Nomura Holdings, Inc. (8604) Earnings Call Transcript

Thank you, everyone, for attending our Investor Day event. This is the third time I speak to you in this manner. Two years ago, I said that we are going to move the company towards a different stage and that we are working on expansion and strengthening private areas in addition to the public areas. The term private refers not only to products such as private equity, but also to the provision of products and services just for you. As you can see on this slide, we are strengthening our services that are customized for each client, we provide private and just for you through various measures related to the 3 axes of clients, products and services and delivery. Based on this strategy, we have promoted various initiatives over the past 2 years. The Retail Division has evolved into an asset consulting business in order to provide clients with comprehensive advice on medium- to long-term asset management and on assets other than securities. Since April last year, net increases in investment trusts and discretionary investments have continued and the amount of recurring assets that we are focusing on has expanded to nearly JPY 20 trillion. At the same time, recurring revenue, a stable source of revenue for us, has exceeded JPY 130 billion and is now able to cover approximately half of divisional expense. In April last year, we established the Investment Management Division to provide clients with opportunities to invest in alternatives in addition to traditional asset classes. We aim to further increase added value by bringing together diverse expertise within 1 organization to generate synergies and chemical reactions. As of March 31, the balance of AUM was JPY 67.9 trillion, an increase of approximately JPY 19 trillion over the past 2 years. Of this amount, approximately JPY 4 trillion was due to inflow of funds. We are also expanding the range of investment products available to investors in the private sector. Nomura SPARX, N-MEZ and Search Fund are the examples. The balance of alternative investments for which Nomura Asset Management selects investment managers exceeds JPY 800 billion, and further growth is expected in the future. The year before last, we established the content company by consolidating the contents of the group and the human resources involved. We believe that what differentiates us is content and the people. In terms of digital utilization, we launched smartphone applications for asset management and investment information, expanded our digital services and developed technologies such as blockchain and AI in collaboration with our overseas offices. I will talk about digitization of financial services and challenges that we are taking on in new areas later. Wholesale business is working to diversify and stabilize its revenue sources. Specifically, we are strengthening our solutions business, which is less susceptible to market fluctuations and our risk-light advisory business. In equity, revenues are growing, particularly in equity products in the Americas. In Investment Banking, synergies with Nomura Greentech have emerged and advisory revenues have grown significantly overseas, particularly in the Americas. As indicators to measure the outcome of these initiatives, we have defined solutions, structured finance; origination and advisory; and broader asset management business as our focus areas. Revenues from these focus areas have accumulated over the past 2 years and now account for approximately half of the total revenue of the 3 segments. I believe that we are in the midst of a paradigm shift. Market assumptions such as low interest rates and low inflation, which have been in place for many years, are changing dramatically. In Japan, after the collapse of the economic bubble and in the U.S. and Europe after the global financial crisis and the collapse of Lehman Brothers, there is a possibility that the inflation rate, which did not rise despite the efforts of governments and central banks to ease monetary policy, will be staying high over the medium to long term. In Japan, the long-lasting deflation seems to have finally ended. In addition to the disruption of global supply chains caused by the COVID-19 and Russia's invasion of Ukraine and heightened geopolitical risks may lead to unwinding of globalization and the development of anti-globalization measures, which may lead to inefficiencies in global economy. On the other hand, the area of new asset classes is rapidly expanding through the fusion of innovation brought about by blockchain and distributed ledger technology and traditional finance. The next generation of financial services is emerging, not just an extension of the existing system. In order to weather such an environment, it is necessary to change ourselves without being bound by conventional ideas and ways of doing things. Nomura Group's management vision for the fiscal year ending March 2025 is to achieve sustainable growth by solving social issues. Our financial goal of achieving ROE of 8% to 10% remains unchanged. The KGIs and KPIs set by each department to achieve this goal are shown here. The details will be explained in our presentation by each department head. Today, I would like to emphasize the following 3 points. The first is the strengthening of the domain-specific approach in the Retail Division. This is the key to accelerating the evolution into an asset consulting business, building up fee-based assets and increasing revenues. The second is to diversify and stabilize revenue for our wholesale business. In order to reduce fluctuations in revenue in an unpredictable market environment in the face of rising interest rates and inflation, it is essential to expand our equity and IB businesses in addition to fixed income. The same is true for each region. Finally, digital. There are 2 aspects to digital. One is digital as a technology for improving customer convenience and business efficiency. The other is digital as a new area or a new asset class. From now on, I would like to focus on these 3 points, including related items. Revenues for the 3 segments totaled approximately JPY 1.2 trillion for the year ended March 2022. Over the next 3 years, we aim to increase this figure by approximately JPY 280 billion and raise the top line to a range of JPY 1.4 trillion to JPY 1.5 trillion. Points 1 and 2 on this slide are areas in which management resources are allocated with priority. The key to the broader asset management business in 1 above is the -- is to accumulate fee-based assets. The Retail Division aims to increase its recurring assets to approximately JPY 26 trillion. The Retail Division aims to accelerate its strategic shift to asset consulting and provide private services tailored to each of our existing clients. At the same time, we are focused on increasing the number of clients to whom we deliver financial services through digital initiatives and collaboration with business partners. In other words, we want to increase the added value we provide, while at the same time, expanding the number of clients we serve. In order to achieve this, we will further evolve our segment with domain-based approach further under the leadership of a new division head. An executive officer in charge of each domain was appointed to formulate and implement the business strategies specific to each segment and to clarify the commitment to profitability with a view to both top line and cost. In particular, in addition to strengthening our wealth management business in which we have traditionally been a strong player, we will also work to provide highly convenient, digitally-enabled services that meet our client needs without requiring human intervention. We also have launched a cross-functional project for the workplace business. We will use a number of workplace services provided as a new KPI for our division to help expand the number of potential clients and improve the financial well-being of society as a whole. Nomura Group as a whole hopes to reach out to more than 10 million clients directly and indirectly, including those through LINE Securities. The Investment Management Division aims to increase AUM to JPY 79.1 trillion. To achieve this, in addition to traditional assets under management, it is essential to expand products in the alternative areas. Alliances and investments related to this initiative are also taking shape. For example, we recently announced the establishment of an asset management company to jointly manage a real estate fund with Nomura Real Estate Group. We are also advancing our management strategy for the private market, including the recently announced private credit in the Americas and the first publicly-offered Blackstone investment trust in Japan to invest in unlisted REITs in the U.S. As for alternative products, a new business area, we expect to earn approximately JPY 5 billion in fiscal year ending March 2025 and approximately JPY 15 billion annually in the future. Nomura Orient International Securities, which began operations in China in 2019, has been steadily accumulating a number of accounts and AUM of wealthy individuals and institutional investors. And while obtaining our licenses, we are aiming to further expand the business. Our Singapore-based wealth management business in Asia and the Middle East has grown to $13.5 billion in AUM and $96 million in annual revenues. Through the expansion of RM headcounts, we aim to -- and we aim to add up to $120 million in revenue by accumulating AUM. We are also working to further stabilize our wholesale revenue. Macro businesses such as rates and FX remain important revenue engines, but we plan to reduce our dependence on fixed income, which fluctuates widely in revenue, to about 35%. And we will do this by increasing risk-light businesses such as advisory and equities business, which is less correlated with fixed income. In the advisory and origination business, Nomura Greentech will leverage its sustainability strengths to focus on key sectors and expand into Asia and Europe. In addition, we are targeting 50% growth in advisory revenue over the next 3 years with an eye towards inorganic growth as well. At the same time, we will use the relationships with CEOs and managers developed through the advisory business to provide solutions. In the equities business, under the new leadership, we will expand the successful business model of the derivatives in the Americas to Asia and Japan and expand revenue by providing financial solutions and cross-border investment products. We will further integrate Nomura's execution services with Instinet to pursue scale and synergies. Decarbonization efforts are the result of new value created by finance. The increasing awareness towards climate change risks among pension and other institutional investors has led investee companies to aim for management with an eye towards the transition to a decarbonized society due to the impact on stock prices and financing. It also provides new value to investors with their investments contributing to climate action. Transition finance has also become a major trend in order to realize a smooth transition to a decarbonized society in a wide range of industries. In fact, it's said that USD 122 trillion will be needed if we are to decarbonize society and achieve carbon neutrality by 2050. The Nomura Group has set a goal of supporting $125 billion in sustainable finance over the 5 years to March 2026. In the year ended March 2022, the first year of the program, we supported the funding of roughly $21 billion. In addition, interest in ESG investment products is increasing, particularly among retail investors and the latest investment balance has grown to approximately JPY 750 billion. Finance plays an extremely important role in resolving social issues, including climate change. This is a field in which we have strengths such as Nomura Greentech, and we will increase our presence in the field of sustainability and as a result, expand our business and earnings. The use of digital technology is essential, not only to improve operational efficiency and customer convenience, but also to provide new value. The future innovation company, which has been planning and developing digital services and exploring new businesses since its inception has been reorganized into the digital company in order to expand and clarify the direction it will take. With a clear mission, responsibility and a sense of speed, we will move from the R&D phase to the business execution stage. In order to strengthen digital services for our clients, including complete digitalization without human intervention and to promote the group's digital transformation, we established a structure in which the director in charge of the digital company concurrently serves as the marketing officer in the Retail Division. In addition to promoting cross-divisional digital strategies, we will strengthen cooperation with affiliate companies, including LINE Securities. We have been actively working on digital assets as a new asset class. The founding of BOOSTRY and Komainu is an example. As part of our efforts to further strengthen these initiatives, we will establish a new subsidiary. To date, the group's digital asset initiatives have been promoted by 2 teams, the future innovation company, which has been focusing on security token offerings, and the wholesale digital office, which is working on leading-edge areas such as crypto assets and AI trading. This time, a new subsidiary will be established under the digital company formed by the members of the wholesale digital office. We will also actively employ people from outside the group with digital-native backgrounds and promote business with speed in the most advanced areas. Steve, the Head of Wholesale, will explain the details of the business later. Wholesale will leverage its expertise and client base to promote digital asset-related businesses, thereby connecting the traditional world of finance with the world of decentralized finance to provide a wide range of services to clients. We recognize that reinforcing risk management is the most important management issue for the Nomura Group to achieve sustainable growth. We are making efforts in line with the new framework released in October last year. In the front office, which is the first line of defense, we hired in the U.S., a global head to oversee risk control and a global head to oversee client activity management and internal collaboration. In risk management, the second line of defense, and internal audit, which is the third line, we are working to further strengthen our structure by reinforcing our platform and human resources. This, we believe, is an essential investment for Nomura's future growth. We have also revised our code of conduct so that all senior executives and employees have a stronger sense of responsibility for risk management, and we are actively evaluating and promoting appropriate actions through conduct-related workshops and training. We will continue strict cost controls, and we will work on digital improvements such as operational efficiency and productivity improvement and real estate cost reduction through our office strategy. At the same time, we will continue our growth investments. We will always consider inorganic strategies to accelerate growth if there are better opportunities both in Japan and abroad. In addition, in terms of human resources strategy, we will not change our existing stance on acquiring highly specialized human resources in all departments as well as the thorough implementation of pay for performance. As a result of these cost control measures and the expansion of investment income, we will reduce the cost/income ratio to 73% for the fiscal year ending March 2025. I'd also like to touch on capital. The application of the Basel III final rules in Japan was officially announced to be in March 2024. At the end of March 2022, our common equity Tier 1 capital ratio was 17.1%. If we apply the fundamental review of trading book and other finalization rules to the balance sheet at this point, we estimate that it will be less than 13% if the 100% standard method is used and less than 14% if we can partially apply the internal model and other measures, although there are still many uncertainties. Over the midterm, we aim to maintain a common equity Tier 1 ratio of at least 11%. Therefore, we can say that we are maintaining a level of capital that is sufficient to cope with the tighter regulations to be put in effect in 2 years' time. Of course, we will continue to monitor whether the resources allocated to each business are generating sufficient returns. And we will generate profits and accumulate retained earnings. On top of this, we will make comprehensive judgments on capital exceeding the 11% target from a variety of options, including investment in growth areas and shareholder return. I spoke today with the aim of achieving our targets for the fiscal year ending March 2025 and achieving a sustainable improvement in enterprise value on themes such as strengthening the segment-based approach in Japan, diversifying revenues for the wholesale business and digital initiatives. And we will do our best to address these issues. We are working to stabilize earnings in the highly volatile market environment that we see today. In the Americas and EMEA, in addition to our strong market-related businesses, we are working to expand the M&A advisory business centered on the Nomura Greentech as well as our business in the ESG and sustainability-focused industrial sectors. We will also strengthen and expand the team based on profitability they can achieve. In Asia, in addition to businesses with strengths such as FX and emerging that continue to generate good results, the equities business, which used to be an issue, has become profitable in recent years. International Wealth Management is also seeing growth in its earnings, and we will continue to expand in a measured way. In Japan, Nomura may have had a strong image of doing things in-house, but we have made a major shift to partnering with regional banks, SPARX, LINE and others. We are also continuing to work on changing our culture. The management team is strongly committed to employee engagement. And in the most recent employee survey, the percentage of favorable responses to the question regarding the direction of the company improved from 74% in the previous year to 83%. At the same time, as we discussed in the section on upgrading risk management, we are also actively working to improve the risk culture of all officers and employees. Group SMDs are conducting discussions throughout the year. This year's theme is Nomura's purpose, medium- to long-term contribution to capital markets and employee engagement. And I have set the themes for this initiative. In addition to the executives of the group companies, the same members, including the SMDs and above, have discussions for a year and make proposals. Since last year, we have set up a team to discuss Nomura's purpose and have had many employees participate in very constructive discussions. And I have taken a look at the proposals. They are very constructive and helpful proposals. And from my perspective, I think it's important to document the purpose, but I also think the whole process of the discussion itself is quite important. And I would like each employee to have the opportunity to consider the purpose of the firm as well as their individual purposes. And where the 2 purposes inter -- connect with each other, will lead to a better future for Nomura. Recently, when I talk with our clients, I often get the feedback that Nomura has changed for the better, which makes me very happy. However, changing itself is not the goal. Why -- what is the point of changing is something we need to rethink. And the reason why we have to change is to provide good services to clients and businesses that makes our clients happy and contribute to capital markets in the mid- to long term. As I said earlier, decarbonization efforts are an example of how finance is creating new value. Creating new value and generating revenue are synonymous with each other. And it is because it's a profitable business that we can deliver sustainable growth. The improvement of our corporate value and the sustainable growth of society as a whole are along the same path. And in this paradigm shift, our aim is to provide new value to our clients and society without being bound by precedents and in some cases, going beyond the boundaries of finance. And it is precisely for that reason that Nomura will take on new challenges going forward. Thank you for your attention.

Thank you very much. Next, from Retail Division, Mr. Sugiyama will deliver his presentation. Mr. Sugiyama, please.

Hello. I am Sugiyama. I'm in charge of Retail Division since April. Now market condition remains difficult, but we are committed to working on initiatives to obtain trust of customers and stabilize our revenue. Please take a look at Slide 1. Regarding the creation of flow or shift of funds from savings to investment. So that's what I would like to accomplish as the Head of Retail. Individual asset -- financial asset of JPY 2,000 trillion needs to be directly to appropriate circulation. In an age where people live to be 100 years, we would like to create the appropriate asset formation. And that's important for Nomura, which is a leading company, and this is critical for the future of Japan's financial industry, and it's a very critical mission on challenges to take on. So for the society and the future, what can we do while meeting the expectations of customers and the society we would like to grow? The management division of Nomura Group is to achieve sustainable growth while resolving social issues. The Prime Minister Kishida, at the beginning of month, struck out its policy of doubling the income based upon the asset and also facilitating the fund from savings to investment. As mentioned, so JPY 2,000 trillion of individual assets of Japan should be brought to the market. So that's the solution of ours for the society. As a leading firm in the industry, we would like to propose appropriate asset formation and asset management and facilitate sustainable asset circulation and contribute to the shift of funds from savings to investment and expansion of assets in the industry. Let me touch upon what we have accomplished in our business. Over the past several years, the biggest accomplishment is that we have been able to take root, the vision and the philosophy and directions of our organization, we could help them take root deeply in the organization. And we have worked on the evolution into the asset consulting business and recurring type business. We have worked on the transformation. And as a result, our recurring asset has steadily increased. And in March 2022, we reached a record high of JPY 19.6 trillion. And as for the recurring revenue, we've introduced level fee in full scale. So we have defined the balance base revenue and continuous revenue as recurring revenue. So based upon this new definition, the recurring revenue has exceeded JPY 130 billion. And what did we achieve as a result of evolution to asset consulting business? The consulting-related revenue in March 2022 reached JPY 16.7 billion. And this is the result that we could achieve because we provide wide solutions that are not limited to financial products. And based upon this situation, I'd like to explain what we would like to accomplish for March 2025. Our KGI is profit before tax. Last fiscal year, JPY 59.2 billion was achieved. And in March 2025, we would like to achieve JPY 110 billion to JPY 130 billion in pretax profit. Towards achieving the KGI, important thing is to accumulate recurring revenue, which is stable revenue source. So we'd like to accelerate our transformation towards fee-based revenue-making structure. At this time, we have redefined the recurring revenue, and we have also redefined our framework. Conventionally, we had categorized -- we had a category of consulting-related revenue and brokerage revenue and such revenues that's generated based upon transaction by clients. We applied flow revenue to those revenues. As for flow revenues, in the previous fiscal year, due to a deterioration of the market, brokerage revenue declined. But as a result of our close communication and follow-up with clients, our -- the relation between our sales partner and clients deepened and we believe we'll be able to leverage that into a positive in the recovering stage of the market. Next, KPI. We made some revision to the KPI items. For each KPI item, more details will be explained later. But -- our recurring revenue currently is JPY 19.6 trillion and we would like to grow it to JPY 25.8 trillion. And as for the net increase in recurring asset, we would like to grow from the previous year's JPY 477 billion to JPY 1.4 trillion annually. And we would like to grow the number of customers from who we are receiving flow revenue from the previous year's 1.5 million to 1.6 customers. Also, as for the expansion of client base in the future, to approach the active generation clients, we would like to leverage our unique strength, which is workplace services. So we have set a new KPI, the number of workplace-related services provided, and we are aiming to grow this number from the previous years, 3.36 million accounts to 3.66 million accounts. To achieve these goals, we are working on strengthening of domain-based business, digital strategy and alliance strategy. As a result, I believe it is my mission to transform the revenue-making structure and improvement of profit margin, so -- centering on the recurring revenue. So that, I believe, is my mission. So this shows the strategic vision of Retail Division. The last couple of years as a result of our -- the efforts of our employees, we have been able to help our thinking and philosophy and direction take root as a culture of the organization. Moving forward, based upon this philosophy, we would like to proceed on to the execution phase of the strategy. What we would like to accomplish is the provision of high-quality services to help resolve challenges faced by clients and to reach out to as many clients as possible. To do so, we have to be able to pursue more depth, width and length to be in line fully with clients' needs. For that, we would like to implement various measures. And to achieve our goals, we would like to monitor whether each of our strategy is working properly. And to monitor that -- monitor the progress, we have set 4 KPIs, which as I've touched upon. This shows the relation between domain-based business and digital. Moving forward, centering on digital, we will be expanding services. The digital is characterized by width and the length. Our sales partners are good with digging deeper. So that we can put more resources there, we would like to utilize digital strategies and meet one needs with digital so that we can dig deeper, where we can, with sales partners. Our sales partners will cultivate next-generation customers by approaching family members of customers, and they will place resources onto the value-added areas so that we can expand the each domain. Next, let me touch upon the domain-based business, which is the core strategy of retail channel. Moving forward, based upon characteristics of each domain, we'd like to speedily execute strategy. Over the last 2.5 years, we have promoted matching strategy in order to accelerate the business based upon domains, and we have put in place such structure. So based upon this structure, this fiscal year, we have appointed executive officers in charge of each domain. For the Retail Division and branches, we do have continuously the offices in charge. But the officers -- in addition, officers in charge of the domains, they will commit themselves to strengthening of strategy for each domain while taking responsibility in developing products and solutions for each domain. So under such structure, for each domain, we'd like to evolve our organization into a leaner organization as we aim to achieve KGIs and KPIs. Next, let me touch upon our strategy for strengthening our workplace business. Nomura's strength is our extensive reach to corporate clients, both listed and unlisted. The number of the workplace-service-related customers has reached now 3.36 million. And with the rising awareness of well-being among companies, we see the growing needs for various related services in the area of workplace services. So through workplace services, we are building touch points with employees. And by providing digital and application services to them, we would like to support them for 40 years while they are active and also another 40 years after their retirement. So we would like to provide end-to-end services from upstream to downstream and to do so, we'd like to establish necessary structure by leveraging our own strength. We would like to strengthen our approach to the active generation as well as young generation so that we can create a relation where we can stay close to our customers. And let me touch upon our digital strategy moving forward. So far, to improve efficiency of business, and there has been a huge progress in development of digital tools for our sales partners such as remote consulting and Nomura Navigations, they have been deployed and successfully improved customer satisfaction. Moving forward, the executive officer in charge of digital company will be also in charge of marketing so that client services could be provided by leveraging digital companies know-how. So digital marketing, UI/UX improvement and application provision through all those initiatives, we would like to stay close to customers along their customer journey. Next, alliance strategy. The other day, we announced the alliance with Oita Bank. But now -- Nomura has not been able to reach certain clients, but it is a critical strategy that will give us access to such clients. The regional banks have deep relation with local customers, and they have extensive network of branches, and that has a big synergy potential with our asset consulting foundation. Nomura Group alone, instead of the extending business based upon our own group, we can obtain new touch points with customers and by providing value-added services to such clients, we would like to make contribution to the development of regional society as well as the financial industry as a whole. In our performance, we already see the progress. In the net inflow of cash and securities, we achieved JPY 100 billion and recurring -- net increase in recurring asset, JPY 84 billion. So we saw a quite high level of inflow of funds. And toward achieving JPY 1.8 trillion target of AUM clients asset, we would like to collaborate closely with San-in Godo Bank and our bank in making progress. And also by leveraging our partners' or regional bank strengths, we would like to strengthen and expand and enrich solution businesses and we would like to consider new business framework. Next slide, please. By implementing the strategy that I have explained, we'd like to, in a determined manner, work on business expansion and transformation of our revenue-generating structure. By improving productivity of our partners, we would like to expand flow business customers. And at the same time, by leveraging expertise of each domain, we would like to conduct product marketing that better matches clients' needs in an effort to improve flow revenue. On the other hand, for the recurring revenue, by continuing the deep relation with customers, we would like to make a proposal on appropriate asset allocation that matches the current age, and we believe that the ratio of recurring asset will keep growing. And by -- make -- aligning ourselves with customers and to raise satisfaction of customers, this year, we introduced level fee. And level fee as of April attained net increase of JPY 100 billion, marking a smooth start. Last year, we conducted trials and conducted questionnaires among customers, and they expressed their opinion that they felt added value in the trusting relation with partners and they signed contract with us. In the medium term, coupled with discretionary investment services, we would like to grow the balance to JPY 10 trillion. Currently, the recurring revenue ratio to income is about 40%, but we would like to raise the recurring revenue ratio to 50% or so by the end of March 2025. I would like to also touch upon cost strategy. In 2019, the Retail Division set the target of reducing costs by JPY 30 billion by March 2022. But in March 2021, we, ahead of the schedule, achieved this target. So last year, we further controlled cost. Moving forward, we would like to continue with necessary investments such as digital investment, we would like to continue cost control. Also by appointing domain-based executive officers, we would like to further promote optimization of processes for each domain. And we would like to evaluate closely the necessary level of resources to be deployed as well as profitability for each domain as we conduct business. And also, while expanding recurring revenue, we, at the same time, would like to grow the recurring revenue expense coverage ratio to 70% or so from the current 50% that we can establish stable management structure. So we are pursuing the best interest and the benefit for customers, and this in and of itself can be established as a sustainable business model. And this, we believe, will help us contribute to the facilitation of the shift of funds in the market. That concludes my presentation. I'm looking forward to your questions and opinions later. Thank you very much.

Thank you, Mr. Sugiyama. Next, we will have Mr. Namura, Head of the Investment Management Division. Namura-san, please go ahead.

This is Namura, the Head of the Investment Management Division. The division was established in April last year and aims to expand the product lineup and improve our services to meet the diversifying investment needs of clients in the broadly defined asset management business. Today, I will explain our division's strategy. First is the division's strategy toward the fiscal year ending March 2025. We aim to achieve pretax income of JPY 80 billion in the fiscal year ending March 2025, mainly through growth in business revenue. And we expect a run rate similar to last year for investment gains and losses. As a KPI to achieve this target, we aim to achieve assets under management of JPY 79.1 trillion by the end of the fiscal year ending March 2025 and net inflows of JPY 2.9 trillion in the same fiscal year. In the public markets business, we will focus on expanding our Investment Trust business, domestic institutional investor business, ETF business and global strategy. In the private market business, we will pursue growth strategies through the steady implementation of disciplined investment activities, democratization of alternative products and growth of the real asset business. In the first half of my presentation, I will explain our approach to the public markets business. In public markets, we operate in 4 areas: investment trust for retail investors, Japanese institutional investors, ETFs and global businesses. As shown on the graph on the left, the AUM increased to JPY 67.9 trillion at the end of last fiscal year, and we aim to achieve JPY 79.1 trillion by the fiscal year ending March 2025. In the Investment Trust business for individuals, we will expand the business by supporting the improvement of financial literacy and focus on the defined contribution pension plan business and the business for financial institutions. In the ETF business, we will promote efforts to expand the investor base. In the global business, we aim to expand the business by utilizing UCITS, which is the common European fund passport. First, I'll talk about how we will expand the Investment Trust business by supporting the improvement of financial literacy. Nomura Asset Management offers fund wrap businesses and training programs as a package, which is suitable for asset building, to help distributors improve their consulting literacy. In order to resolve issues faced by distributors, we provide training and educational content aimed at the spread and expansion of savings-type investments, support programs based on a goal-based approach in the Fund Wrap business and support -- provide support for the practice of ESG investments. Thus, we aim to grow our Investment Trust business by contributing to the advancement of financial education for a wide range of generations. Next, we are working to expand the domestic institutional investor business and ETFs. It goes without saying that the pension funds business is an important part of institutional investor business, but we will accelerate defined contribution pension plans and the business for financial institutions with an eye for future growth. In the DC business, we will respond to the investment needs of our clients with a wide range of products in order to contribute to long-term savings-type investments. In particular, we will promote target year funds and ESG funds as products that meet the characteristics of long-term investment. We will also focus on providing solutions that address the asset management challenges faced by financial institutions. We believe there is significant room for expansion of ETFs in Japan and overseas as a tool for asset management. At Nomura Asset Management, we will work to expand the investor base of ETFs with 3 main pillars: domestic institutional investors, including financial institutions; retail investors centering on the online channel; and overseas investors. Next, let's take a look at our global strategy using UCITS. In August 2019, Nomura Asset Management and its strategic partner, American Century Investments, integrated the UCITS platform and expanded its portfolio of global and U.S. equity funds. In addition, we launched an ESG strategy that complies with Europe's sustainable finance disclosure regulations and are further expanding our product lineup to meet investor needs. As of the end of March 2022, the AUM of UCITS totaled approximately JPY 1.5 trillion. With more than 500 clients in more than 50 countries and regions, including private banks and wealth management in Europe, third-party local businesses in Latin America and Asia, we are developing strategies tailored to the local environment. We will expand our business by globally developing competitive products such as importing investment strategies launched and UCITS into Japan and providing strategies that have proven to be successful in publicly offered investment trusts in Japan through UCITS. Now in the second half of my presentation, I will introduce our private market business initiatives. In existing corporate investment areas such as buyout strategy, growth investment and mezzanine investments, we have steadily accumulated investment results. In addition, we will expand both our asset class and client base through the growth of the real asset business and democratization to expand the investor base of alternative products. In the real asset business, we aim to expand asset classes that have yet to penetrate investors such as the new real estate fund business. We are also currently considering the asset management of new real assets. In democratizing alternative products, we aim to expand the range of products that can be marketed to high-net-worth clients in Japan and the U.S. First, in the area of existing corporate investment, investment activities are making steady progress. As for buyout investments, Nomura Capital Partners, a private equity investment firm that uses its own funds, acquired shares in Renias. Meanwhile, Japan-China Capital Partners, which invests in companies seeking growth in China, has agreed to acquire shares in the Factory Japan Group. As for growth investments, Nomura SPARX Investment, which was established as a joint venture with the SPARX Group, invested in 2 space-related companies that are expected to grow based on their technological capabilities. Nomura Mezzanine Partners, a provider of mezzanine finance, has invested more than JPY 20 billion so far. The Nomura Group is leveraging its comprehensive capabilities to continuously source and invest in competitive projects from a wide network. Next, I would like to explain the business of the new private market area that combines the strengths of Nomura Group and its partners. Japan Growth Capital Investment Corporation, which is managed by Nomura SPARX Investment, received investment commitments totaling more than JPY 25 billion from institutional investors and others. In addition to the 2 companies I mentioned earlier, we recently conducted our third investment project. We will continue to contribute to the growth of private companies and provide investment opportunities to a wide range of investors through the listing on the TSE venture fund market in the future. The Japan Search Fund Platform, which was jointly launched by Nomura Research and Advisory and Japan Search Fund Accelerator, recently completed its first closing and we aim to further expand the size of this fund. At the same time, we are also hiring additional searchers, selecting SMEs for investment and implementing investments. Through a new type of buyout and business succession business, we aim to develop human resources for managers and expand our business nationwide. In addition, in the private area, we will work to provide alternative products that, in the past, only institutional investors could invest in, to a wider range of investors, including high-net-worth individuals. In the Japanese market, we began offering Blackstone U.S. Real Estate Income Fund, U.S. dollar-denominated, which is Japan's first publicly offered investment trust that invests in private U.S. REITs. We will continue to develop competitive products in the Japanese market. We also launched a new business line in the U.S. where demand for private asset investment by wealthy individuals is expected to grow. Initially, we will provide funds with exposure to a variety of private credit to high-net-worth-individual investors via RIAs. And in the future, we plan to expand into other private asset classes. In addition, the Investment Management Division aims to expand its real asset business. At the end of last week, we signed an MOU with Nomura Real Estate Holdings to set up an asset management company to run the real estate fund business. For Nomura, this is a full-scale entry into the real asset field. Nomura Group is strengthening its efforts in the private sector and will expand its real asset investment products and enhance proposals for real estate owned by corporate clients. By joining forces, the 2 groups will actively pursue synergies between finance and real estate, which will lead to greater value for our clients. The 2 companies are discussing specific business plans at the moment, and we aim to set up a company in the first half of the year. In the area of real assets, we have over 30 years of experience in leasing aircraft, which is a movable asset, through Nomura Babcock & Brown. We will capture the post-COVID recovery in global aircraft demand, leveraging long-term relationships with some of the world's leading aircraft asset management companies, our high-quality products, long-standing relationships of trust with existing clients and Nomura Securities' client base, and we will proactively provide solutions for investors. So I have explained the strategies and initiatives of the Investment Management Division. And by strengthening our business in both the public and private markets, we aim to achieve medium- to long-term growth that will satisfy our stakeholders. Thank you very much.

Good morning, everyone. My name is Steve Ashley, and I lead our Wholesale Division here at Nomura. After 2 years of virtual communication, I'm delighted to be here today in person to share our business progress and strategy. We are clearly living in extraordinary times. We experienced tumultuous market conditions following the Russian invasion of Ukraine as volatility spiked across both equity and fixed income markets. And with continued geopolitical uncertainty, I'd best characterize the market outlook as choppy seas ahead. Coupled with this, we are starting to see profound shifts in monetary policy, creating a macroeconomic environment unseen for decades. To continue the nautical theme, these are uncharted waters. At the same time, our industry is at an inflection point as the megatrends of climate transition, digitization and decentralization threaten to disrupt the old world order of traditional finance. Amidst this paradigm shift, our vision in wholesale remains consistent to deliver excellence for our clients and to drive value for our shareholders. Our strategy is designed to meet these challenges and opportunities head on: Firstly, to weather the storm by building on our core business foundations to deliver sustainable profitability across cycles; secondly, to charter course in new fast-growing markets, through bold and ambitious step change strategies, and this is the focus of my presentation today. At last year's Investor Day, I talked about the 3 fundamental principles of our Wholesale business: Stability, achieving robust high-quality earnings year in, year out; diversification, broadening our business mix and client offering; and growth, strengthening our core wholesale platform to address clients' evolving needs, particularly in new markets. Our commitment to this plan has enabled us to transform our revenue mix in wholesale, as you can see here. Historically, our performance was highly reliant on Fixed Income, traditionally, the bedrock of our franchise. Now to be clear, the importance of this business remains undiminished, and it will continue to be a core pillar of our wholesale franchise. However, we could not be over-reliant on 1 set of products particularly given the inherent volatility and resource intensity in this asset class. We therefore, invested to diversify our platform in higher-growth areas: Equities, private markets and risk-light businesses such as advisory and wealth management. Our growth rate in these areas has been impressive, between 30% to 50% over the past 5 years, while Fixed Income has remained steady at around 9%. And we expect this trend to continue with these segments representing 65% of our wholesale revenues by '24, '25. This is the basis of our sustainability story. However, long-term evolution by itself is not enough. Traditional asset classes will inevitably face headwinds as market uncertainty and economic policy bear down on client activity. Meanwhile, the size of the opportunity in new asset classes cannot be ignored. Digital assets and climate transition are estimated to represent a $25 billion combined fee pool over the next 3 to 5 years. We are therefore focused on 4 step change plans: Firstly, capturing the 2 largest mega trends, digital and sustainability. We are launching a new full suite digital asset company, which will dramatically transform our presence in the institutional crypto space. In sustainability, we will launch a suite of new offerings and deepen our client footprint. We will continue to explore options for acquisitions in digital and other core sectors in investment banking building on our success with Nomura Greentech a few years back. And finally, we are accelerating our growth plan in equities, a core pillar of our Global Markets franchise. Let me now walk you through our financial plan. Last year, our platform delivered profit of JPY 125 billion on a core basis. This is despite significantly slower markets in fixed income compared to the year before. We expect to improve on this performance further. We are very confident about the core firepower of our platform and the strong progress we have made already in each of the building blocks of our strategic plan. We are, therefore, setting our '24-'25 profit target at a range of JPY 160 billion to JPY 180 billion, which I feel is an ambitious but highly achievable goal. Turning to our KPIs. We are targeting revenue over risk-weighted assets, a key measure of asset productivity of around 6% in the medium term. Importantly, this is expressed on post Basel III finalization, reflecting our ability to deliver healthy returns on a long-term sustainable basis. We expect our cost/income ratio to be maintained at around 80%, including the full impact of our investments. Lastly, looking at fee and commission business, we already surpassed our target of $1.3 billion in '21, '22, particularly on the back of the strength of our advisory franchise. So today, we are raising our medium-term target to $1.5 billion. Underpinning this financial plan is a set of fully costed strategic initiatives, coupled with measures to strengthen our risk management framework. I will now deep dive into each of these initiatives. Let's start with fixed income or you might call the engine room of our franchise. Over more than a decade now, we built a stable platform across flowed and structured products, complemented more recently with growth in private side business. We have a market-leading global rates platform, a targeted credit franchise and a first-class securitized products business in the U.S. We also have strength in foreign exchange, particularly in our emerging markets franchise. I firmly believe this model with its proven track record can generate through-the-cycle profits. Having said that, the macroeconomic outlook has clearly changed drastically, and our clients are facing a new set of challenges. We remain confident in our ability to adapt to this evolving environment. Our macro business is well positioned to monetize elevated levels of volatility and also facilitate 2-way client flows. And we will focus on growing our structured and private side solutions businesses particularly supporting the hedging of interest rate and inflation risks. Moving to Equities in what's an intensely competitive space, we have carved out a targeted strategy centered around our strength in Japan and segments of the market where we have a differentiated edge internationally, such as U.S. equity derivatives. We have grown our cross-border flows, which have doubled over the past 5 years and now represent almost 1/4 of our client franchise. Our forward agenda is to expand our well-placed equities franchise under new global leadership. We will enhance our geographic diversification by building out in AEJ and strengthening our Japan cross-border revenues. We will also leverage our strengths in businesses such as structured notes and U.S. funds financing solutions with clients globally. Importantly, we have now integrated our execution businesses under 1 umbrella, which we call Global Execution Services. This new structure will open up significant synergies and cross-sell opportunities with our broader Equities platform. And finally, we will continue to deepen our client engagement through a globally integrated sales effort. Last year was a banner year for Nomura Investment Banking largely driven by an outperformance in advisory. I'm pleased to say we delivered on our target to achieve greater than 50% advisory revenue growth 2 years ahead of plan. Contributions from our U.S. franchise and Nomura Greentech have been pivotal with U.S. attaining record revenues this year. Building on the success, we have now embarked on a multiyear strategic step change plan. We are aiming to achieve a further 50% plus growth in advisory over the next 3 years along with upside from financing and solutions. Now it's already evident that multiple industries will be disrupted by the sustainability and digital megatrends. And we aim to be firmly at the forefront of these trends. We are investing to build scale and depth through our sustainability expertise. We have, therefore, created the Greentech Industrials & Infrastructure group to coordinate our talent across the globe. While investments are largely U.S.-focused, we are capitalizing on them globally as we promote global content and instill consistent best practices across regions. It's essential to embed a client-first content-led approach. The future is green. The future is digital. It's a powerful proposition as Nomura works with our clients across the globe. Given the success of the Nomura Greentech acquisition, we are continuing to explore options to strengthen our differentiated content, particularly in the digital space. This also includes consideration of inorganic opportunities. You have already heard from our Group CEO Okuda-san, about the rapid growth of the digital asset markets. Our own journey started back in 2018 with the creation of the wholesale digital office and the subsequent launch of our joint venture, Komainu. The new digital asset company that we are announcing today is partly the culmination of all of these efforts but it also marks a major leap forward. The company will ultimately offer a comprehensive suite of services spanning market making, investor products, a start-up incubator and venture capital. Our goal is to establish an institutional-grade platform that is purpose-built for digital assets. It will be segregated from other Nomura businesses with its own capital and resources to ensure we can accelerate time to market. But we expect close synergies with all Nomura divisions and particularly the digital company, which was launched back in March. We will further strengthen the platform with hiring of top class entrepreneurial talent with technology DNA, teaming up with specialists and support from Nomura. All this will enable the company to offer a differentiated value proposition, bridging the gap between traditional finance and crypto native capabilities. We look forward to updating you further on our progress in the coming weeks and months, including the location and name of the new company. Moving to our next priority. Our International Wealth Management business has made steady progress since we integrated it into Wholesale and brought in new leadership. We've finally broken out of the range bound AUM with $7 billion to $8 billion, ending last year at $13.5 billion. We have successfully ramped up hires and are already well ahead of our medium-term targets. And it's noteworthy that 50% of new clients were opened by our recently joined RMs. We are now catering to the wealthy beyond our core markets in Greater China, Southeast Asia and the global Indian community. And we have successfully increased client cross referrals by leveraging our One Bank proposition. We will build on the solid foundation to achieve our medium-term target of assets under management range of $28 billion to $35 billion. Our focus remains on expanding our presence in key onshore markets. And in fact, we've recently received approval to establish another coverage center in Dubai. Lastly, we will continue to broaden our product suite particularly bespoke structuring and financing capabilities. Last year, I highlighted the burgeoning opportunity in private markets. This area has become a critical part of our diversification strategy. We have positioned ourselves as a market-leading franchise in a number of our private markets businesses. We are ranked #3 in RMBS new issue and top 10 in project financing in Americas. And in Japan private markets, we have executed a number of real estate-backed securitized token offerings and digital bonds. We enjoyed solid revenue growth of more than 20% last year, which is well ahead in our journey to achieve 40% plus growth by '24, '25. And we have a number of priorities to achieve our future ambition as long as supportive market conditions continue. We will expand in areas of strength such as U.S. mortgage structured lending, real estate finance businesses and U.S. funds financing solutions. We aim significantly increased contribution from new and high-growth areas to 40% in the medium term. We have a long-standing relationships with investor clients in Japan and AEJ, and we will distribute self-originated assets to increase our overall participation in these countries. And finally, we will pursue cross-divisional opportunities such as providing asset-backed loans to International Wealth Management clients, as well as further facilitating fundraising for private companies by liaising with Nomura SPARX. Turning to sustainable finance. Last year, we formalized our vision with a clear target of $125 billion in cumulative financing by March 2026. I'm pleased to say that we are so far on track and have made excellent progress this year. We've been recognized for 2 years in a row as a leader in sustainable financing and were notably ranked in the top 4% financials in the latest S&P ratings. We have no intention to rest on our laurels and have 3 key priorities to drive our agenda forwards: Firstly, we have established a new global Greentech Industrials & Infrastructure Group. The group will combine the Nomura Greentech's deep experience in sustainable technology and infrastructure with Nomura's existing expertise and global client relationships. It will comprise around 150 bankers across 10 sectors focused on monetizing opportunities in sustainable, advisory and financing, a formidable team. Next, we aim to grow our financing and primary activity, particularly our fast-growing Infrastructure & Power Finance business. And lastly, we will develop new product offerings focused on ESG especially financing solutions for green and social investments. Growth requires investment, and we have a fully costed plan to deliver on our strategic plans while also achieving our medium-term cost income ratio target. Over the next 3 years, we will increase investments in areas linked to revenue growth, including new hires in high-growth areas. We expect costs to rise about 3% per annum with revenue targeted up 5%. Our investment in growth will account for more than 50% of our overall spend. We will also see some growth in variable costs to support our revenue expansion and drive operating model efficiencies. And lastly, but very importantly, we will invest to strengthen our frontline risk management framework. On that topic, much has changed in the year. We've made huge efforts to strengthen and reinforce our frontline risk management. To be clear, risk management remains the top priority for me and my management team. We have taken decisive measures to align business strategy with risk appetite, enhance connectivity and improve accountability within the firm. We developed a globally integrated risk and control function to strengthen our first line of defense with new senior leadership. This function oversees both financial and nonfinancial risks. We have standardized our risk framework and reviewed key processes to ensure timely review and escalation of risks. And lastly, we have strengthened our risk culture. I have personally outlined the key nonnegotiables for all our Wholesale employees. And we have provided training to install ownership and encourage staff to proactively spot and flag major risks. To reiterate, a strong and healthy risk culture is our #1 priority and will be integral to our success in Wholesale. So finally, I would like to leave you with 2 key messages. Firstly, our core platform remains robust and well balanced. Our business mix is more stable and more diversified. And we are well positioned to achieve or exceed our KPIs. Secondly, we have an ambitious but achievable growth plan into 2025. Our investments of the past few years are already paying dividends, and we will continue to build in our target areas such as advisory, wealth, digital and private markets. We remain committed to our social goals and are placing the sustainable finance agenda firmly at the center of our strategy. With that, I would like to thank you for your time and attention today.

[Interpreted] The first question is from Mr. Watanabe of Daiwa Securities. Mr. Watanabe, please go ahead.

[Interpreted] This is Watanabe from Daiwa. I have 2 questions. First question is about retail business. Page 3 of the material regarding the recurring revenue. So your outlook is that recurring asset is going to be -- going to increase by about JPY 6 trillion. And recurring revenue apparently is going to grow by about 600 -- JPY 60 billion. So regarding the profitability of recurring asset, if we should we consider this generating 1% fee rate? As for also the level fee, the profitability on asset, is it -- if the customer's rate is 1% or above based upon the high frequency in transaction. And some customers' fee may be below that based upon low frequency. But as you conduct a level fee-based structure, which side are you placing more focus? The second question is Page 21 of the overall material regarding capital policy. 11% target, how are you positioning it? So 11% -- so capital efficiency and financial health. So is it something you would like to accomplish as soon as possible? Or is it the minimum standard, which you would like to ensure to achieve? So on what kind of time line -- so 3% capital surplus, is it going to be utilized on what time line?

[Interpreted] Regarding the first question. Thank you very much. First question will be addressed by Mr. Sugiyama, the second question by Mr. Kitamura, CFO.

[Interpreted] This is Sugiyama speaking. Thank you very much for your question, Mr. Watanabe. Regarding your first question on, I guess, it's about the basis or the breakdown of the recurring revenue. But the breakdown of the recurring asset has been revised somewhat. So the basis on the recurring asset, there are various numbers. So the total number comes to the revenue -- recurring revenue, which we showed. Regarding the level fee. Last year, we conducted a test in a trial. But in April this year, we've introduced it in a full scale. So at this point, we still cannot clearly speak about what kind of revenue we can generate. But when the time comes for us to be able to speak more clearly, I would like to do so. Thank you.

[Interpreted] My question -- regarding the second question, for highly -- high-frequency customers. If you do promotion, then that's going to be conducive. But if you -- but -- and also it could be conducive if you focus on the low frequency transaction customers as your strategy, which is your focus?

[Interpreted] Thank you. In order to improve the satisfaction of customers, we have arranged those options. So it is not either 1 or 2. It is up to customers to choose. So that's the stance of our sales partners as they interact with customers.

[Interpreted] I have another question. So the sales staff on the ground of business. Would they -- are they resisting saying that they don't want to introduce the level fee for low-frequency transaction customers?

[Interpreted] In order to improve satisfaction level of customers, our sales partners are quite proactive. So we are not hearing our voices of resistance.

[Interpreted] Regarding the second question, I'd like to answer. So Basel III finalization impact has been disclosed. So for March 2024, in Japan, the Basel III will be fully introduced. So when applying that to our balance sheet, then 14% is the ratio we will end up with for 11% is our CET1 ratio. So that's our risk appetite. So the minimum regulatory level plus certain buffer is that number, our risk appetite. So as Mr. Watanabe asked, the 3% is the buffer. So at this Investor Day, as some of us said, for growth, we are pursuing inorganic opportunities. So naturally, the validity of pricing and other factors have to be examined closely before going ahead. But if we do not have any such inorganic deal and if we do not have growth opportunities identified, then as one of the important options, we will consider the shareholder return, which we believe is important choice for us. The 11%, this is medium to long-term target for us. So by when do we have to achieve that? We do not have the clear time schedule. It's the long-term level that we are looking at.

[Interpreted] The next question is from BofA Securities, Mr. Sasaki.

[Interpreted] This is Sasaki from Bank of America. Three questions, please. First is regarding the overall management KPIs and KGIs. You have not changed your metrics since the past. But on the other hand, the market outlook is becoming quite unclear. And do you plan to achieve these targets regardless of the market environment? Is that the message you're sending out? Or have you set certain assumptions in coming up with these KPIs and KGIs? That's my first point. Second, regarding the retail business in Japan, you are going to increase the recurring assets and -- which I understand and the recurring revenue assets. But what will be the driver in growing recurring revenue assets for Nomura? Is it going to be service, pricing, content? In meeting these targets, what will be Nomura's edge in growing the recurring revenue assets? Where do you see your strengths in doing this? That's my second point. Thirdly, about the global initiatives and digital and you are going to set up a separate digital entity this time. Are you going to approach global institutional investors or domestic institutional investors? Or is this entity -- is it going to be put in the U.S.? So some questions about the new digital entity, please?

[Interpreted] Okay. This is Okuda. Let me address your first question. Second question by Sugiyama-san. And the third question by Steve, please. Okay. So regarding the first question about KPI and KGI. We have built up the discussions from bottom up and based on market conditions. And we have -- we use ROE as the key metric in communicating with the market from 8% to 10%. And by 2025 that's -- and we want to achieve a midterm stable level of ROE. And that is close to our commitment regardless of the market environment. The second question, Sugiyama-san. Please go ahead.

[Interpreted] This is Sasaki. Just a follow-up question. ROE, you say ROE is the key metric. Right now, you are PER between 1x to 2x. And so the capital cost seems a bit high at the moment based on the share price. And this 8% to 10%, do you think this is reasonable even at the moment? And why do you think this is reasonable?

[Interpreted] Well, this is Okuda. We want to achieve earnings that are higher than the cost of capital. And we have done a peer analysis, and we still believe that this range is appropriate.

[Interpreted] And just a follow-up, from Kitamura. Yes, at the moment, our share price is compared to the share price, the cost of capital is a bit high. And the reason for that is the one-off incidents and items that we had last year, and that is raising the capital -- the cost of capital. And as Okuda-san said, we wanted to stabilize our revenues. That is one of the key priorities. And as a result, our cost of capital should decline from the market's perspective. And as a result, if it's between 8% to 10%, then the ROE will be higher than the cost of capital is the way we think about this.

[Interpreted] This is Sasaki. The second question, please?

[Interpreted] Yes. This is Sugiyama from retail. Thank you very much for your question. Your question was about how we plan to grow the recurring revenue assets going forward. And what the edge is, what Nomura's strength is. Well, I think there are 2 things. First is the content product service, which is very strong compared to our peers. And we talked about the SMA and the level fees. And I think that's a very good example. But in April, we are starting to provide the private REIT products of the U.S., which is something, which Japanese investors had not put into their portfolios, and we have been able to start selling those products. So product and service also are areas where we have strong -- a big strength. And the other thing is, as I explained in the strategy part, is the segment-based approach. And the objective is to get to know the customers deeper and also engage in very deep discussions with them. I think that's the key strength of Nomura. And in terms of depth with clients, we are very confident that we have an edge, and we will also use digital technologies going forward to expand and also extend the relationships with clients.

In response to your third question, the company will be launched by the end of the year. The location, as I mentioned in my speech of the [ OpCo holdco ] will be announced in the next few weeks. Essentially, the centralized finance is borderless, and we visited a global workforce servicing global institutions. Although I must say that probably EMEA and U.S. investors have expressed most interest to date. Also, it will take, I would imagine, 9 to 12 months from the launch of the company to build the product systems and processes to service institutional investors in this asset class.