Hello, and welcome to today's episode of The Money Puzzle. I'm your host James Gerard, standing in for James Kirby this week as he enjoys a well deserved break. Today we've got a special episode plan which is all about private equity investments and venture capital investments. It may sound very mysterious, at the end of the day, private equity is just basically investing in a company that's not listed on the share market. So imagine investing in your local bakery.
That could be considered private equity. And for those who have watched the TV show Billions, if you don't have billions of dollars like Bobby Axelrod does to invest there are still some pathways for the everyday mum and dad
investor to invest into private equity. But this particular asset class, it requires a lot of research into it because it's a big case of buyer, where with private equity there's a lot less information there, there's a lot more risks, so it's generally a lot more less transparent than the share on the share market. So investors need to be a lot more careful before they invest into private equity.
So today we'll break down the basics, we'll share some tips and tricks, we'll discuss the ins and outs of private equity. And to help us do this, we've got a very special guest. Rudy Engelbreck is a close friend of mine and also a private investor, and he's kindly agreed to open the books and share his experience on private equity investing in Australia. Have he migrated from South Africa around ten years ago. But to be very clear, Rudy's not providing advice. All his views are his own
personal views. He's not acting in any other capacity. So always, as is the case on the Money Puzzle, everything we discuss is general advice. It's not personal advice, and you should seek your own advice from a professional before making any decisions. So, without any further ado, Rudy, welcome to the Money Puzzle.
Thank you, Jane, thank you for inviting me to go to the show.
My pleasure. Let's get right into it. So firstly, I'd liked for you to tell our listeners a little bit about yourself. So you're your background and what's your history of private equity? What he attracted you to this type of asset class?
Sure to be a quick overview. My journey started in two thousand when I was still in South Africa and I had an opportunity to join a young fintech startup and they were going to build a new wealth management platform. I had experience in that industry and then as a key person in the venture, I wanted to lever reach my knowledge, use my experience of wealth platforms and technology, and to do that I ask them to invest in the holding company who actually owned a fintech startup at
that time. That was quite nice and two years later, when I left the fintech to pursue my next venture, I then realized, hang on, these shares are now locked up somewhere and I need to find a buyer for my shares or leave it beyond and wait for a future exit. So that was my first introduction. It's into liquidity and also the premium on buyer and selling the shares and the differences in the prices. So it was
a good introduction into this unlisted private equew market. It was a good lesson and I managed to sell my shares for a slight loss, but I went on and I learned from that.
Great So to start, you fell into it by default you joined a company that was a private company that was growing. So it wasn't so much you were actively seeking a private equity investment. You were a staff member that had equity in this company.
That's right. Yes, I wanted to just being a normal STOLF member and also be part of the key team. I wanted to leverach that knowledge and so look, I want to take my investment and grow it in a higher capacity.
Perfect you started there, and then what happened from that point? What more did you do in private equity?
Then? Was the normal business world. I started a business as well, and when I moved to Australia, I started another business year and through starting that business, I got involved in another fintech startup, also in the wealth platform industry. This was a wealth platform that offered their products and services to Australian financial advisors. So it sounds a bit
like a case of deja vu, and it is. So I ended up investing in the startup and I educated myself on shelled agreements, company constitutions, got introduced more to subscription notices, company valuations and your financial statements. And in this case, I also engaged with legal advice and legal counsel to review shelters, agreements and the terms and conditions
and term sheets. It was a bit expensive because I had to pay the market rates for legal advice, but it was a good lesson again because I learned a lot from reading pages and pages of documentation got it.
So it sounds like that this is another case of using your professional experience be in a company, but also invest in that company as well. Apart from that, have you invested in other companies that you haven't worked in or you don't work in.
Definitely, As you can see, at first, I started with companies where I had a deep understanding of the industry and I had a passion in that world, and over time I started to look for other opportunities out there. I branched out into other industries not connected to world platforms, but still were the heavy focus on technology because of my background in technology. So one was a evaluation platform for property, another one was a financial advisor platform providing
financial advice technology. Another platform was purely building out fund management type solutions. And then over time I even ventured into more nuts and bolts type of businesses, VISA businesses that would say invest in it's a fund management company that they would then acquire a company that builds patios and roofs, for instance, and they have then a different profile. It's a lower risk profile, and there's a dividend income
coming out of that investment. Yeah, so it actually brought it out to anything.
Else excellent, But it still sounds like that the type of companies you invest in, you understand them because they're either in the finance sector or the IT sector, or maybe a crossover of both. So is it fair to say that you have a preference to invest into private companies that you have a finger on the pulse using that saying rather than something that might be totally foreign to you. So investing into a home tools company, for example.
At first, I obviously wanted to be engaged and wanted to understand a lot about the businesses. And then over time the last few investments I've made were more about show me your track record, show me your history with a company, show me the returns, look at the balanced statement, financial statements, and look at the risk profile. I've actually I've entered into other more I would say, as I
said before, the nuts and bolts. The other one is also a building trust company, so they actually provide construction services. I don't know anything really about that industry, but I like the fact that there's a sound financial model and it's literally about products and services they sell and then they have estimated earnings and then they either deliver on that or not.
I'd like to know more about how these opportunities come across your plate, but also how you do the due diligence. We might do that a little bit more detail later, but for now, I'd like to move on to getting started in private equity. So what type of investor is suited to private equity in your opinion?
Yeah, this really depends on each individual. A probaect with is quite different from list that shares and some of the factors you need to consider for yourself as an individual as your financial capacity, how much savings you have that you want to allocate to this. As at last, what kind of risk do you what kind of risks are you prepared to take, because many of these investments are quite risky and and some you could actually lose
your whole investment. And then also the other one is how long would you are you prepared to keep your capital locked up in this investment because they're typically are quite lengthy type of investments that could be five plus years, ten years, sometimes even love it.
I think it'd be good to explain a little bit more about what is the whole life cycle of a private equity or a venture capital investment, And maybe we'll start with just clarifying the difference between venture capital and private equity, and then we'll talk through what the life cycle is, and we're going to have a brief chat about the different rounds of funding as well that companies
would typically seek. So my understanding is that a venture capital company is more at the incubator early stage, where they're at their infancy. They're either just an idea or they're a company that's relatively recently formed that's running at a loss because they have wages, but they're not selling any products or services yet, whereas private equity is a
little bit further down the track. They're not there as a share market listed company, but they're probably developed with regards to their offering, and they still maybe running out of a loss and they may need some capital to kicker off marketing further or to develop further, but it's later on. So is that your understanding as well, Really how private equity and venture capital are different.
Yeah, that's right. So usually most people will start up in the first phase will be I've got an idea and I think I've got a great business that I'm going to know bold and typically you could access there are different ways you could access capital. You could go to friends and family, if you get your own funds, et cetera, and you kick that off over time. What's what you could do is then go to an early
stage and again you would talk to angel investors. You'll have your pitchtick ready, which will explain later exactly what goes into that. You'll have areas that you highlight and that which is your valuation, how much capital that you require, and how you're going to sell that to the to
the angel investors. And then over time you get into a growth phase where you will then do subsequent rounds and this is how you can get more private equity companies and also venture capital companies to then invest bigger chunks of capital into your business. And now you're in the final stages and if you're lucky, then you could actually have a positive return where you actually have dividence coming out or not, or if it's a growth based company.
You could focus on growing the business through revenue, and even if you're making a loss, as long as there's enough growth to back it. You could then get uses to come in as well or other institutions, and an exit can be prepared where you could sell the company as well and work through the phases, or we could ipo it even So, yeah, that was a quick summary of that, and you can dive into more detail into each of the phases again now.
I think that as good as a high level summary. So basically a company starts up. The first one is the angel round, so that's right at the beginning to
help kick things off. And then you have the seed round, which is at the early stage of development, and then you might have a Bridge round and Series ABC and so forth, and then you might have a pre IPO raise or there there might be other raisers beyond that, but the general cycle there with raises, and what generally happens is that new investors brought in, new shares are issued.
Existing shareholders can be diluted because there's more shares now, but generally the company valuations go up every time a company raises capital. That is the hope. It doesn't always happen. Now. One thing which I find interesting because I look at private equity investments as well and have invested in some, is how they come to me and or how they come to you? How do they get in front of us? And the first thing that I always think is why
is this company come in to me? Because in my head I have this thing called the sucker money, and so I think, is this company trying to find the easier source of money? They're showing a fancy pitch deck, a nice PowerPoint presentation with all these charts around the opportunity, the billions of dollars of market there, and how they're going to penetrate that market and do great. And they're hoping to to dazzle the mom and dad investor and
get them to invest into it. But a more seasoned private equity investor or a private equity firm would probably be able to see through that. What are your thoughts around the funding side of things? And also how do they come across your desk these opportunities.
Yeah, so that is certainly true, James. There's, as you said, the term the sucker money, or sometimes the triple F which is the friends, family and fools. So yeah, you've got to watch out and if you have any they're going after the easy money, then you're probably ninety percent of the time, right, there is a lot of that. What I do is I try to see who else
is also part of this investing round. I look at their track record in terms of you are they If they're they're like a Macquarie Bank is also investing then or another listed company or even a companies who are specializing in this industry with big funds or they've done this before, then you know that their due diligence are going to be quite thorough because they're not going to invest their millions of dollars alongside your few hundred thousand
or ten thousand or whatever it is. They're going to make sure that they look after themselves at first. So you can be rest assured that most of the times they've got armies of consultants and auditors, etc. For the due diligence. So that's a good one. If you're in a scenario we don't have other investors or what co investing that you can lean on, then you've got to
do a lot of your undue diligence. And this literally means working through the sessions with the founders, the current executive team, the man, the key management, we're working into the next level down in the company, the senior leadership team in the company. And in my case, because I had some of the knowledge in the industry, I worked in also quite a lot of details into technology as well as the financial models, and I had some experience
in an area where you don't have that experience. You can also then engage with other people who've got similar experience and bring them in. And this is how this market works. As people talk to other people, there's a network of people. You start to build up a I like a trusted network. If I trust this person, then they trust that person. Then I can probably lean on the trust relationship between these parties, and then I can also start to do some more due diligence there. Unfortunately,
it's ninety percent of the cases. You do tend up to tend to do a lot of the due diligence for yourself because this is your money that you're going to invest. And yeah, if you don't do that, it's a buyableware situation.
Yeah, and you've told me before with some of the you diligence that you do you mentioned doing due diligence on the management team, and that can include things like looking at their LinkedIn history, where were they at before, were there's companies successful, what was the exit for that company, and you can get a census to whether they're being successful or whether they're serial entrepreneurs where they're jumping from
one startup to another startup. They're raising capital, so ie using other people's money to try and get a business off the ground. If it does great, If it doesn't, they sink it and they start something again. So they're the type of entrepreneurs we probably don't want to invest into, whereas we have others that have been management in companies. They've grown it it's e the iPod or they've trade so out it and then they go for a holiday for a while, they come back they do something else,
so they've got pedigree, they've got runs on the board. Well, what we'll do is Rudy will take a quick break and then we'll come back and have a chat more and we'll jump into private equity jargon. Listeners will be back in a moment. Hello and welcome back to the Money Puzzle. I'm James Gerard, writer a contributor to the Wealth section of The Australian and also Financial Advisor with Financial Advisor dot com dot Au. And on this week's show, I have Rudy angle Breck. So we're going to dig
deeper into private equity. But before I do that, I just want to remind everybody again that this is general advice, not personal advice, so please seek out a qualified advisor before making any decisions. Now, Rudy, let's have a chat about some jargon in private equity. There's all these words that sort of flow around burn rates and runways and pitch decks. So what don't we go through some of those top ones and you can just break it down
in simple English? What are these things? So let's start with a pitch deck p t ch deck.
What is that? So a pitch deck is very detailed. Usually it's a presentation that could from literally five pages to fifty pages, and the whole key is to get the message across in thirty minutes or less to invest. As you can imagine that a founder and their team I have to pitch this deck to probably ten two hundred people to raise money, and they want to make
it as streamline as possible. The details that will usually be and that pitch check will be a quick over with the company, the market opportunity and the company's unique selling proposition, the competitive advantage. They have a bit about the management team. If they've got a good management team with a good track record and runs on the board, then they're obviously going to put that in there. The
business model with their revenue streams and cost structures. And I usually look at those numbers and I multiply all costs by three on our revisal revenues and divide by three, and then I also look get up and down cases and that so I always look at those numbers. Never trust the numbers. Ask these questions on those numbers when you see them, the product offering or the service offering
that they will have in the pipeline. And then they even should have financial performance a sorry performance as well as future projections and forecasts. And then also a little bit more about the capital structure in terms of how much money they've got in the bank, how much money they're inter raise, how much money they have raised, and
what evaluations they've used in the past. And then basically some of the risk factors that they see or companies carry risk and issues that they can try and look at and prevent, and then some reasonable excess strategy or sometimes they don't have one, but if they have one, then usually some clear numbers or in three years they want to do this or sell to someone or list, et cetera.
Excellent thanks Reddie. What I find is a red flag when I review pitch decks is if there is no financial forecast, if there are no financial numbers in there around income and expense or even projected because in a pitch deck that the company is trying to show you things that they want you to see. If they don't want you to see something that they don't put it in the pitch deck. So I get a bit concerned when they're light on the financial and the forecasts and
they're more about the big picture. This is the market opportunity because they then have this valuation which could be anywhere from a few hundred thousand to tens of millions of dollars, and there may not be as much science behind it as the investor would want, particularly if they're
not showing that the financials in the pitch deck. So it's always prudent that if you're interested in the company and you see the pitch deck, but it has even if it has financials, it's generally a good idea to ask for what's called the data room, which is generally a cloud based location where the company will store more information.
So they might have an Excel spreadsheet with financial forecasts, and it's interesting to drill down into that because although they may be projecting certain things around the growth of the company, you need to check that and be critical. As you were saying, rudy of those assumptions. So is the growth rate they're using of say forty percent, is that in line with the market growth rate for that particular company. Is it achievable to increase customers from x
to y over a twelve month period? Is it reasonable that they're going to only spend this amount of marketing to acquire customers. So all these sort of things need to be sense checked to get a good understanding of is this a realistic picture of where the company might be into the future. What do you reckon really.
One hundred percent agree a good check is exactly the historic numbers. Look at the historic numbers, and if there was a forty growth rate over the last two years and they're projecting a two hundred percent growth rate over the next two years. You want to know what events are actually going to trigger those and you can ask questions around that, and you can see on a growth visually, why is this thing spiking up the revenue whatever your costs and was the cost not going to go up,
et cetera. So there's a lot of promit there can be a lot of promises made without the real backing, and that you want to see historic numbers because that gives you good indication.
Yeah, no, it does. And what would be a rule of thumb or is there one for valuations? How do you value a private equity company? Is there is it a multiple of revenue? Is it a multiple of profit? What about in the early stage, whether there is no revenue or profit, there's just an idea or maybe just losses. That makes it more difficult to value that type of company as well.
Yeah, so, first of before we jump into the manue, the rule of fun could be if you don't have any earnings or profits, then you could use revenue or sales and you could use multiples there. You could you literally look at other companies in the market who are either listed, so you can then get good ratios in terms of their revenue is x and their evaluation is
a multiple of X. What is that multiple? You can start to apply that, but remember listed company is different from an unlisted company because they are liquid and they have nice financials that you can look at. In this case, you can then enough to reduce the multiple by a factor to so it's unlisted, it's not proven yet, it's still in the growth page as well. That's one way. If there are earnings you can use that. And again you can relate it to other companies in the market,
if they are listed or if they are unlisted. You might get information. You might have had a company that you raised, that you were involved and then they raise money and you can use similar multiples. And you can also then look at the unique areas that they claim that's going to be better, and then you could adjust the multiples. But those are typically the rules of umbers. Look at other companies and multiples and try to find something that works.
Got it in the companies that you've invested into. What would be a broad range of multiples of revenue that have been attached to valuations of those companies that are we talking in five times revenue, ten twenty times.
Yeah, it's a if it's a non if it's non tech, you could have three times to five times sale sales, so the revenue so free times. It depends on the industry. Again, look at the industry. Tech companies could sometimes go five times or more. And obviously if they have a unique product of no one else as then the scars the limit. Someone could literally see the idea and value that differently
and you could get ten times or twenty times. And if you look at in the past, you could have seen typically crazy types of multiple supply to certain industries and certain companies. But look at the average and work with that. But yeah, five to ten times is high, but it can be happened.
Well, let's do one more jargon and then we'll move on. Really, tell me what is the burn rate? What does that mean?
Okay, a company obviously, every day that it operates, it has expenses and it also has revenue coming in. And if you measure that on a monkey basis, then this is how much money is either being burned because they're running at a loss or if they're lucky, they actually show profit. But usually because you're investing in a growth oriented company, they'll be burning at a loss, and you measure this on a monkey basis. And then the other piece of jargon that we can add on is the runway.
So often you've calculated the burn rate, you can then figure out based on these numbers and your future cash flows, you're going to have, say twenty four months of runway left. And it's typically used in the context of an aeroplane when they want to take off. There's a piece of runway left and the aeroplane needs to be up in
the air before it runs out of runway. And obviously if the runway is going to be too short, then we need to raise more money again and that's when the next round happens, hopefully at a higher evaluation.
I like it. I like the financial engineering there with the wording of it. Rather than saying I'm losing heaps of money every month and I'm going to run out of money in X number of months, I've got a burn rate of this and a runwate of that. Sounds a lot better.
Yeah, all right.
Let's have a chat about risks. So what would you say the top couple of risks that you would say to investors to think about before they jump into a private equity or adventure capital type investment.
We've touched briefly on this before and when we discuss what top investor would like to invest, but and what factors you need to consider. So the risk or the one is liquidit to your risks. So pe or private equity investments are not traded on public markets, and your capital could be locked up for five to ten years. Sometimes you like in less than five, but it's a long time. So are you prepared to have it locked
up and you can't sell it? If you sell it, usually sell it at a discount to other investors, and you don't want to do that market risk. If there's a market downturn, then the cost of capital and debt becomes quite expensive. So if you raising capital and investing through a downturn, obviously you could invest at a time when the company is valued at x, and then two years later they valued at a lower evaluation, and then, like anything in any investment that could be lower, they
now need to raise new money. They ran out of run way. They raise new money and the shares that the issue will be at a lower evaluation. This is known as a downrounde and typically it's not favorable and it will leave the current shelds even further. And then there's the other one, which is the operational and execution risk.
So the company and management team simply they just could simply struggle to execute operationally, or there's no sales or something change in the market, some regulation came through and closed down the market opportunities for them. So that's a few of the risks.
Got it all right, So we've got liquidity. Money is trapped until there's an exit event. In most cases, there's this market whereso conditions can change and evaluation of the company can be affected. And then we've got operational resk so things may not go to plan and that might be due to the company itself broader market conditions. That's really good, Rudy. I want to get your tips and tricks for success in private equity. But before we do that,
let's just take another short break. Hello and welcome back to the Money Puzzle. I'm James Gerard, writer contributor to the Wealth section of The Australian and also financial advisor with Financial Advisor dot com dot Au and on this week show, I have Rudy Engel break. So Rudy, let's have a chat about tips and tricks for private equity investors. So what are some of the things that you've learned over the years that you think would be useful for a new investor in this area to know about.
I would start off with looking at the people, the management team, the key executives, their track record, much of that I'm comfortable with them, then I can actually relate to them. Is my own personal way of doing a bit of due diligence on the people. First. Ultimately, companies are built by people selling products built by people again and selling it to other people, so it is ultimately
driven by that. The second thing I would do is work through the numbers due diligence questions, try to break their assumptions and models and ideas. And sometimes it could be that you just don't know enough and they do know quite a lot more than you do. But keep on asking the questions that would seem obvious even in that way. Also, don't be too scared by too much technology talk or other questions. If they cannot explain it clearly, then they're going to have to sell these products and
explain it to other people. So it must be simple to understand for you. If you don't understand it, then maybe it's also not for you and you can pass. Another area that I look at as the industry, I'll look at similar companies or compare it. I compare to aaliations like we mentioned before, look at similar multiples. I'll look at how they raise capital, how much capital that they raise, just to get another data point and guideline on that. And in general, I avoid companies with debt.
I don't understand why you would want to raise capital and then use that to service your current debt, even if they promise not to pay back debt and they use it working capital as I just don't understand while they can't just issue more shares. Again, there could be other reasons for that. That's me. I just don't want
more debt. And then be patient, ensure that you're comfortable that the money that you invest it can be locked up for many years, don't expected to have a return next year, and then also accept it not all investments will yield the five x or ten x or twenty x type of returns and multiples that everyone else talks about. Remember, people talk about the winner, not the ten losers out there or the average return spere that in.
Mind excellent and in terms of the way that people can get access to private equity investments, we've been talking mainly about the direct pathway where we're investing, we become shareholders on the share register of a private company. But there's also other pathways available to the everyday investor. There's ETFs. There's a ping Ghana or maybe that's not an ETF, but it's a maybe it's a listed investment company or
it's a listed trust. Ping Ghana have one and they invest into private equity investments, so that's brought through the ASX. There's a managed fund by Schroeder as well. They've got
a private equity fund. So you can take a hands off approach and let a professional fund manager invest into a portfolio of private equity investments for you if you don't want to go through the trenches and the hard work of doing the du diligence yourself, and also if you want to diversify more and have a whole portfolio of investments rather than a smaller amount, because generally private equity investments, if you go direct, they will usually want
you to be what's called a whole sale investor, which means that they will want you to have an accountant's letter clearance as signed off on, which means that the accountant needs to certify that you earn either more than two hundred and fifty thousand dollars per it a past two financial years or your net worth is more than two point five million dollars. And then the minimum investment
it's generally one hundred thousand, sometimes two hundred thousand. Some companies will drop it to fifty thousand, but they're larger amounts that they're not like five hundred dollars, which is the case when you buy shares on the share market. Even for quite wealthy investors. It's quite difficult to invest in a whole heap of private equity investments just due
to the minimum investment restrictions. Funds are another way to do it, and really there's a few websites around, aren't there that they like they crowdfund into private equity investments. So they put up a campaign about a chili sauce or something like that, or a new gin distillery, and they try and get people into that. That's another way
that people can get into private equity investments. But I would caution that pathway because my perception is that pathway appeals to more I have to use that term, but the sucker money because they're throwing more around the images and the market opportunity more than the numbers. In those type of things. It's more of a psychological thing that, oh, yes, I use this product. I can actually go buy some
shares and be a shareholder. But when you have a look at what you own of the company, it might be like zero point zero one percent, whereas you thought it might have been a bit more than that. But it's a little bit opaque with regards to the financials and evaluations. It's more on the idea, that's right.
Yeah. To add on to your comments about investing in the listed trusts or on the ASX, there are companies and funds that will offer you a product where you invest, say fifty or ten thousand dollars into the fund, and then the fund manager will perform all the due diligence for you because that's their job, and they will then obviously tides an annual fee to manage the fund. There
will be performance fees that they'll sar. It's based on the performance of the assets in the fund and the companies invest in and you're just one of the investors in this pe fund. However, it can be worth it, especially when the fund investing in multiple companies over the timeline of the fund. They diversify the risk for you, and they will also offer you some liquidity where you might not have to wait five to seven years. You could once a year or twice a year be able
to retraw a percentage of your funds in them. So that is one way instead of going crowdfunding, where James totally right. The crowdfunding feels like a hailgun approach. We just spray money and hope to get something back, where at least with a fund manager with a good track record, they will do a lot of the work for you.
That's right. Really, we're almost out of time. If you could give me one final thought with regards to private equity and venture capital to take our listeners away with, what would you say?
I would definitely take the advice of a financial advisor to walk with me this through the detail and assess my risks and my profile and goals before I just go and invest. Because the last thing you need is to invest a big chunk of your life savings into something and then wait for that. We might not get a reach out, so make sure your ascid adication and your goals are aligned.
Fantastic. Thank you for that, Rudy, and thank you so much for joining us today. It's been really insightful and I've enjoyed our chat and I'm sure our listeners will as well. So thank you again, Rudy Engelbrek for joining us on The Money Puzzle.
Thank you, James really enjoyed it. Thanks for the time.
Excellent, And to our listeners, thank you for tuning into today's episode of The Money Puzzle. Send in a question and James Kirby will answer it in a couple of weeks time. I'll be with you for the next two weeks, and coming up on next week's episode, we're going to
have a return of an accountant named Timothy Ricardo. He was on a few months ago when I last guest hosted, and he copped a bit of flak from his clients and friends because we were talking about what are some of the things that you can claim as a tax deductions and we had a lot of weird scenarios, but Tim seemed to say no to everything, so Tim's been given the task of saying yes to something, so he's going to come prepared next week with some tax deductions
that you didn't think that you could get that you could actually get, as well as talking about other contemporary tax issues. So we look forward to that. You can tweet us your thoughts, just use a hashtag the Money Puzzle or one word or email us on the Money Puzzle at the Australian dot com dot au. Until next time, I'm James Gerard. Talk to you soon.