Speaker 0:
Hello. Welcome to this investment trust Edge on Asset TV. I'm your host, Rory Palmer. Today we're going to be looking at the impact of a I on the closed ended space, and we're going to look at the opportunities in infrastructure, but kicking us off, we're going to have a closer look at home reach. But joining me here in the studio to discuss that we have Emma Bird, head of investment trust research at Winter Flood and, of course, James Car, head of investment companies. Research at data

Speaker 0:
Emma, welcome to you. Home Read.

Speaker 0:
Homelessness is a huge issue. It's a huge problem, and investment trust set up to tackle. That is surely a great idea. Yes, it definitely did seem like a great premise when it was launched, um, back in 2020. And that, as you said, it has a great EG angle helping to alleviate homelessness. Plus, um, it was aiming to deliver government backed, uh, long term inflation linked income. And so it did seem like a great premise. Um,

Speaker 0:
that back in November last year, it was subject to a short seller attack. And many allegations have come out since then. I mean, James will get into the the nuts and bolts of it. But where did it go wrong? I mean, there's a few reasons, but in your view, where did it go wrong?

Speaker 1:
Well, that we don't really know exactly where it's gone wrong yet. I think because of all these investigations that have gone on, we know some of the results of these, but we don't know all of them yet. It does look as though there's been lots of failings at the board level at the manager level.

Speaker 1:
Um, it feels as though the people that they bought the properties from some of them were maybe not completely truthful, because sometimes their manager didn't provide true information to, um, the board and to, uh, external advisors. So it's very hard to know exactly what the root cause is, but it just feels like there's been a lot of failings.

Speaker 0:
So a lack of due diligence and from their side do you think

Speaker 0:
it It seems to be, um, a lack of due diligence on behalf of the investment advisor, potentially their due diligence on the underlying tenants, so their charities or housing associations that their properties are leased to um, as well as on on behalf of the board and their due diligence oversight of the investment advisor and Jones having government backed, um, to to provide that you having government backed? Do you think private capital and social housing is a tough mix? Do you think it can ever work? Is it a tough marriage, though?

Speaker 1:
It ought to work. I mean, I, I personally, I don't think it should be necessary. I should be this. This should be the sort of thing that's funded off the government balance sheet. But we've long had this obsession of trying to hide the fact that we were You know, we had all these obligations by putting them onto private capital, and it works out slightly more expensive. Probably. Um,

Speaker 1:
I think that the structure in itself does work. It does work for things like the, uh, special supporting housing sector. I think that I know they've they've set a trading discounts, too, but I think I think the structure does work and the theory should have worked here, but, uh, the practise, it hasn't, you know,

Speaker 0:
and I, I think I read it was that investment Week article that housing benefit and where a lot of this does come from. It's quite a stringent process, the housing benefit idea, and so pinning a lot of your hopes on this working out was always quite a tough one to sell.

Speaker 0:
So at the outset, um, when the home route was launched, they kind of explained the the structure of the leases and their their revenue sources. So Home re bought properties, leased them to charities and housing associations who would then pay rent to home rote and reclaim that, um, plus extra to cover,

Speaker 0:
um, other fees, um, from the local authority. So ultimately, government backed, I think some of the issues that have arisen are the delay in the time it takes to reclaim that housing benefit. Um, so they're kind of causing cash flow issues between when they had to pay the rent and re reclaim the housing benefit. Um,

Speaker 0:
but the idea was that the housing benefit, um, for these properties should have been and what's known as exempt, so it shouldn't have been subject to to any limits. Um, but clearly, there have been some failings in that. Jones, do you think with all this in mind do you think there's a case that it's done a bit of reputational damage to the industry

Speaker 0:
with what's happened here?

Speaker 1:
I really fear that might be true. Uh, there'll be a lot of investors that came into this fund because of the ESG angle because they thought they were going to do something useful while earning a sort of decent income at the same time. But nevertheless, I, I do worry that some of those are gonna be put off now and they just is that the failure of trust is one of the hardest things I think as an investor is that you have to take a lot of stuff on faith, and the beauty of the investment trust structure is you've got a board out there who's looking after your interests,

Speaker 1:
and you have to trust that they are doing their job and kicking the tyres and making sure that everything's OK and the fact that this doesn't seem to have happened here. I think that would have under my confidence, definitely, and

Speaker 0:
governance is obviously a huge part of ESG and that they let the investors down here on the government side.

Speaker 0:
Um, as we mentioned earlier. There are a lot more details still to come out from, um, the enhanced order, other investigations. But from what we've heard so far, um, it does seem that there was potentially a lack of, um, oversight or or stringent, Um, due diligence. Um,

Speaker 0:
it it the investigations have alleged that the investment advisors and were doing things, um, kind of creative accounting and think allegations like that, um, a lot of it without the board's knowledge. Um, so obviously, the board was relying on the investment advisor to to tell them everything, but not, I guess, maybe following up as as much as they could have.

Speaker 0:
And James, what about some of its peers? What about what's happening in that trust at the

Speaker 1:
moment? Well, that one has just been taken over. So, um, that's the end of that story. But, uh,

Speaker 1:
the both of those funds the the and the Triple Point social housing fund that provide accommodation for, uh, specialist supported housing. So, uh, people with special needs, uh, where they have to adapt the properties for those things. And therefore, you know, there's an angle there that doesn't exist there with home.

Speaker 1:
I think those funds are working really there again. There's a problem that in terms of the immediate tenant, is a housing association normally, um, and they're quite thinly capitalised, so they haven't got an awful lot of money to back up, um, paying the rents if they don't receive the income from the government that they they need to pay the rents with. So if there's, uh, problems with too much, uh, they can see within the portfolio, and they they haven't got any rents to claim. There's a There's an issue there, but for the most part, these are very sensible structures.

Speaker 1:
Um, and they don't really deserve to train the distances that they did do. The bidder, in case took advantage of the fact that people don't either don't understand it or just for every reason, to took a turn to it. Um, and they came in. They they took it over at a almost 30% discount to asset value. Um, the triple 0.1 is still trading on a 60% discount, so it sounds like that's such a complete bargain to me. Um,

Speaker 0:
so So the investors of didn't get a good deal?

Speaker 1:
I don't think so. No.

Speaker 0:
And Emma, What of your research has shown when you've looked at Triple point, What do you think of that trust?

Speaker 0:
Um, yes. Um, as James mentioned, I think that the structure should work. Clearly. There are some, um, issues or concerns at the underlying tenant level. Um, in terms of the financial, um, viability. There's been a lot of, um, regulatory notices from the

Speaker 0:
regulator of social housing raising concerns about some of the tenants. Um, but there does seem to be a real drive to improve and kind of work with triple point and previously working with the tenants to help to help improve their governance and financial viability. So, um, potentially over the long term, if these tenants can, uh, grow and professionalise and investors can can regain confidence, then yes, the current discount does appear too wide.

Speaker 0:
And we talked about reputational damage to the industry earlier. Where do you see this? And without having a crystal ball, where do you see this kind of investment space going

Speaker 0:
in terms of the social housing? And I think yes, in terms of reputational damage, it could cause some issues in in the near term where property in general is obviously having a tough time in the high interest rate environment. So I don't expect to see any new investment trust launches in the property space

Speaker 0:
general, let alone social housing. Um, but over the long term, if, uh, triple point or any others can prove that this private capital funding of social housing can provide a social good and an investment return, and then I think it could There could be options for for more launches there, James. Social good and investment returns. Good premise.

Speaker 0:
Do you think it has the legs? Do you think it can sustain?

Speaker 1:
It? Should do. It Should do. I mean, this is the point. This is why I was so upset with service has taken up the price it did do. I mean, the the income, uh, is backed by government ultimately, and it's inflation linked, which is exactly the sort of thing you you you should be crying out for, um and and so therefore, you You'd think it makes logical sense for these sorts of ones to to thrive. Really?

Speaker 0:
So next up a topic that you probably can't get away from generative A I and the impact on the industry. So we're gonna look at some of the trust that are exposed to some of these companies. Uh, and we're gonna kick it off Emma with what are some of the trust that you've seen with some of the biggest underlying exposure to artificial intelligence?

Speaker 0:
Um, yeah, it's a good question. Um, possibly not as easy to answer as you might think, because there's lots of different ways that, um, investment trusts can get exposure to a I, um whether that's through companies like NVIDIA. Um, which kind of have the picks and troubles of a I or companies like Microsoft and benefiting from from this A. I,

Speaker 0:
and in other ways. So we estimate, um, think there's nine investment trusts that currently have NVIDIA in their top 10 holdings, Um, and 13 that have Microsoft. So there are a wide variety and clearly, uh, funds specifically focused on the technology, uh, sector are significantly exposed. So um, funds, like all technology

Speaker 0:
trust or capital technology trust has significant exposure, but also some other kind of global equity trust like Scottish mortgage investment trust has, um, quite a decent exposure and and perhaps less well known and Manchester and London Investment Trust and has quite high exposure. And their fund manager, uh, Mark Shepherd, is actually currently studying for a master's in artificial intelligence. Um,

Speaker 0:
picks and shovels, James. I think that's important at this point to distinguish between the companies that are enabling and adopting this kind of technology.

Speaker 1:
Yeah, I think this goes back all the way to the tech bubble years ago, uh, when we were getting excited about the internet, Um, and it basically came down to the the people who had probably really made the money with the people that were, um, putting the fibre in the ground and laying the foundations, if you like, for that to happen. And here we're talking about the companies that are providing their chips and things that, um, go into,

Speaker 1:
um, the data servers and things that are then used by this A. I technology. And NVIDIA happens to have the chips that are favourite at the moment for for doing this

Speaker 0:
and then So I mean, you mentioned as well that mainly it's in the tech sector. But as more companies adopt and kind of use this technology, we're going to see across all the sectors. Huge swath of investment companies having exposure to a I, um yes, I think so. I think, uh, this trend is at a relatively early stage. I think, Um, if some of the predictions are correct, it will sweep across different sectors and pretty much all aspects of our lives. If, um, some people's predictions are correct. So

Speaker 0:
yes, definitely expect to see more more underlying companies, considering a I either in terms of how they can benefit from it or how they can avoid being completely disrupted by it. So an investment trust level. Yes, I'd imagine more farm managers can increasingly focus on this when they're analysing, uh, companies and whether they want to invest in them or not. And for the viewers watching this, the close ended structure, Is it well suited to to play this theme to play this technology?

Speaker 0:
Um, yes, I think so. I think the fact, um, as I mentioned it's still at a very early stage means that it is necessarily quite a quite a long run theme. Um, and this long term outlook is ideally suited to the closed end, uh, nature of investment trust and their permanent capital. structure and also accessing it via a kind of a collector's vehicle in general with a specialist fund manager and should enable you to get the get the best return. So the fund manager can,

Speaker 0:
uh, rotate the portfolio based on developing technologies or changing valuations and things like that. James, same question to you. Closing structure. Is it well suited for this? The

Speaker 1:
Yeah, I think so. Um, some of the more interesting applications that we're seeing, actually, uh, in funds that are holding on quoting companies. So, uh, there are some growth capital companies that are deeply out of favour at the moment as well. But, um, things like Chris and the capital global innovation.

Speaker 1:
Um,

Speaker 1:
they hold some interesting investments which are unquoted and unquoted companies sit best in closed in structures. Um, because you don't have to worry about turning into cash in a hurry. Um, within Chris, this portfolio there's things like deep instinct, which is, um, cybersecurity company, which is trying to use a I to predict threats before they actually happen. And they they they actually reckon they have pretty good success rate of doing this. Um, and potentially, that could be an enormous company.

Speaker 1:
Um, they also got another one called feature space, which is, uh, doing something similar with, um, bank fraud. Um, then there are all sorts of other applications where you do sort of trying to use a I to, um, develop drugs, for example. So benevolent A I is It is a long standing holding and and a whole bunch of funds, including the sort of some of the baby gift ones and the shoulder one. So, um, yeah, there's also of interesting stuff there. Um,

Speaker 0:
but with all this interesting stuff happening, is there a danger of paying that a I premium? How can investors get around that?

Speaker 1:
Oh, well, obviously those couple of ones, you're definitely not doing that. They are deeply unloved at the moment and trading on big discounts. Um, I think there's more of a question around valuations of things like in video and stuff. Um, which, uh,

Speaker 1:
I don't think there's a double whammy of of high valuations on the company and and a high premium on the person company. Uh, we haven't got to that sort of level of mania. OK,

Speaker 0:
ok, so nowhere near the dot com. We're not looking at another one of those? No. But then the market could get ahead of itself, Perhaps in companies that are the invidious of today, similar to the dot com stocks might not be around in in five years because we'd be looking at companies now that are very small. But then might be the players moving forward.

Speaker 0:
Um, yes, that that obviously could be the case. Um, as I noted before hope the hope is that the investment managers can try to predict that the best companies and also adjust based on valuation. So if they think that the valuations of Nia or or Microsoft are getting overextended, they should be able to to trim these positions and potentially, yeah, recycle that capital in into a smaller startup businesses.

Speaker 0:
Um, but with all this in mind and we touched on ESG here before, there's a real ESG angle, right? A. I because the amount of processing that's needed for all this technology is huge, and from a green angle, it it doesn't look so good.

Speaker 1:
No, exactly, because the the the amount of energy that's been doing processing all of this data is is vast.

Speaker 1:
And unless that energy is coming from renewables, then that treaty. Clearly not a good a good thing for the planet.

Speaker 0:
Judge. What? We've heard a lot about NVIDIA, but when we spoke before you mentioned a company called Graph Core. What are they doing? What's the company all about?

Speaker 1:
Well, NVIDIA is thought to be the sort of the best A. I chip out there at the moment. Um, but they're really based on gaming chips. So they they've designed for to rendering sort of mobile video graphics. Um, and there's a British company called Graft Cop, which is another kind of unquoted company that's held within some of these investment companies, like, uh, World Wide and Chris and maybe a couple of others.

Speaker 1:
Um, that set out to design chips specifically for a I. So, um, it thinks that its chips are more efficient, um,

Speaker 1:
more powerful, Uh, and probably cheaper than the NVIDIA ones. You'd think that having said that, they would be racing away, and, you know, um, and raking in orders. It doesn't seem to be happening.

Speaker 1:
Um, the one of the theories is that the NVIDIA, actually the software that runs on the chips is acts as a sort of barrier to entry, if you like, because it doesn't apply to the graphical ones. Um, so they're trying to find ways around that. It's one of these businesses that could be huge. And, um, if so, it would make a massive difference to the any of these of these companies. Or it could just go bust. We just can't tell. It's one of the Yeah, it's a It's a big unknown, but it's high option value that I think isn't really reflected in, um,

Speaker 1:
some of the discounts on these funds.

Speaker 0:
So next up infrastructure. It's a big area. But where are the opportunities lying? Um, and what can governments do, really to help push along a lot of these big projects? Emma. What do you think it's? It's a huge opportunity in infrastructure. I think we're looking over the next 20 years. The amount of investments that is going to be needed is gonna be huge.

Speaker 0:
Um, yes, I. I think that's that's definitely fair, Particularly in the West. Uh, infrastructure is often kind of described as crumbling, uh, compared to China and some other Asian countries, So there is a real awareness that, um, governments need to invest a lot more in infrastructure and partially, um, has been a result, or or partly by a fiscal stimulus and

Speaker 0:
in the past. So I think there are some yes and lots of key drivers either to maintain or mo modernise the current infrastructure as well as to develop uh, green infrastructure and decarbonisation. Yeah, but I'll come back to the the green Infrastructure. But James, why do you think there has been so much under investments by big governments and OECD governments? Why, why has that been?

Speaker 1:
It's a very good question and very, very political and that we shouldn't get too deep into.

Speaker 1:
But there is. There has been a sort of fading. I think we've seen that we've written up quite recently because we obviously, as interest rates are recognising now, the governments have kind of missed their opportunity to do this on the cheap. They could have been issuing a very long term debt or very low interest rates and using that money to to fund infrastructure investments, and they haven't gotten around to doing it. Um, and I, I think that's a shame, really. But that because of this under investments, we we know that again. The stories in the press currently about schools with Roces falling down and that sort of stuff,

Speaker 1:
the building schools for the future programme. That was one of the things that, uh, the infrastructure funds got into quite early on when they were when they were starting.

Speaker 1:
And there's there's scope for another one of those, um, but But it's not just schools and hospitals, and you know, there's there's a lot to do, uh, roads to I mean, but the renewable stuff is probably with the the biggest thing that that needs the money spent and

Speaker 0:
this green infrastructure. So we're looking at homes. We're looking at offices as well. What's going to happen to a lot of the buildings that perhaps don't meet? Standards don't meet regulations?

Speaker 0:
Uh, yes. So on the property side, Um, as a landlord, there aren't, uh, regulations coming in that you need to meet certain E PC ratings in in order to let the properties. So, um, I mean, this is, um a way I guess that the private capital can help to

Speaker 0:
improve these environmental standards. We're seeing it a lot in the property investment trusts and the farm managers really focusing on improving environmental standards both to meet um, regulatory requirements, but also they're seeing the demand from tenants there.

Speaker 0:
We've seen, I guess, in the UK and Europe, we see a lot of people come back to offices, But in the US, not so much. Do you think we could be looking at a case in the US in particular where there's a lot of stranded assets, a lot of, uh, unoccupied buildings that they almost know what to do with?

Speaker 1:
I think it's definitely possible. Yeah, um, but these people come in, they some of them can be repurposed. Um, and I think that's gonna happen.

Speaker 1:
Um, it's it's interesting, I think what I was saying that that, um, tenants, I think are gonna be the drivers of whether what happens to this Now, um, for some extent, I think, um, some office tenants are going to say, Well,

Speaker 1:
we might as well just have a bit more space in the office. We can have room for, um, sort of leisure type rooms and things, or organisation rooms that more meeting space that we than we had before. More space per per person so just spread people over a wider area. Um, I definitely I mean, we're a good example. I think we we've got an office that would probably comfortably fit about 15 people. But I think we've got 16 or 17 people on the books. And so people are adapting to to how they use the space. Um and, um

Speaker 1:
I. I don't think the office is dead by any stretch of imagination. It's interesting, actually. I come back to the UK again, but, um, regional rates are a good company, and it's an interesting example. They they reckon that their tenants have come back to the office already that they they they are in the office roughly sort of four days a week

Speaker 1:
on average. Um, and as long as you need it one day a week, you need the whole building. So it's it's not, you know,

Speaker 1:
the demand is still there. Whether you you lose the drive for rent uplifts. Maybe that's a different problem. Sure,

Speaker 0:
And staying with the green angle. How important is the the US Inflation Reduction Act in the EU um, bill as well? Because I think. But also on the flip side of that, is there a danger of of chasing subsidies when it comes to investing here,

Speaker 1:
Um, the the amount of subsidy available is is enormous now, especially with the inflation reduction in the US. Um, the interesting thing about the sector is, uh, we've got, um, a couple of funds that are directly invested in that So US solar and the Evi renewables. Um, and they're not particularly loved by investors, despite the enormous amount of, um, opportunity available to them and the big upfront tax credits they get for putting new, um, assets into the ground. So, you know, you build a

Speaker 1:
a solar farm in the right state with the right materials, you can get sort of 50% right off of your your tax bill upfront.

Speaker 1:
Um,

Speaker 1:
and the EU policies are are sort of similar. You know,

Speaker 1:
whether we need to do something here in the UK to stimulate more renewable investment. I is a debate. I think one of the things we probably need to do is sort out the planning. That's that's a a big thing. Yeah.

Speaker 0:
Do you think we need something similar here in the UK to the E US and the Inflation reduction Act?

Speaker 0:
Um I. I think it it would definitely help. Um, we obviously do have subsidies in the UK, but, um, kind of a much bigger, longer term drive, uh, to build, um, new renewable energy infrastructure, and I think, definitely could be a good thing. And, um, if investment trusts can can help with that and and benefit from that, then, um, that should be a kind of strong tailwind.

Speaker 0:
Uh, James, I'll come back to you. And and so, policy and regulation Do you think it's holding up a lot of these policies? Is it is it supportive or is it getting in the way At the moment,

Speaker 1:
I think here in the UK, there is probably a bit too much uncertainty about, um, things like the planning issues. Um,

Speaker 1:
uh, So there was a debate about whether you could use agricultural land to put solar farms on, for example, or, um, whether you can permit new wind onshore wind farm developments that all of that stuff needs to be sorted out. And it hasn't been the biggest problem that we've got, though, and I think this is not just a UK problem. It's a wider issue. Is the grid connections.

Speaker 1:
So, uh, the the grid just isn't up to scratch in terms of, um, adapting to the the new environment of renewables, where the the energy isn't generated constantly. Like it was in the old days with coal generation or nuclear. So, um, they that an awful lot of money needs to be invested in here and that delay in doing that is holding up the connections for the the new renewable stuff that needs to be done.

Speaker 1:
Uh, energy storage, too. I mean, if you got new new, uh, battery projects that cannot get connected to the grid until the back end of the 20 thirties, and that's clearly daft.

Speaker 0:
Do you think and and ever bring you in what we talked about before with a I Do you think A I has a role to play in infrastructure. Do you think it could play a role moving forward?

Speaker 0:
Um, yes, I, I think. Definitely. I think, uh, a I could potentially affect all areas of our life and not not least infrastructure. And obviously, uh, you can't really tell in what ways that would be yet, but kind of potential examples.

Speaker 0:
It could be a I deciding that the best place to to build a wind farm or how to improve the efficiency of a solar solar panel, for example, and just going back to just the trust in particular, what's discounts looking like across the space,

Speaker 1:
they've all widened out. So almost everything in the renewable sector now is on a double digit discount. Uh, in the infrastructure sector, too, they're they're all much, much cheaper. I suppose there's a question mark the investors are putting on whether those asset values are are real or not. This is the same thing. We've had the debate about the private equity sector, too, and,

Speaker 1:
um, it comes down to whether the higher interest rates costs have been reflected into the NAV S or not. Um, and

Speaker 1:
there are two sides to the argument and the the industry say, Well, you know, I've got a solar farm and I I can sell it for what I'm at. So therefore, the values right? Um, it's hard to argue with that

Speaker 0:
Good, good buying opportunity. Some of these trusts

Speaker 1:
well, the yields available now are no credible. So some of them, you know, sort of 8 9% yields. Um, and These aren't static things. They're not like bond yields. These are dividends that are growing. So, uh, one of the funds that we look at, for example, is next energy solar?

Speaker 1:
Uh, that's on a sort of 8% yield, but it just grew its dividend by 11% matching inflation. And it still thinks that that's going to be very well covered by earnings and cash flow, and it can still grow that dividend for years to come. So it seems like a no brainer to me, but,

Speaker 0:
uh, and we've covered a few areas there. But what are the other big tailwinds driving the infrastructure space?

Speaker 0:
Yeah. So, other than decarbonisation theme, I think another key area is, uh, de globalisation. Um, so, uh, countries looking to to reassure, um, protect infrastructure in the event of a a global crisis such as the pandemic, Um, as well as trying to protect key industries like semiconductors, um, within their own sphere of geopolitical influence.

Speaker 0:
So, you know, that could have be a real driver for infrastructure spending in terms of, um, kind of roads and bridges, as well as, um, more, uh, industry specific in infrastructure. So we look at on shoring and protecting their own supply chains. What does that look like, James? When across the trust base. How do you think that will affect, uh, some of these big name

Speaker 1:
were the probably the big beneficiary to that. Probably the logistics companies.

Speaker 1:
Uh, so things like trita uh, big box trita euro box. Um, you know, there's a whole raft of these things, and the more industrial space that's needed, um, the the more they're gonna have to build there, there's a lack of land to do that in some places. And so that's driving up yields. Uh, the vacancy rates are very low already. Um, so the the pressures are all in the right direction for them. The the problem is that the valuation yields.

Speaker 1:
I obviously moved upwards, too, which has put pressure downwards on the values. Um, and so we just there's a balancing act to play there, but rental growth does help support some of those valuations down. Yeah,

Speaker 0:
Emma again ask you if you're a crystal ball, but do you have a bit of an outlook on what the space is going to do for the rest of this year and perhaps the year after that,

Speaker 0:
Um, the infrastructure space. So,

Speaker 0:
um, I think a lot of it will depend on the path of interest rates. Um, as James mentioned, the sector is trading on a significant discount at the moment, particularly relative to where it has traded in the past. Um, it I think it Yeah, it depends on the path of interest rates. If we get some more certainty about when we might reach peak rates or even, um, uh, rates reducing, we could see, um, a real investor pick up and,

Speaker 0:
um, some some re rating of that sector. Um, but equally if there's there's more uncertainty or bigger than expected rate hikes, then the discounts could widen out further.

Speaker 0:
James, do you agree?

Speaker 1:
Yes,

Speaker 1:
but it's simply yes, I think so. Um, it's it's hard to say. Um, at one time, I was convinced that that the minute the US started to, um

Speaker 1:
cut rates, that there'd be this enormous shift in sentiment. And it would, um, kickstart, you know, re rekindle interest in, um, all sorts of sectors. You know, not not just infrastructure, renewables, but growth companies and stuff. To

Speaker 1:
I think there's more of a feeling now that inflation is probably stickier than people wanted it to be. Um And so therefore, we higher rates are already with us for longer. It won't be quite a sort of sharp, um, cuts the way that we maybe we hope for, but, um, nevertheless, uh, it should be good news when this when this starts to happen, the

Speaker 0:
last point I'll just finish with. Do you think the 2% target is is over? Do you think we're going to be looking at a 3 4% target over the next few

Speaker 1:
for inflation? I

Speaker 1:
I don't think the target is going away. I think the ability to achieve it is Yeah, it is much more questionable.

Speaker 0:
Well, excellent. Look, I think that's a a great place to leave it. Thank you very much. Both.

Speaker 0:
Uh, yeah. Thank you. To my guest. Thank you. To Emma. Thank you to James. Thank you for watching. And we'll see you here on asset TV next time.