst launch in 2021.

Julian Russell: In relation to other strategic initiatives, we announced the PXE Advisors joint venture, our first joint venture since Catalyst launched in 2021. Chris Ashman, our Head of Partnerships, has recently commenced in New York and has begun building a pipeline of prospective joint venture partners for us in North America. Today, we are formally announcing that L1 Capital will launch an Australian small cap strategy.

Speaker #2: Chris Ashman, our Head of Partnerships, has recently commenced in New York and has begun building a pipeline of prospective joint venture partners for us in North America.

Speaker #2: And today, we are formally announcing that L1 Capital will launch an Australian small-cap strategy. Andrew Paros, who is a very well-regarded and experienced small-caps investor, will be joining L1 in late October to lead this strategy.

Julian Russell: Andrew Perros, who's a very well-regarded and experienced small caps investor, will be joining L1 in late October to lead this strategy. We'll provide an update on this nearer to the time. Overall, we've been very busy optimizing the combined business and laying the groundwork for continued growth. The financial outcomes in this year have also been pleasing, which I'll cover on slide 7. As I called out earlier, our FY26 underlying EBITDA was AUD 287.4 million, up 102% on FY25, and underlying NPAT was AUD 188.8 million, up 97% over the same period. This was an incredible result, reflecting the hard work and dedication of the team at L1 Group and importantly, the trust placed in us by our clients. The revenue number includes a AUD 79 million performance fee from the closure of the Wholesale Gold Fund. This should be viewed as a one-off when modeling our future results.

Speaker #2: We'll provide an update on this nearer to the time. Overall, we've been very busy optimizing the combined business and laying the groundwork for continued growth.

Speaker #2: The financial outcomes this year have also been pleasing, which I'll cover on slide 7. As I called out earlier, our FY26 underlying EBITDA was $287.4 million, up 102% on FY25, and underlying NPAT was $188.8 million, up 97% over the same period.

Julian Russell: As I called out earlier, our FY26 underlying EBITDA was AUD 287.4 million, up 102% on FY25, and underlying NPAT was AUD 188.8 million, up 97% over the same period. This was an incredible result, reflecting the hard work and dedication of the team at L1 Group and importantly, the trust placed in us by our clients. The revenue number includes a AUD 79 million performance fee from the closure of the Wholesale Gold Fund. This should be viewed as a one-off when modeling our future results.

Speaker #2: This was an incredible result, reflecting the hard work and dedication of the team at L1 Group, and, importantly, the trust placed in us by our clients.

Speaker #2: The revenue number includes a $79 million performance fee from the closure of the wholesale gold fund. This should be viewed as a one-off when modeling our future results.

Speaker #2: In the context of performance fees overall, we've had a solid year across the L1 stable, which contributes to organic cash generation. To provide you with some historical context for these performance fees, we've added a slide in Appendix B to highlight the performance fees of our L1 Capital funds over time.

Julian Russell: In the context of performance fees overall, we have had a solid year across the L1 stable, which contributes to organic cash generation. To provide you with some historical context for these performance fees, we have added a slide in Appendix B to highlight the performance fees of our L1 Capital funds over time. Given the strength of performance, our EBITDA and NPAT margins were higher than normal in FY26. Margin expansion was also driven by ongoing cost reductions outlined on slide 8. This chart illustrates the OpEx journey from the point of the merger announcement to our current position and to our estimate for FY27. Despite having only merged in October last year, we have already extracted AUD 31.7 million of synergies against a target range of AUD 35 million. As I mentioned earlier, we are increasing our synergy target from AUD 35 million to AUD 43 million.

Speaker #2: Given the margins were higher than normal in FY26, margin expansion was also driven by ongoing cost reductions outlined on slide 8. This chart illustrates the operating expense journey from the point of the merger announcement to our current position, and to our estimate for FY27.

Julian Russell: Margin expansion was also driven by ongoing cost reductions outlined on slide 8. This chart illustrates the OpEx journey from the point of the merger announcement to our current position and to our estimate for FY27. Despite having only merged in October last year, we have already extracted AUD 31.7 million of synergies against a target range of AUD 35 million. As I mentioned earlier, we are increasing our synergy target from AUD 35 million to AUD 43 million.

Speaker #2: Despite having only merged in October last year, we have already extracted $31.7 million of synergies against the target range of $35 million. As I mentioned earlier, we are increasing our synergy target from $35 million to $43 million.

Speaker #2: Based on what we can see in our group's plan, announced up to and including today, we are maintaining our guidance of approximately $95 million in OPEX for FY27, which includes some additional business investment.

Julian Russell: Based on what we can see in our group's plan announced up to and including today, we are maintaining our guidance of circa AUD 95 million in OpEx for FY27, which includes some additional business investment. However, I want to be very clear that any incremental revenue-generating opportunities announced going forward may cause this expense target number to increase. We are more focused on being proactive and nimble where we see compelling opportunities rather than running the business to achieve a preset expense target. One of the most pleasing trends in our business is our funds under management, which is outlined on slide 9. We have reported our funds in six segments, starting in the September quarter, being the last reference period before the merger was implemented. For the L1 Long Short funds, which includes a Global Long Short, the FUM has increased by over 59% or AUD 3.3 billion in the period.

Speaker #2: However, I want to be very clear that any incremental revenue-generating opportunities announced going forward may cause this expense target number to increase. We're more focused on being proactive and nimble where we see compelling opportunities, rather than running the business to achieve a preset expense target.

Speaker #2: One of the most pleasing trends in our business is our funds under management, which are outlined on slide 9. We have reported our funds in six segments, starting in the September quarter, being the last reference period before the merger was implemented.

Julian Russell: One of the most pleasing trends in our business is our funds under management, which is outlined on slide 9. We have reported our funds in six segments, starting in the September quarter, being the last reference period before the merger was implemented. For the L1 Long Short funds, which includes a Global Long Short, the FUM has increased by over 59% or AUD 3.3 billion in the period.

Speaker #2: For the L1 long-short funds, which includes a global long-short, the firm has increased by over 59%, or $3.3 billion, in the period. This was driven by a combination of strong net inflows, investment performance, and the public launch of the global long-short strategy in late 2025.

Julian Russell: This is driven by a combination of strong net inflows, investment performance, and the public launch of the Global Long Short strategy in late 2025. L1 Gold and affiliates fund have also increased significantly over the period. At the same time, we have seen positive stabilization trends in the Platinum funds through the H2 of FY26. We have laid out each of these strategies by FUM for your reference on slide 10. I will now move to slide 11 to talk about our clients. The diversity of our client base is an important and differentiated feature of our business. If you look at the FUM by client type in the middle of the slide, you can see that the vast majority of FUM is non-institutional and only 11% of our revenue comes from institutional clients.

Speaker #2: L1 Gold and affiliated firms have also increased significantly over the period. At the same time, we've seen positive stabilization trends in the Platinum funds through the second half of FY26.

Speaker #2: We've laid out each of these strategies by firm for your reference on slide 10. I'll now move to slide 11 to talk about our clients.

Julian Russell: We have laid out each of these strategies by FUM for your reference on slide 10. I will now move to slide 11 to talk about our clients. The diversity of our client base is an important and differentiated feature of our business. If you look at the FUM by client type in the middle of the slide, you can see that the vast majority of FUM is non-institutional and only 11% of our revenue comes from institutional clients.

Speaker #2: The diversity of our client base is an important and differentiated feature of our business. If you look at the firm by client type, in the middle of the slide, you can see that the vast majority of the firm is non-institutional, and only 11% of our revenue comes from institutional clients.

Speaker #2: That diversification by having tens of thousands of decision makers across retail, high net worth, family office, wholesale, staff, and LICs is a real strength of our business.

Julian Russell: That diversification, by having tens of thousands of decision-makers across retail, high net worth, family office, wholesale, staff, and LICs, is a real strength of our business. This diversity gives us considerable business resilience and provides us with the confidence to invest in the business and our funds for the long term. I will not present today's next two slides, 12 and 13, but I will make some brief points. Our flagship L1 Long Short fund has been the top-performing Australian-focused long-short fund since inception in 2014, generating an average 20% return per annum over that period. In FY26, it generated a 45.4% net return. The same team runs the Global Long Short strategy, which delivered 57.8% net performance for FY26. We expect this strategy to be a meaningful contributor to the group FUM and earnings growth over the near to medium term.

Speaker #2: This diversity gives us considerable business resilience and provides us with the confidence to invest in the business and our funds for the long term.

Speaker #2: I won't present today's next two slides to Help Them 13, but I'll make some brief points. Our flagship L1 long-short fund has been the top performer in Australian-focused long-short funds since inception in 2014.

Julian Russell: Our flagship L1 Long Short fund has been the top-performing Australian-focused long-short fund since inception in 2014, generating an average 20% return per annum over that period. In FY26, it generated a 45.4% net return. The same team runs the Global Long Short strategy, which delivered 57.8% net performance for FY26. We expect this strategy to be a meaningful contributor to the group FUM and earnings growth over the near to medium term.

Speaker #2: Generating an average 20% return per annum over that period. In FY26, it generated a 45.4% net return. The same team runs the global long-short strategy, which delivered 57.8% net performance for FY26.

Speaker #2: We expect this strategy to be a meaningful contributor to the group firm and earnings growth over the near to medium term. The L1 Catalyst Funds returned 38.3% net, and it is now the best-performing long-only large-cap Australian equities fund since its inception in July 2021.

Julian Russell: The L1 Capital Catalyst Fund returned 38.3% net and is now the best-performing long-only large-cap Australian equities fund since its inception in July 2021. A summary of performance for our funds can be found on slides 12 and 13. I will now move on to our group strategy on slide 15. The L1 Group strategy is defined by four pathways. Growth of existing funds through performance and flows, extension strategies using our existing investment teams to expand into new strategies, joint ventures where we can attract new talented teams to launch compelling investment products, and acquiring investment managers should a strategic and value-accretive opportunity arise. Each pathway aims to deliver high returns on capital with modest incremental risk.

Speaker #2: A summary of performance for our funds can be found on slides 12 and 13. I'll now move on to our group strategy on slide 15.

Speaker #2: The L1 Group strategy is defined by four pathways: growth of existing funds through performance inflows; extension strategies, using our existing investment teams to expand into new strategies; joint ventures, where we can attract new talented teams to launch compelling investment products; and acquiring investment managers, should a strategic and value-accretive opportunity arise.

Julian Russell: Growth of existing funds through performance and flows, extension strategies using our existing investment teams to expand into new strategies, joint ventures where we can attract new talented teams to launch compelling investment products, and acquiring investment managers should a strategic and value-accretive opportunity arise. Each pathway aims to deliver high returns on capital with modest incremental risk.

Speaker #2: Each pathway aims to deliver high returns in capital with modest incremental risk. As I mentioned earlier, we've had a very busy period—executing on each pathway, delivering firm growth, commencing two new extension strategies, establishing a new joint venture with PXC Advisors, and integrating the Platinum acquisition.

Julian Russell: As I went through earlier, we have had a very busy period executing on each pathway, delivering FUM growth, commencing two new extension strategies, establishing a new joint venture with PXE Advisors, and integrating the Platinum acquisition. We have a debt-free balance sheet with AUD 635 million of cash and seed investments, which is a valuable business asset and provides us with flexibility to take advantage of opportunities as they arise. I will touch on this in more detail on the following slides, starting with slide 16. This slide represents an illustration of L1 Group, namely where we have investment expertise, operating infrastructure, and global distribution capabilities. Our balance sheet really sets us apart. Today, we have roughly AUD 635 million in cash and seed capital, which can be deployed to accelerate joint venture partnerships, generate future revenue, and seed investment gains from new and existing strategies.

Speaker #2: We have a debt-free balance sheet, with $635 million of cash and seed investments, which is a valuable business asset and provides us with flexibility to take advantage of opportunities as they arise.

Speaker #2: I'll touch on this in more detail on the following slides, starting with slide 16. This slide represents an illustration of L1 Group, namely where we have investment expertise, operating infrastructure, and global distribution capabilities.

Julian Russell: I will touch on this in more detail on the following slides, starting with slide 16. This slide represents an illustration of L1 Group, namely where we have investment expertise, operating infrastructure, and global distribution capabilities. Our balance sheet really sets us apart. Today, we have roughly AUD 635 million in cash and seed capital, which can be deployed to accelerate joint venture partnerships, generate future revenue, and seed investment gains from new and existing strategies.

Speaker #2: Our balance sheet really sets us apart. Today, we have roughly $635 million in cash and seed capital, which can be deployed to accelerate joint venture partnerships.

Speaker #2: Generate future revenue and seed investment gains from new and existing strategies. We only allocate capital where we expect to generate strong returns. For example, the capital that we invested in both GLS and Goldlix Raisins allowed us to accelerate and de-risk the large capital Raisins, which ultimately created three earnings streams for L1G: management fees, performance fees, and return on seed capital invested.

Julian Russell: We only allocate capital where we expect to generate strong returns. For example, the capital that we invested in both GLS and Gold LIC raisings allowed us to accelerate and de-risk the large capital raisings, which ultimately created three earning streams for L1G, being management fees, performance fees, and return on seed capital invested. If you apply some conservative fund performance assumptions, each stream should generate a very attractive return on capital. At the same time, we are providing our clients or LIC shareholders with compelling investment proposition from a proven manager who has complete alignment of interest with them. Over the last 20 years, L1 has demonstrated its ability to identify exceptional investment talents, create joint venture structures, and deliver a compelling proposition for clients, our joint venture partners, and L1 Group shareholders. I will turn over to slide 17 and talk in more detail about our balance sheet.

Speaker #2: If you apply some conservative fund performance assumptions, each stream should generate a very attractive return on capital. At the same time, we are providing our clients, Orlick's shareholders, with a compelling investment proposition from a proven manager who is in complete alignment of interest with them.

Julian Russell: At the same time, we are providing our clients or LIC shareholders with compelling investment proposition from a proven manager who has complete alignment of interest with them. Over the last 20 years, L1 has demonstrated its ability to identify exceptional investment talents, create joint venture structures, and deliver a compelling proposition for clients, our joint venture partners, and L1 Group shareholders. I will turn over to slide 17 and talk in more detail about our balance sheet.

Speaker #2: Over the last 20 years, L1 has demonstrated its ability to identify exceptional investment talents, create joint venture structures, and deliver a compelling proposition for clients or joint venture partners, as well as L1 Group shareholders.

Speaker #2: I'll turn over to slide 17 and talk in more detail about our balance sheet. One important thing to bear in mind is that L1 Group has two key assets.

Julian Russell: One important thing to bear in mind is that L1 Group has two key assets, our operating business and our cash and seed investment portfolio. As of 30 June, we had AUD 459 million of seed investments, as summarized here in the table. We also had a further AUD 176 million in cash available for future opportunities, some of which are already sitting in our fund pipeline. When you are assessing L1G's P/E multiple, I would encourage you to look at our market cap net of this cash and seed number, as highlighted in the table on the top right-hand side of the slide, particularly given that we do not report our unrealized gains in our income statement. With that, I will move across to slide 19, our outlook for FY27 and beyond.

Speaker #2: Our operating business and our cash and seed investment portfolio. As of the 30th of June, we had $459 million of seed investments, as summarized here in the table.

Speaker #2: We also had a further $176 million in cash available for future opportunities, some of which are already sitting in our fund pipeline. When you're assessing L1G's PE multiple, I'd encourage you to look at our market cap net of this cash and seed number, as highlighted in the table in the top right-hand side of the slide.

Julian Russell: When you are assessing L1G's P/E multiple, I would encourage you to look at our market cap net of this cash and seed number, as highlighted in the table on the top right-hand side of the slide, particularly given that we do not report our unrealized gains in our income statement. With that, I will move across to slide 19, our outlook for FY27 and beyond.

Speaker #2: Particularly given that we don't report our unrealized gains in our income statement. So, with that, I'll move across to slide 19, our outlook for FY27 and beyond.

Speaker #2: The purpose of this slide is to provide you with clarity on our earnings drivers, broadly separated into the near term, the FY27 period, and the medium term, which we define as FY28 and beyond.

Julian Russell: The purpose of this slide is to provide you clarity on our earnings drivers, broadly separated into the near term, the FY27 period, and the medium term, which we define as FY28 and beyond. We have a few moving parts, such as the Platinum integration period, GLS fee holiday, and cost synergies. In terms of direction, we expect moderate fund growth, such that L1 Capital fund growth will more than offset Platinum outflows. In the medium term, we expect growth will come from existing funds through performance and flows, from new funds, joint ventures, and any bolt-on acquisitions, as well as the broader deployment of our balance sheet. Other notable call-outs are the L1 Capital Catalyst Fund, which has decided to return AUD 380 million of fund to an industry super fund to free up capacity for more profitable growth in that fund.

Speaker #2: We have a few moving parts, such as the Platinum integration period, the GLS fee holiday, and cost synergies. In terms of direction, we expect moderate firm growth such that L1 Capital firm growth will more than offset Platinum outflows.

Speaker #2: In the medium term, we expect growth will come from existing funds through performance inflows; from new funds, joint ventures, and any bolt-on acquisitions; as well as the broader deployment of our balance sheet.

Julian Russell: In the medium term, we expect growth will come from existing funds through performance and flows, from new funds, joint ventures, and any bolt-on acquisitions, as well as the broader deployment of our balance sheet. Other notable call-outs are the L1 Capital Catalyst Fund, which has decided to return AUD 380 million of fund to an industry super fund to free up capacity for more profitable growth in that fund.

Speaker #2: Other notable callouts are the L1 Catalyst strategy, which has decided to return $380 million of firm capital to an industry super fund to free up capacity for more profitable growth in that fund.

Speaker #2: This is expected to have less than $1 million impact on our management fee revenue in FY27. As it relates to revenue, for GLS Licks we offered shareholders a management fee holiday for the first 12 months, which ends in late November this year.

Julian Russell: This is expected to have less than a AUD 1 million impact on our management fee revenue in FY27. As it relates to revenue, for GLS LIC, we offered shareholders a management fee holiday for the first 12 months, which ends in late November this year. The group will be entitled to that management fee for GLS thereafter. Finally, on synergies, we have executed well and positively reset the synergies target again today for the second time. Based on what we can see in our group plan as of today, we are continuing to guide to circa AUD 95 million in OpEx for FY27. To summarize, the core earnings have a level of predictability subject to normal markets. If you back out the one-off wholesale gold performance fee and perhaps the other exceptional fees like Catalyst this year, you get more of a baseline for L1 Group earnings in FY26.

Speaker #2: The group will be entitled to that management fee for GLS thereafter. Finally, on synergies, we have executed well and have positively reset the synergies target again today for the second time.

Julian Russell: Finally, on synergies, we have executed well and positively reset the synergies target again today for the second time. Based on what we can see in our group plan as of today, we are continuing to guide to circa AUD 95 million in OpEx for FY27. To summarize, the core earnings have a level of predictability subject to normal markets. If you back out the one-off wholesale gold performance fee and perhaps the other exceptional fees like Catalyst this year, you get more of a baseline for L1 Group earnings in FY26.

Speaker #2: Based on what we can see in our group plan as of today, we are continuing to guide to approximately $95 million in OPEX for FY27.

Speaker #2: To summarize, the core earnings have a level of predictability, subject to normal markets. If you back out the one-off wholesale gold performance fee, and perhaps the other exceptional fees like Catalyst this year, you get more of a baseline for L1 Group earnings in FY26.

Speaker #2: You can then make assumptions around the starting firm position and normal market growth. But note that we do make trust distributions and pay dividends from most of our fund base, so please adjust for this.

Julian Russell: You can then make assumptions around the starting fund position and normal market growth. But note that we do make trust distributions and pay dividends from most of our fund base, so please adjust for this. We provided historical performance fees in Appendix B so you can make your own assumptions around this too. I will wrap up on the last slide. In terms of earnings levers, organic growth through performance and flows remain the highest priority. We expect the L1 Capital Global Long Short Fund to be a material contributor to earnings growth over the near to medium term. The performance of this strategy, alongside many other strategies, should add momentum here. With our Head of Partnerships in North America now on deck, we have begun looking at several partnerships with new affiliates, where the strategies will provide L1G with equity ownership of a high-quality manager and with valuable co-investment opportunities.

Speaker #2: We have provided historical performance fees and Appendix B so you can make your own assumptions around this as well. I'll wrap up on the last slide.

Speaker #2: In terms of earnings levers, organic growth through performance inflows remained the highest priority. We expect Global Long Short to be a material contributor to earnings growth over the near to medium term.

Julian Russell: We expect the L1 Capital Global Long Short Fund to be a material contributor to earnings growth over the near to medium term. The performance of this strategy, alongside many other strategies, should add momentum here. With our Head of Partnerships in North America now on deck, we have begun looking at several partnerships with new affiliates, where the strategies will provide L1G with equity ownership of a high-quality manager and with valuable co-investment opportunities.

Speaker #2: The performance of this strategy, alongside many other strategies, should add momentum here. With our Head of Partnerships in North America now on deck, we've begun looking at several partnerships with new affiliates, where the strategies will provide L1G with equity ownership of a high-quality manager and with valuable co-investment opportunities.

Speaker #2: The small cap strategy will commence before the end of this calendar year, and as I mentioned earlier, the Platinum integration has been progressing at a faster-than-expected pace, with much stronger financial benefits than we initially expected.

Julian Russell: The small cap strategy will commence before the end of this calendar year. As I mentioned earlier, the Platinum integration has been progressing at a faster than expected pace with much stronger financial benefits than we initially expected. Finally, on M&A opportunities, we do not need to do any M&A to continue to deliver attractive organic growth across the group. We will, however, remain very selective on M&A and consider deals that would deliver significant benefits for L1G shareholders. There is significant momentum across our business, and we are very positive on the outlook for the group. This positivity stems from a fantastic culture that is totally focused on our clients, supporting each other and delivering investment excellence. We have had strong performance in the year, new funds in development, and an emerging pipeline of joint venture partners, all supported by a very strong balance sheet.

Speaker #2: Finally, on M&A opportunities, we don't need to do any M&A to continue to deliver attractive organic growth across the group. We will, however, remain very selective on M&A and consider deals that would deliver significant benefits for L1G shareholders.

Speaker #2: There is significant momentum across our business, and we are very positive about the outlook for the group. This positivity stems from a fantastic culture that is totally focused on our clients, supporting each other, and delivering investment excellence.

Julian Russell: There is significant momentum across our business, and we are very positive on the outlook for the group. This positivity stems from a fantastic culture that is totally focused on our clients, supporting each other and delivering investment excellence. We have had strong performance in the year, new funds in development, and an emerging pipeline of joint venture partners, all supported by a very strong balance sheet. In that context, we feel like we're in a great position to deliver continued growth for our shareholders. Now with that, I'll hand back to the operator for questions.

Speaker #2: We've had strong performance this year, new funds in development, and an emerging pipeline of joint venture partners, all supported by a very strong balance sheet.

Speaker #2: In that context, we feel like we're in a great position to deliver continued growth for our shareholders. Now, with that, I'll hand back to the operator for questions.

Julian Russell: In that context, we feel like we're in a great position to deliver continued growth for our shareholders. Now with that, I'll hand back to the operator for questions.

Speaker #1: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2.

Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. The first question today comes from Elizabeth Miliatis with Macquarie. Please go ahead.

Speaker #1: If you are on speakerphone, please pick up the handset to ask your question. The first question today comes from Elizabeth Miliatis with Macquarie.

Speaker #1: Please go ahead.

Speaker #3: Good morning, gentlemen, and thanks for taking my questions. My first question would be: are you able to give us a bit of color as to how you’re thinking about the capacity or fundraisings for either the PXD funds or the small cap funds that you’re currently working on?

Elizabeth Miliatis: Good morning, gentlemen, and thanks for taking my questions. First one from me would just be, are you able to give us a bit of color as to how you're thinking about the capacity or fundraising for either the PXC funds or the small cap funds, which you're working on currently?

Speaker #2: Morning, Liz. Thanks for your question. Look, on PXD, it's very early days, obviously, we announced it just on Friday. Although Andrew has performed very well in the sort of with the money we've allocated to him already, and we're pretty positive on that or sorry, we're very positive on that fund.

Julian Russell: Morning, Liz. Thanks for your question. Look, on PXC, it's very early days. Obviously, we announced it just on Friday. Andrew has performed very well with the money we've allocated to him already. We're very positive on that fund. Capital raising takes time, particularly with a three-year track record to discuss. We're reasonably positive on the fund, but we'd never, ever promise immediate growth out of that. It will take time to build it up. As it relates to small caps, we're really excited about Andrew joining us. I think with Andrew joining us, he joins us at the end of October, and we'll start that fund hopefully before the end of the year. Naturally, that will build up over time, but I wouldn't expect a lot added either to small caps or PXC, like a material amount until FY28 or FY29.

Speaker #2: Capital raising takes time, particularly with only a three-year track record to these guys. But yeah, we're reasonably positive on the funds, but I would never ever promise immediate growth—it will take time to build it up.

Speaker #2: As it relates to small caps, we're really excited about Andrew joining us. I think with Andrew joining us—he's joined us at the end of October—and we'll start that fund, hopefully, before the end of the year.

Julian Russell: As it relates to small caps, we're really excited about Andrew joining us. I think with Andrew joining us, he joins us at the end of October, and we'll start that fund hopefully before the end of the year. Naturally, that will build up over time, but I wouldn't expect a lot added either to small caps or PXC, like a material amount until FY28 or FY29.

Speaker #2: And naturally, that will build up over time, but I wouldn't expect a lot out of either the small caps or PXD—like, a material amount—until sort of FY28 or FY29.

Speaker #3: Okay, got it. And then just as a small question on PXD, I noticed that it's adopting the Platinum Tech Fund. Would you be sort of restating management fees and rebasing the fund performance there?

Elizabeth Miliatis: Okay, got it. Just a small question on PXC. I noticed that it is adopting the Platinum tech funds. Will you be restating management fees and rebasing the fund performance there? Is it the strategy going forward to pick up the existing Platinum funds and sort of re-roll them up into new L1 strategies like you have done with the Tech Fund and also the PMC fund as well?

Speaker #3: And is it the strategy going forward to pick up all the existing Platinum funds and sort of re-roll them up into new L1 strategies like you've done with the Tech Fund and also the PMC Fund as well?

Speaker #2: No, look, that's the smallest out of all the small platinum funds. So, we obviously look at the merits of each of those funds, but that was $100 million in funds under management.

Julian Russell: No, look, that is the smallest out of all the small Platinum funds. We obviously look at the merits of each of those funds, but that was AUD 100 million in funds under management, as you would see from the presentation. But really it was definitely coming on subscale. We have obviously given notice to unitholders to transfer that across. As it relates to the reporting of that, it was sent across in a similar way as we sent across Platinum International to David Steindl to run that fund. So it is basically a mandate from L1, and we as a 50/50 joint venture partnership, it comes back into us and you will see that in our accounts, going forward in terms of earnings.

Speaker #2: As you see from the presentation—but really, it was definitely coming out on sub-scale. And we've obviously given notice to unit holders to transfer it out across.

Speaker #2: As it relates to the reporting of that, it was sent across in a similar way as we sent across Platinum International to David Steintl to run that fund.

Julian Russell: As it relates to the reporting of that, it was sent across in a similar way as we sent across Platinum International to David Steindl to run that fund. So it is basically a mandate from L1, and we as a 50/50 joint venture partnership, it comes back into us and you will see that in our accounts, going forward in terms of earnings.

Speaker #2: So, it's basically a mandate from L1. And as a 50/50 joint venture partnership, it comes back into us, and you'll see that in our accounts going forward in terms of the earnings.

Speaker #4: Yeah, so we're not repricing, Liz. But there is obviously a piece of work from the product perspective in the medium term to bring together the Platinum and the L1 product range.

Andrew Stannard: Yeah. We are not repricing this, but there is obviously a piece of work from a product perspective in the medium term to bring together the Platinum and the L1 product range. But this is initial stage, the pricing and the underlying fund itself is not changed.

Speaker #4: But at this initial stage, the pricing and the underlying fund itself aren't changed.

Speaker #3: Okay, got it. And if I can ask one more final question just on M&A, what kind of things are you looking for?

Elizabeth Miliatis: Okay, got it. If I can take one more final one just on M&A, what kind of things are you looking for?

Speaker #2: Look, we get challenged on a lot of ideas. And you can see our strike rate over the last 19 years is one from many. And so, M&A is—we don't need it.

Julian Russell: Look, we get shown a lot of ideas. You can see our strike rate over the last 19 years is one from many. M&A is, we don't need it. We don't need to do M&A for driving organic growth, as I just said there on the call. We tend to look at opportunities, particularly domestic opportunities, where relevant. Look, there's not anything that we're looking at right now that blows the doors off the barn gate, I should say. There's nothing out there that really is that spectacular. They tend to emerge. When they emerge, they move pretty quickly. Right now, I can't say there's anything out there that we're really that attracted to.

Speaker #2: We don't need to do M&A for driving organic growth, as I just said there on the call, but we tend to look at opportunities, particularly domestic opportunities.

Speaker #2: We're relevant, but look, there's not anything that we're sort of looking at right now that blows the doors off the barn gate, I should say.

Speaker #2: It's not really—there's nothing out there that really is that spectacular. But they tend to emerge when they emerge. They move pretty quickly, but right now, I can't say there's anything out there that we're really that attracted to.

Speaker #3: Okay, got it. Thank you.

Elizabeth Miliatis: Okay, got it. Thank you.

Speaker #1: The next question comes from Fraser Noy with UBS. Please go ahead.

Operator: The next question comes from Fraser Noye with UBS. Please go ahead.

Speaker #5: Hi, gents. Just a couple of questions from me, starting with PXC. Can you help us understand a little bit more about how the economics work for L1 for this strategy?

Fraser Noye: Hi, gents. Just a couple of questions from me, just starting with PXE. Can you just help us understand a little bit more about how the economics work for L1 for this strategy? Is it 50% of the profits go to L1 and are there any intricacies as it relates to performance fees and any pass-throughs there?

Speaker #5: So is it 50% of the profits go to L1, and are there any intricacies as it relates to performance fees and any pass-throughs there?

Speaker #4: So, Fraser, it's Sandra here. I think the best way to think about this is very similar to the catalyst setup, except that it's 50/50.

Andrew Stannard: So Fraser, it's Sandra here. I think the best way to think about this is very similar to the Catalyst setup, except that it's 50/50. We will be bringing it in at 100% with an NCI at the bottom. So obviously to the extent there is performance fees, they will come in at 100% and then there will be an NCI at the bottom. So, very consistent with Catalyst.

Speaker #4: So we'll be bringing it in at 100%, with an MCI at the bottom. So obviously, to the extent there's performance fees, they'll come in at 100%, and then there will be an MCI at the bottom.

Speaker #4: So yeah, very consistent with the catalyst.

Speaker #5: Got you. And maybe just switching to cost—so you've obviously provided the cost outlook, and I appreciate that you've called out any further revenue-generating opportunities that may change this outlook.

Fraser Noye: Got you. And, maybe just switching to cost. You have obviously provided the cost outlook and appreciate you have called out any further revenue generating opportunities may change this outlook. Just interested if the cost associated with PXE, the transition there and the launch and then the small caps fund, is that included in the FY27 guidance as it relates today?

Speaker #5: Just interested if the cost associated with PXC, the transition there and the launch, and then the Small Caps Fund—is that included in the FY27 guidance as it relates today?

Speaker #2: Yes, it is. So, there's nothing—and I don't think there's been anything announced up until today—except small caps and PXC, particularly. There's no incremental cost that we see.

Julian Russell: Yes, it is. So there is nothing, and anything that has been announced up until and including today, except for small caps and PXE particularly, there is no incremental cost that we see. You can see in the waterfall chart that is provided on the synergies that we have added back some investments, business investments, and they fall under that category.

Speaker #2: You can see in the waterfall chart that's provided on the synergies that we've added back some business investments, and they fall under that category.

Speaker #5: Got you. Maybe just one last one, just on management fees. Are you saying that, sorry, in the first half of '27, it will dip below 100 basis points?

Fraser Noye: Got you. Maybe just one last one just on management fees. You are sort of saying that H1 2027, it will dip below 100 basis points. The exit was at about 97. Is that going to be flat half on half, or do you expect that to drift a little lower? And then maybe if you can just provide a little context on the compression in Platinum management fees half on half. Is that just international transitioning over to the L1 international?

Speaker #5: The exit was at about 97. Is that going to be flat, half-on-half, or do you expect that to drift a little lower?

Speaker #5: And then, maybe if you can just provide a little context on the compression in Platinum management fees, half-on-half—is that just international transitioning over to the L1 International?

Speaker #4: Yeah. So to taking the first bit first. So obviously, we've got 97 basis points average for the first for the second half. And we think all other things being equal, it will be a similar result for the first half of next financial year.

Andrew Stannard: Yeah. Taking the first bit first. Obviously, we have 97 basis points average for the H2. We think all other things being equal, it will be a similar result for the H1 of next financial year. The only rider I would put on that would be, obviously, any unusual changes to the mix across the business. In terms of Platinum, yes, you are quite right. It is a mix shift. Also, there is a small few basis points there related to the part period of the sub-advisory fee. Because this is annualized pro forma, 12 months, obviously, in the H1 of this financial year, we had the Q1 effectively was without a sub-advisory fee and the Q2 was with one. So you have a slight change there.

Speaker #4: The only rider I would put on that would be, obviously, any unusual changes to the mix across the business. In terms of platinum, yes, you're quite right.

Speaker #4: It's just a mixed shift, and also there's a small few basis points there related to the park period of the sub-advisory fee.

Andrew Stannard: Also, there is a small few basis points there related to the part period of the sub-advisory fee. Because this is annualized pro forma, 12 months, obviously, in the H1 of this financial year, we had the Q1 effectively was without a sub-advisory fee and the Q2 was with one. So you have a slight change there.

Speaker #4: So because this is annualized pro forma, 12 months, obviously, we the in the first half of this financial year, we had the first quarter effectively was without a sub-advisory fee, and the second quarter was with one.

Speaker #4: So, you've got a slight change there.

Speaker #5: Got it. Thank you.

Fraser Noye: Got it. Thanks, guys.

Speaker #1: The next question comes from Lath Soterio with MST Financial. Please go ahead.

Operator: The next question comes from Lafitani Sotiriou with MST Financial. Please go ahead.

Speaker #6: Good morning, and thank you for the opportunity to ask some questions. If I could start on slide 15—it kind of maps out the overall strategy. I'm just trying to better understand, because the JV and partnerships in New York City and issuing opportunities in the states don't exactly fit into any of these quadrants.

Lafitani Sotiriou: Good morning, and thank you for the opportunity to ask some questions. If I could start on slide 15, trying to map out the overall strategy.

Lafitani Sotiriou: Good morning, and thank you for the opportunity to ask some questions. If I could start on slide 15, trying to map out the overall strategy. I'm just trying to better understand, because the JV of partnerships in New York City and issuing opportunities in the States, it doesn't exactly fit into any of these quadrants. It may be joint ventures, but can you just elaborate the kind of things you may look at? Is it possible that you may distribute some funds over there, or are you looking to seed new funds? What does partnerships exactly mean, or what's under that umbrella?

Lafitani Sotiriou: I'm just trying to better understand, because the JV of partnerships in New York City and issuing opportunities in the States, it doesn't exactly fit into any of these quadrants. It may be joint ventures, but can you just elaborate the kind of things you may look at? Is it possible that you may distribute some funds over there, or are you looking to seed new funds? What does partnerships exactly mean, or what's under that umbrella?

Speaker #6: There may be joint ventures, but can you just kind of elaborate on the kinds of things you may look at? So, is it possible that you may distribute some funds over there, or are you looking to seed new funds?

Speaker #6: What exactly do partnerships mean, or what's included under that umbrella?

Speaker #2: Sure. That's a great question, Lath. And the answer is pretty straightforward. I mean, if you look at the four examples we've got on the page, they're all team left out.

Julian Russell: Sure. That's a great question, Lachlan. The answer is pretty straightforward. If you look at the four examples we've got on the page, they're all teams left out. So where you have an investment individual or an investment professional, I should say, or plus their team in some cases. The first one, the L1 Capital Global Opportunities Fund, which was the first joint venture that the guys did back in 2015 with David Feldman. He was based in New York at the time. He's now in Miami. But effectively, we did their back office, middle office, legal, all the usual stuff, and gave him distribution, which has obviously loaded him up with form, and he's at capacity now.

Speaker #2: So where you have an investment individual, or an investment professional, I should say, or plus their team in some cases—the first one, the Global Opportunities Fund, which is the first joint venture that the guys did back in 2015 with David Feldman. He was based in New York at the time.

Julian Russell: He was based in New York at the time. He's now in Miami. But effectively, we did their back office, middle office, legal, all the usual stuff, and gave him distribution, which has obviously loaded him up with form, and he's at capacity now. But I guess the intention is to replicate that out, which we did obviously with David Steindl and obviously with James as well, and Carlos and David on the UK property, and now with Dr. Andrew Lynn of PXC.

Speaker #2: He's now in Miami. But effectively, we did the back office, middle office, legal, all the usual stuff, and gave him distribution, which is obviously letting him up with FOM, and he's had capacity now.

Speaker #2: But I guess the intention is to replicate that out, which we did obviously with David Steinhold and also with James as well, and Catalyst, and David on the UK property.

Julian Russell: But I guess the intention is to replicate that out, which we did obviously with David Steindl and obviously with James as well, and Carlos and David on the UK property, and now with Dr. Andrew Lynn of PXC. But we'll aim to either find the hedge funds in the US, particularly in the US, but equities funds in particular, and either bring that team out and establish them in a new fund or effectively find a very small subscale fund, which is struggling to raise money and effectively take out some of their costs with the middle and back office support and give them the distribution that they require to grow the business. That's really how we aim to build out the business in the US and the rest of the world, for that matter.

Speaker #2: And now with Dr. Andrew Lynn, with PXC, but we'll aim to either find the hedge funds in the US, particularly in the US, but equities funds in particular, and either bring that team out and establish them in a new fund or effectively find a very small sub-scale fund, which is struggling to raise money and effectively take out some of their costs with the middle of back office support and give them the distribution that they're required to grow the business.

Julian Russell: But we'll aim to either find the hedge funds in the US, particularly in the US, but equities funds in particular, and either bring that team out and establish them in a new fund or effectively find a very small subscale fund, which is struggling to raise money and effectively take out some of their costs with the middle and back office support and give them the distribution that they require to grow the business. That's really how we aim to build out the business in the US and the rest of the world, for that matter.

Speaker #2: And that's really how we aim to build out the business in the US, and the rest of the world for that matter.

Speaker #4: So, there's really two heavy hitters in the States. So think about the States as two things that are happening. One is we've got a very senior person beating the bushes to build the sales for the L1 product range.

Andrew Stannard: So there's really-

Lafitani Sotiriou: Yeah, got it.

Andrew Stannard: There's really two heavy hitters in the States. Think about the States, two things that are happening. One is we've got a very senior person beating the bushes to build the sales for the L1 product range. Then we have another very senior person in a separate role who's looking for new partnership opportunities across that market.

Speaker #4: And then we have another very senior person, in a separate role, who's looking for new partnership opportunities across that market.

Speaker #6: Yeah, no, got it. That makes sense. And so, but with the States and also with Australia and the Small Cap Fund, are we looking at scenarios where it's 100% ownership by L1? Or should we expect all of them to be sort of equity percentage that you own going forward?

Lafitani Sotiriou: Yeah, no, got it. That makes sense. With the States and also with Australia and the small cap fund, are we looking at scenarios where it's 100% ownership by L1, or should we expect all of them to be equity, percentage that you own

Andrew Stannard: Yeah

Lafitani Sotiriou: going forward?

Speaker #2: No, that's a great question. So, I think with the Small Caps fund, in particular with Andrew, he's coming on as an L1 employee, in the same way as any sort of investment analyst or investment portfolio manager would come on, really as an employee.

Julian Russell: No, that's a great question. I think with the small caps fund, in particular with Andrew, he's coming on as an L1 employee, like the same way as any sort of investment analyst or investment portfolio manager will come on really as an employee. So we'll own 100% of that, and there's a structure to incentivize Andrew to perform. On the US market opportunities, because we're not established over there and M&A is inherently quite risky, as we've learned through history from observing some of our peers, international M&A doesn't always go the way you want it to go. There's obviously exceptions to that rule. But, for the most part, we think the joint venture, the 50/50 of establishing a partner in the US, we've already got a track record of one so far.

Speaker #2: So, we'll earn 100% of that, and there's a structure to incentivize Andrew to perform. On the US market opportunities, because we're not established over there and M&A is inherently quite risky—as we see in history from observing some of our peers—international M&A doesn't always go the way it was intended to.

Julian Russell: On the US market opportunities, because we're not established over there and M&A is inherently quite risky, as we've learned through history from observing some of our peers, international M&A doesn't always go the way you want it to go. There's obviously exceptions to that rule. But, for the most part, we think the joint venture, the 50/50 of establishing a partner in the US, we've already got a track record of one so far.

Speaker #2: And there are obviously exceptions to that rule, but for the most part, we think the joint venture, the 50/50 of establishing a partner in the US—we've already got a track record of one.

Speaker #2: So far, but effectively, if you establish a partner over there and it's roughly 50/50 equity, and we do all the middle and back office and distribution for them, and they effectively just pick stocks all day long, and they don't get distracted with running their own business, we think the 50/50 equity model works well because they effectively are autonomous, other than just compliance and legal and so on.

Julian Russell: But effectively, to establish a partner over there, and it's roughly 50/50 equity, and we do all the middle and back office, the distribution for them, and they effectively just pick stocks all day long, and they don't get distracted with running their own business. We think the 50/50 equity model works well because they effectively are autonomous, other than just compliance and legal and so on. They're autonomous to L1, and they're fully aligned to us, and alignment's core to our central value and our thesis of these joint ventures.

Speaker #2: They're autonomous to L1, and they will—they're fully aligned to us, and alignment is core to our central value and our thesis of these joint ventures.

Lafitani Sotiriou: Got it. What about in Australia? Are you largely, is that a hunting ground that you expect to expand in as well? Are there other strategies you're looking at, or was that just more opportunistic, whereas the US and expanding via joint ventures probably the top of the list? Is there anything else we're missing in possible expansion?

Speaker #6: And so, got it. And so then what about in Australia? So are you largely—I mean, is that a hunting ground that you expect to expand in as well? Like, are there other strategies you're looking at, or was that just more opportunistic, whereas the US and expanding via joint ventures is probably the top of the list?

Speaker #6: Is there anything else we're missing in possible expansion?

Speaker #2: Oh, look, it's probably on M&A in Australia. We'd never rule anything out, not with some of the more recent comments to Liz there, but we'll assess every opportunity as it comes across our desk.

Julian Russell: Look, it's probably on M&A in Australia, we'd never rule anything out. Not the time or recent mode or comments to Liz there. But we'll assess every opportunity as it comes across our desk. But in terms of joint ventures in Australia, we'd still look at doing joint ventures, and we have looked at joint ventures for different types of products, where we don't necessarily have the skill in-house or where we don't want to bring it in-house. So there's a few examples of that where we've looked at it in the past. So we wouldn't rule out joint ventures in Australia. We just think the overseas market is a bit more tricky in terms of going 100% in where you're hiring managers that we don't know necessarily very well.

Speaker #2: But in terms of joint ventures in Australia, we'd still look at doing joint ventures, and we have looked at joint ventures for different types of products.

Speaker #2: Where we don't necessarily have the skill in-house, or where we don't want to bring it in-house. And so, there's a few examples of that where we've looked at it in the past.

Julian Russell: So there's a few examples of that where we've looked at it in the past. So we wouldn't rule out joint ventures in Australia. We just think the overseas market is a bit more tricky in terms of going 100% in where you're hiring managers that we don't know necessarily very well. To de-risk that, we think joint ventures is the safest possible way of quasi and organic growth into those offshore markets.

Speaker #2: So, we wouldn't rule out joint ventures in Australia. We just think the overseas market is a bit more tricky in terms of going 100% in, where you're hiring managers that we don't necessarily know very well.

Julian Russell: To de-risk that, we think joint ventures is the safest possible way of quasi and organic growth into those offshore markets.

Speaker #2: And so, to de-risk, we think joint ventures are the safest possible way of quasi and organic growth into those offshore markets.

Speaker #6: Got it. Just two more questions, if I may. So, just moving on to some of the plant and brand—really strong performance in Health Science and Technology.

Lafitani Sotiriou: Got it. Just two more questions, if I may. Just moving on to some of the Platinum brands, really strong performance in Health Sciences and Technology. What are some ways that you could potentially catapult those strategies? But then equally, Brands portfolio was probably one of the weak spots. Can you talk us through what happened there?

Speaker #6: What are some ways that you could potentially catapult those strategies? But then equally, brand portfolio is probably one of the weak spots. Can you talk us through what happened there?

Speaker #2: Yeah, sure. So, if you look at it, I think over time, health science has been a pretty steady performer, and its performance last year certainly peaked client interest.

Julian Russell: Yeah, sure. Look, if you look at it, I think over time, Health Sciences has been a pretty steady performer. Last year's performance certainly piquing client interest, so it is getting a lot of inbounds, as well as our distribution team will market each of the smaller Platinum funds. Potentially aim to raise some money for them. Certainly in Japan, the Platinum Japan Fund has got a lot of traction with our clients, and we have seen some positive flow in that direction. To that, albeit it is 30 days. Brands is a strategy that it is consumer long-short for want of a different word. The performance of that over the last 12 months has been actually quite disappointing. We expect a turnaround in that as well. We have spoken to their portfolio manager, and we have got reasonable expectations for that turnaround.

Speaker #2: So, it's getting a lot of inbounds. As well as our distribution team, we'll market each of the smaller Platinum funds, and potentially aim to raise some money for them.

Speaker #2: Certainly, in Japan, the Japan fund has got a lot of traction with our clients, and we've seen some positive flow in that direction—albeit it's early days.

Julian Russell: To that, albeit it is 30 days. Brands is a strategy that it is consumer long-short for want of a different word. The performance of that over the last 12 months has been actually quite disappointing. We expect a turnaround in that as well. We have spoken to their portfolio manager, and we have got reasonable expectations for that turnaround.

Speaker #2: Brands is a strategy that is consumer long/short for the ones with a different word, but the performance of that over the last sort of 12 months has been actually quite disappointing.

Speaker #2: But we expect a turnaround in that as well. We've spoken to the portfolio manager, and we have reasonable expectations for that turnaround. Performance, obviously, leads to flows.

Julian Russell: Performance obviously leads flows and something like Health Sciences, or any of the other strategies, Platinum Asia Fund, for example, is getting good traction with our client base as well. We just need to spend more time in front of clients to generate more inflow into those strategies.

Speaker #2: And so something like health sciences, or any of the other strategies, Asia, for example, is getting good traction with our client base as well, and we just need to spend more time in front of clients to sort of generate more influence in those strategies.

Lafitani Sotiriou: Brian, just one final question just on the seeding in seed capital, that is a good chart that you provided, but there has been a lot of moving pieces in the last period. Is that more of what we should expect, or is there a bit of just clean up of the two business combination for reallocating that seed capital?

Speaker #6: All right, and just one final question, just on the seeding capital. That’s a good chart that you provided, but there’s been a lot of moving pieces in the last period.

Speaker #6: Is that more of what we should expect, or is there a bit of just cleanup from the two business combinations, or reallocating that seed capital?

Speaker #2: Yeah, we look at it quite flexibly in terms of the seed capital, moving it around. The cleanup, the movements you can see there are naturally—particularly the bottom two, GW and K&R, and Trust.

Julian Russell: Yeah, we look at it as quite flexibly in terms of the seed capital and moving it around. The clean up, the movements you can see there are naturally, particularly the bottom two, GW&K and RNTrust, have certainly been stuff that we did as part of the restructure. Obviously, PLI, the Asia investments, we are obviously very positive on Asia cam as funds, but that was just a recycling opportunity that we saw. We are constantly looking at our seed in terms of where we can generate the best possible return on capital, that does not always sit only with Platinum strategies. We look at it all across the board, right? Including L1, so we certainly will try and allocate the shareholder capital in the most appropriate manner, as I said a few minutes ago, to generate the highest possible return on capital for that seed.

Speaker #2: There have certainly been things that we did as part of the restructure. And obviously, PAI, the Asia investments—we're obviously very positive on the Asia account and its funds—but that was just a recycling opportunity that we saw.

Speaker #2: But we do. We're constantly looking at our seed, in terms of where we can generate the best possible return on capital. And that doesn't always sit only with platinum strategies.

Julian Russell: We are constantly looking at our seed in terms of where we can generate the best possible return on capital, that does not always sit only with Platinum strategies. We look at it all across the board, right? Including L1, so we certainly will try and allocate the shareholder capital in the most appropriate manner, as I said a few minutes ago, to generate the highest possible return on capital for that seed.

Speaker #2: We're looking at the whole, across the board, right? And so we've included L1. So we certainly will try and allocate the shareholder capital in the most appropriate manner, as I said a few minutes ago, to generate the highest possible return on capital for that seed.

Speaker #6: Thank you.

Lafitani Sotiriou: Thank you.

Speaker #1: Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. The next question comes from Olivier Coulon with E&P Financial Group.

Operator: Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. The next question comes from Olivier Coulon with E&P Financial Group. Please go ahead.

Speaker #1: Please go ahead.

Olivier Coulon: Oh, hi guys. Not sure if you answered this because I got on a little bit late. The L1 Capital Catalyst Fund of AUD 380 million that gets returned, when does that come off and what is, I guess, your expectation on incremental margin or revenue margin on that money if and when you come back fill it?

Speaker #7: Hi, guys. Not sure if you answered this because I got on a little bit late. The L1 catalyst of $380 million that gets returned.

Speaker #7: So when does that come off? And then what is, I guess, your expectation on incremental margin or revenue margin on that money if you—if and when you come back?

Speaker #7: So?

Speaker #2: Sure. So that's coming off in this quarter. We wanted to flag it here while we, I guess, while we hold the conch in this result.

Julian Russell: Sure. That is coming off in this quarter. We wanted to flag it here. I guess while we hold the conch in this result, we thought it would be a good opportunity to flag it so it did not just turn up in a quarterly or with no narrative around it. So really, what happened there is the L1 Capital Catalyst Fund has been performing very strongly. In fact, it is the top one of 92 funds that are large cap, long only Australian equities, which is an exceptional achievement for James and the team, given it is a concentrated 10 stock portfolio. That particular industry super fund wanted to lift its allocation further, and the fund was coming closer to capacity.

Speaker #2: We thought it would be a good opportunity to flag it so it didn't just turn up in a quarterly, or with no narrative around it.

Speaker #2: So really, what happened there is the Catalyst Fund has been performing very, very strongly. In fact, it was top—one of 92 funds that are large-cap, long-only Australian equities, which is an exceptional achievement for James and the team.

Julian Russell: In fact, it is the top one of 92 funds that are large cap, long only Australian equities, which is an exceptional achievement for James and the team, given it is a concentrated 10 stock portfolio. That particular industry super fund wanted to lift its allocation further, and the fund was coming closer to capacity.

Speaker #2: Given it's a concentrated sort of 10-stock portfolio, that particular industry super fund wanted to lift its allocation further, and the fund was coming closer to capacity.

Speaker #2: So we said no, and had a debate with them, and decided we'd give them back the funds — really, to create more capacity to add, as you rightly point out, a higher-margin client base.

Julian Russell: We said no and had a debate with them and decided we would give them back the funds really to create more capacity to add, as you rightly pointed out, a higher margin client base. Really, we are excited about the strategy itself, and we are excited about what James can do with that strategy with a higher margin effectively client base and the more profitability obviously it goes, we are a 65% holder in that as L1G. The performance you get plus the management fees, we would much rather a more traditional style L1 client, which is more wholesale than institutional or industry super fund. In terms of margin, we expect, it is hard to be very clear on what that is, but we expect the margin to be more than double from where it is currently.

Speaker #2: But really, we're excited about the strategy itself, and we're excited about what James can do with that strategy. With a higher margin, an effective client base, and more profitability, obviously, that goes towards the 65% holder in that, as L1G.

Speaker #2: And the performance he gets, plus the management fees, we'd much rather a more traditional style L1 client, which is more wholesale than institutional or industry super fund.

Julian Russell: The performance you get plus the management fees, we would much rather a more traditional style L1 client, which is more wholesale than institutional or industry super fund. In terms of margin, we expect, it is hard to be very clear on what that is, but we expect the margin to be more than double from where it is currently.

Speaker #2: In terms of margin, it's hard to be very clear on what that will be, but we expect the margin to be more than double from where it is currently.

Speaker #5: And we give up less than a million bucks in terms of annualized revenue.

Andrew Stannard: The give up is less than AUD 1 million in terms of annualized revenue, Olivier.

Speaker #7: Yeah. Okay. So that's coming up this quarter. Okay, thanks. Appreciate it.

Olivier Coulon: Yeah. Okay, so that's coming out this quarter.

Andrew Stannard: Yeah

Olivier Coulon: You expect it's double the margin. Okay, thanks. Appreciate it.

Speaker #2: Great. Thanks.

Julian Russell: Great. Thanks.

Speaker #1: There are no further phone questions at this time. I'll now hand the call back for closing remarks.

Operator: There are no further phone questions at this time. I will now hand the call back for closing remarks.

Speaker #2: Great, thank you, operator. Look, thank you everyone for joining the call, and thanks for your ongoing support of L1 Group.

Julian Russell: Great. Thank you, operator. Look, thank you, everyone, for joining the call, and thanks for your ongoing support of L1 Group.

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.

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