The FinTech Report Podcast: Episode 65: Perpetual Corporate Trust: Investing in domestic & global fixed income

1 - > ZOOM0093_Tr2: Hello and welcome to the FinTech Report podcast. 2 - > My name's Glen Frost. 3 - > I'm your host, and today I am delighted to welcome Perpetual 4 - > Corporate Trust as our guests. 5 - > Perpetual Corporate Trust is a leading fiduciary custody and 6 - > digital business operating in Australia and Singapore, with 7 - > five business divisions offering a unique range of products and 8 - > services.

9 - > PCT is part of the A SX listed. 10 - > Perpetual group Digital and perpetual CT markets is the 11 - > innovation arm of PCT and where the fixed income intelligence 12 - > SaaS solution sets. 13 - > This division is a professional service business delivering SaaS 14 - > products and data services. 15 - > Its mission is to enable client success through the next 16 - > generation software and service excellence.

17 - > My guests today are Emily Boden and Heather Gale. 18 - > Emily is head of institutional sales at Perpetual Digital. 19 - > She's worked on the sell side within fixed income global 20 - > markets for over 20 years, including primary and secondary 21 - > bond and credit issuance, derivatives, and cash products. 22 - > Heather is head of markets and operations, has over 20 years 23 - > experience leading strategic funding capital and investment 24 - > activities as CFO, treasurer and head of products positions.

25 - > Heather and Emily, welcome. 26 - > Thank you very much for being our guest. 27 - > ZOOM0093_Tr1: Thank you for having us. 28 - > ZOOM0093_Tr3: Thank you.

29 - > ZOOM0093_Tr2: Okay, let's really start off with some. 30 - > Some real basics. 31 - > We're gonna be talking a few acronyms, I think in the podcast 32 - > for the next 30 minutes. 33 - > I mentioned their fixed income.

34 - > I mentioned that you're running a SaaS platform. 35 - > Let's start off with, for those perhaps outside of fixed income, 36 - > explain what those products are. 37 - > ZOOM0093_Tr1: Okay, so fixed income is generally bonds. 38 - > You can have a mix of bonds, you can have government bonds and 39 - > semi-government bonds.

40 - > They're all rated. 41 - > You have a mix of corporate bonds, corporate bonds can be, 42 - > rated and unrated. 43 - > So we classify them as the ones that aren't rated junk bonds. 44 - > And then we also do.

45 - > Cash products. 46 - > So with the cash products, you've got your NCDs, and your 47 - > certificates Yes. 48 - > and then term deposits. 49 - > And everyone's aware of what term deposits are.

50 - > So they're the two products that we deal with at perpetual 51 - > markets. 52 - > ZOOM0093_Tr2: Excellent. 53 - > And when we talk about SaaS, what do we mean by that? 54 - > ZOOM0093_Tr3: Yeah, look what we mean by that is, us providing 55 - > the infrastructure for businesses to be able to, 56 - > perform and service their clients.

57 - > So we are in the business of providing, solutions, providing 58 - > the technology, in a way that's easy for businesses to access 59 - > and maintain. 60 - > Gone are the days of on-premises, systems and 61 - > maintenance and, dealing with the upgrades. 62 - > Really, we're here to make it easy. 63 - > It's how do you log on, service your clients and access the 64 - > markets you need to get into.

65 - > ZOOM0093_Tr2: Excellent. 66 - > So what we're talking about is a sort of cloud-based platform 67 - > where your customers can, anywhere, anytime by. 68 - > Your products. 69 - > Yeah.

70 - > So let's talk about, who your customers are. 71 - > What would be a typical client for you guys? 72 - > ZOOM0093_Tr3: Yeah, look, I think our clients, perpetual 73 - > Corporate Trust is, basically a business to business sort of 74 - > business. 75 - > We're here to provide infrastructure to the market.

76 - > Largely our clients are, wealth firms. 77 - > They are advisor groups and things of that nature. 78 - > So we're not generally direct to client. 79 - > So we are here to help those sort of groups writing advice to 80 - > their clients to get access to a market.

81 - > They've traditionally, struggled to get direct access 82 - > ZOOM0093_Tr2: That's a very interesting point because I 83 - > think part of the value proposition, if you like, of 84 - > SaaS businesses, digital businesses, and FinTech blended 85 - > with financial services, institutions that have got 86 - > storied histories and access to very large deal sizes and 87 - > product sizes is that you can. 88 - > Bring down the cost of entry. 89 - > You can fractionalize things, right?

90 - > Can you talk us through exactly what it is that is the unique 91 - > proposition? 92 - > ZOOM0093_Tr3: Yeah, absolutely. 93 - > So look, Australia generally, if you look. 94 - > Globally has been underweight in fixed income and there's some 95 - > structural property challenges to that.

96 - > One of those is how, under the Corporations Act, minimum sizes 97 - > of wholesale investors being 500,000. 98 - > And, to accommodate that, things like Ostra Clear have had 99 - > minimum sizes of that amount to ensure that was met. 100 - > ZOOM0093_Tr2: And when we are talking minimum size, we're 101 - > talking per 102 - > ZOOM0093_Tr3: Per So you're looking at 500,000 and even if 103 - > you are a very, high net worth. 104 - > Individual or investor, that can be a hurdle.

105 - > It's a large position to take in any one bond. 106 - > Where we've found the difference has been is that we've, 107 - > partnered with Euroclear, for this clearing and settlement 108 - > services you have access to pretty much 99% of bonds that 109 - > are issued in Australia. 110 - > However, Ulee don't impose those large minimum values. 111 - > And in fact, they'll let you invest down to the minimum in 112 - > the transaction documents, which for many bonds can be as little 113 - > as$10,000.

114 - > In Australia you still need to be a wholesaler sophisticated 115 - > investor to buy that sort of product. 116 - > But the barrier to entry in terms of the product value is 117 - > greatly reduced. 118 - > And we found huge uptick in demand because of that. 119 - > ZOOM0093_Tr1: And so what that does is that, that actually for 120 - > the individual, they can invest in more names.

121 - > More, industries. 122 - > So the risk of their portfolio reduces significantly? 123 - > because they can have exposure to many more bonds rather than 124 - > just the one or the two bonds. 125 - > ZOOM0093_Tr2: So what we're talking about here is perhaps 126 - > sector specific risks.

127 - > Are we talking foreign exchange risks? 128 - > Currency 129 - > ZOOM0093_Tr1: risks? 130 - > Yes, because we do multicurrency. 131 - > We see us, GDP Euro, we got asked to do Portugal this week.

132 - > Basically we can do whatever Euroclear trade in, and we 133 - > looked at that. 134 - > That was well over a hundred currencies. 135 - > Yep. 136 - > And we can absolutely facilitate that.

137 - > So with that, again, so you've got currency industries names 138 - > specific. 139 - > And instead of going, okay, I've got a million dollars and I can 140 - > only buy two lines, I've got a million dollars and you can buy. 141 - > 20 lines. 142 - > ZOOM0093_Tr2: Got it.

143 - > Heather, you mentioned it might be high net worth or ultra net 144 - > worth, and that is a big category of investor, in this 145 - > country. 146 - > But it might also be, a local state government. 147 - > It might be federal government, it might be, SX corporations, it 148 - > might be private sector corporations. 149 - > What kind of, blend of organizations are the end user.

150 - > So behind the, some of the big names that you might have. 151 - > Trading as your customers, who are the end user customer. 152 - > ZOOM0093_Tr3: Yeah. 153 - > Look, certainly all the ones that you've mentioned there.

154 - > But also there's a lot of family trusts, self-managed super, so 155 - > larger family trusts, self-managed super, to be 156 - > classified as a sophisticated investor. 157 - > The barriers to that aren't terribly high. 158 - > If you've got a. 159 - > A self-managed super of a reasonable value could well 160 - > qualify.

161 - > So we certainly see a lot of that sort of in that space. 162 - > Family trust, self-managed super, and access to that 163 - > diversity is important, in that sector. 164 - > So that's certainly what we're seeing. 165 - > This product is really specifically caters for some of 166 - > the larger ones.

167 - > some of the larger councils or institutional investors already 168 - > have access'cause they're buying big lines of stock, so this 169 - > isn't so much of a barrier for them. 170 - > But it's when you take that next level down that people aren't 171 - > looking for options other than investing in a fund. 172 - > And this does give them this direct access. 173 - > ZOOM0093_Tr2: Cool.

174 - > Let's look at, the genesis of where all this started. 175 - > What made Perpetual corporate trust move into software? 176 - > The service and in particular, into bonds. 177 - > ZOOM0093_Tr3: Yeah perpetual Corporate Trust, acquired a 178 - > business called Laminar Capital in, 2021, I think it was about 179 - > three or four years ago now.

180 - > Laminar Capital was a specialist sort of middle market, fixed 181 - > income, advisory and brokering firm, and also had some 182 - > proprietary software that they'd developed, to manage those 183 - > portfolios, both for their own business and for their clients. 184 - > Perpetual Corporate Trust acquired that business with a 185 - > view to it was a good fit to their traditional custodian 186 - > business. 187 - > PCT is where. 188 - > not, probably is the largest custodian of real assets in 189 - > Australia.

190 - > And really has a goal to be the leading, custodian of unlisted 191 - > assets in Australia. 192 - > So the acquisition of that business and the ability to 193 - > partner that technology with the custody business was a big game 194 - > changer. 195 - > And there's people out there doing either, either a SaaS or a 196 - > custody product. 197 - > But to pull the two together to have that end to end, was a key 198 - > differentiator.

199 - > So that was the genesis of it about three or four years ago 200 - > now, and it's, gone extremely well. 201 - > ZOOM0093_Tr2: Yes. 202 - > Well, tell us, you've been going for a couple of years. 203 - > Tell us what kind of volumes are going through the platform and 204 - > what your ramp up of customer numbers has been.

205 - > ZOOM0093_Tr3: look, it is a, as somewhat of a slow burn in terms 206 - > of customer numbers. 207 - > It is a step change for a lot of businesses around, do they 208 - > invest directly in fixed income versus in a fund. 209 - > So it's taken some time to Work with advisor firms and, get out 210 - > there and spread the word around what this can look like. 211 - > 'cause it is different to the current method of investing.

212 - > So that's, taken a little while. 213 - > We do have some large, cornerstone customers in the 214 - > service. 215 - > And certainly the performance and flows they've seen from 216 - > their underlying customers has far outstripped their 217 - > expectations. 218 - > So probably our largest customer is growing at.

219 - > In the region of month, on month at 5% a month, which, and that's 220 - > over probably two or three years now, which is, exponentially 221 - > huger than they expected. 222 - > And what we expected, and I think it's just a testament to, 223 - > the attractiveness in particular of the different names in the 224 - > portfolio. 225 - > I think a lot of the underlying customers like the idea of. 226 - > Investing directly in a Commonwealth Bank or in a 227 - > Microsoft or Adele in terms of a bond.

228 - > So it's really changed the landscape in terms of that 229 - > access and obviously interest rate environment is useful in 230 - > that regard. 231 - > ZOOM0093_Tr2: Yes. 232 - > Excellent. 233 - > do you have rough numbers on, how many people you've got On 234 - > the platform in total?

235 - > what's your kind of, whether there's assets under management, 236 - > whether sales if 237 - > ZOOM0093_Tr3: you 238 - > ZOOM0093_Tr1: Yeah. 239 - > So we have a mix of the institutional private wealth 240 - > divisions and they're like the nabs and the JB Wars. 241 - > And then we have the advisory firms. 242 - > They're the larger advisory firms like likes of shores.

243 - > And then, we're also talking to a few. 244 - > Boutique firms like the likes of Climb. 245 - > And Heather said, it's growing exponentially. 246 - > But I do think it's also the background of fixed income in 247 - > Australia, like generally.

248 - > Previously we are the first in market that actually has the 249 - > entire workflow under one roof. 250 - > We can. 251 - > Invest directly into a bond to get fixed, income exposure into 252 - > your portfolio. 253 - > Whereas five years ago, you had to go via an ETF or a 254 - > multi-asset fund.

255 - > Or you had to invest in the 500 K clicks, which is not 256 - > realistic. 257 - > look, the flows that we are seeing through the platform now, 258 - > the team, they're managing, around$10 billion, in 259 - > transaction flow with about two and a half thousand transactions 260 - > per week going through the platform. 261 - > And like Heather said, we're two years in, I think two and a half 262 - > years. 263 - > we're still setting it up, engaging with the clients.

264 - > We are right at the forefront of it doing releases, product 265 - > releases, and still building the platform and listening to the 266 - > clients and getting told, what should we do? 267 - > How can we build this better and make it more efficient? 268 - > basically how it works is, the clients or the advise'cause it's 269 - > a B2B. 270 - > Yes.

271 - > So it's, yeah. 272 - > So it's the advisor. 273 - > the underlying client or the holder of the bond. 274 - > They're not the ones that are actually engaging with us.

275 - > We're engaging with the advisors and they'll have a list of the 276 - > liquid bonds they might have an approved product list that their 277 - > institution has said, look, we're comfortable with you going 278 - > out and selling these If their client says, yeah, okay, I would 279 - > like to buy X amount of this, they'll just pop it into the 280 - > platform. 281 - > And that's what they'll see. 282 - > we take care of the rest of it so we can do the execution. 283 - > Then we do the pairing and the settlements of the trade.

284 - > We do all the trade confirmations, the coupons, we 285 - > do all the valuations, and all of this is sent out to the 286 - > underlying holders. 287 - > Of the bond, the advisors can get hold of these as well. 288 - > And then, your team does all the Coupon payments. 289 - > They do any corporate actions on the bonds.

290 - > ZOOM0093_Tr3: Yeah, and I think that's one of the benefits of 291 - > being within, PCT as well. 292 - > As corporate trust managers, pretty much. 293 - > 95% of all r and BS in Australia. 294 - > we have a large payments team, for instance, that deals with 295 - > tens of thousands of payments a day for multiple billion 296 - > dollars.

297 - > So we've got, about 40 or so onshore staff that deal with 298 - > payments. 299 - > We've got operations teams on shore, so it's one the key 300 - > differentiators as well This is a extension to what we do as 301 - > corporate trust. 302 - > But we are well versed in this space with those relationships 303 - > in place. 304 - > So it's certainly not starting from nothing in regard to that.

305 - > I think that combined with the technology has provided that 306 - > backbone to the service and the feedback we have been getting as 307 - > well is, certainly a differentiator around service. 308 - > The element of, diligence from the middle office team is 309 - > certainly, a differentiator, especially as compared to some 310 - > of the global custodians. 311 - > And it's not to knock the global custodians out there, largely 312 - > they're equities houses. 313 - > Our focus within corporate trust is not equities.

314 - > It's pretty much unlisted. 315 - > How do you deal with OTC? 316 - > What does that look like? 317 - > It's not just the churn of it all comes in, it rolls through 318 - > as an inequities house.

319 - > So we think that's a big differentiator 320 - > ZOOM0093_Tr1: and the team sits together as well. 321 - > We're all on the same time zone, like we're all highly 322 - > specialized. 323 - > It's a small team, but very experienced. 324 - > ZOOM0093_Tr2: Lovely.

325 - > Given the complexity involved in putting the product together, 326 - > both from a. 327 - > Sort of logistics, point of view, payments, custodian 328 - > custodianship. 329 - > How did you put together your business model and I guess look, 330 - > and as you say, it's early days it's you're two years in. 331 - > Can you give us a rough idea of how you charge customers for the 332 - > service?

333 - > And look, I understand there's commercial in confidence. 334 - > but if you could just go through your thinking or the model that 335 - > you have, that would be great. 336 - > ZOOM0093_Tr3: So we charge, our customers a fee based, on funds 337 - > under management. 338 - > So it'd be a basis point fee based on funds under management.

339 - > And there's also direct pass of costs. 340 - > We don't make any margin on that, but any bank costs and. 341 - > Bank fees, that is a direct pass through. 342 - > So it's a margin on funds under management.

343 - > However, what we find most of our clients do is that we are 344 - > able to assist them in passing through custody fees to their 345 - > clients. 346 - > We might charge, say, 12, 15 basis points on funds under 347 - > management in terms of the fee. 348 - > It's up to our client to decide whether they would like to 349 - > charge their underlying client a custody 350 - > ZOOM0093_Tr2: Got it. 351 - > ZOOM0093_Tr3: So they might say I'm gonna charge that client 20 352 - > basis points, as a custody fee, and we'll facilitate that as 353 - > part of our service offering to, deduct that fee from the 354 - > client's coupon payment.

355 - > Report that all to them, provide them statements disclosures and 356 - > remit that to our business clients. 357 - > So we find for a lot of clients, there's not much free in the 358 - > world, but it should be a recoupable fee depending on 359 - > their fee arrangement with their client. 360 - > if we are charging 15 basis points, they might charge their 361 - > client 20. 362 - > So in fact, they might come out.

363 - > Ahead in that scenario. 364 - > ZOOM0093_Tr2: Yeah. 365 - > No, I like that. 366 - > It gives your customers huge amount of flexibility to set 367 - > pricing structures for their customers, correct.

368 - > The sort of end holder of the product. 369 - > Yeah. 370 - > Now that's really interesting. 371 - > Let's talk about, the team size.

372 - > You mentioned there was certain number of people in payments, 373 - > and you're all based Australia. 374 - > Tell us how big this entity is. 375 - > ZOOM0093_Tr3: Yeah, absolutely. 376 - > So the payments team themselves has about 50 people in the cash 377 - > management team, all based in Australia.

378 - > that's the pure payments part. 379 - > The middle office team, has about, 10 people and that's, 380 - > more of a, A mix of client facing and administration, so 381 - > you're more complex dealing with corporate actions and things of 382 - > that nature. 383 - > We then have our development team of perpetual digital. 384 - > I'm not 385 - > ZOOM0093_Tr1: So yeah, we've got that team.

386 - > ZOOM0093_Tr3: that team. 387 - > ZOOM0093_Tr1: So we've got a head of product and then there 388 - > are four people underneath him. 389 - > We've got an execution team for, if you want to utilize that. 390 - > There's six people part of that team.

391 - > And then a sales team. 392 - > we are, all spread out across, victoria, Sydney and Queensland, 393 - > I should say New South Wales, not Sydney. 394 - > Yeah. 395 - > But then it, there's a broader team in PCT that support us as 396 - > well.

397 - > So we've got a digital team, which looks after the 398 - > infrastructure. 399 - > ZOOM0093_Tr3: a hundred or so people in that team. 400 - > ZOOM0093_Tr1: Yeah. 401 - > We've got legal marketing, compliance and risk that all 402 - > lean in.

403 - > So it's I think in total there's 350 people that work within PCT. 404 - > And then that's across sort of three or four different arms. 405 - > And we are one of those arms, but then you've got the service 406 - > teams that support us as well. 407 - > ZOOM0093_Tr2: Lovely.

408 - > I'm keen to pick up on something you mentioned earlier that, I 409 - > think you spoke about this idea that there might be an appetite 410 - > from customers for, let's say a Microsoft Bond or an Apple bond 411 - > or something else. 412 - > And obviously those big tech stocks have done very well, but 413 - > there's been a growing, usage of corporate bonds, and 414 - > particularly I think as some have. 415 - > And certainly in the past year been using bonds to raise money 416 - > to invest in AI and do all those sorts of amazing things that are 417 - > gonna change, FinTech and finance in, in ways we don't 418 - > even understand at the moment.

419 - > I was just wondering whether you have a view on. 420 - > Whether, there are, there's a sort of surge amongst, 421 - > Australian investors for the American Tech bonds. 422 - > Or whether there is, like you also mentioned there was, you 423 - > had conversations about whether you would bring on, Portuguese 424 - > bonds. 425 - > So what's your thinking about who, where, when, and why around 426 - > the 427 - > ZOOM0093_Tr1: the world?

428 - > Look, I just think generally Australians, moms and dads are 429 - > hugely under invested in fixed income directly, like everywhere 430 - > else in the world like we spoke about. 431 - > They do that rule. 432 - > 40 property, like Yeah. 433 - > Yeah.

434 - > 40 equities split of your portfolio. 435 - > 40 fixed income and 10% cash. 436 - > Yeah. 437 - > Australian that it is getting bigger.

438 - > I think it's between five and 8%. 439 - > So there's a growth there to change that. 440 - > So I just think generally it's where it's liquidity's. 441 - > The problem for bond in Australia, it's ev, all these 442 - > issuances, they come out the primary issuances and you wanna 443 - > get your hands on it, and they're like three.

444 - > like the names that you were talking about earlier, five 445 - > times Oversubscribed. 446 - > Yeah. 447 - > So it's more, I just think it's when people are issuing it that 448 - > you just get your hands on whatever you can. 449 - > That if it's rated, and the advisors are talking to you 450 - > about it and it's a reputable.

451 - > Advisor, they've got a list behind that they're allowed to 452 - > talk to you about. 453 - > that's what I think driving it is. 454 - > It's the names is the liquidity and it's just, there's cash out 455 - > there. 456 - > 'cause we're seeing it like in, and then I guess as well, we've 457 - > got in Australia, the roll off of the hybrids, there's, 40 plus 458 - > billion dollars out there that is going to roll off and is.

459 - > Going and a majority of it's mom and dad's money. 460 - > And it's going to be looking for a home. 461 - > And I would say a bulk of that is going to go into fixed 462 - > income. 463 - > And you could go direct or you go into a fund or an ETF, and 464 - > even if you get 20% of that into, direct, which I think 465 - > you'll probably get more.

466 - > That's, where are we getting the liquidity from? 467 - > ZOOM0093_Tr2: That's the 8 billion if you say there's 40. 468 - > that's a nice little revenue stream. 469 - > ZOOM0093_Tr1: Yeah.

470 - > ZOOM0093_Tr3: And I think to an extent the appetite for is 471 - > somewhat untested because of the various APLs that advisor groups 472 - > have in place. 473 - > It tends to be the approved product lists, not entirely, but 474 - > often are quite, Conservative, in terms of what they're showing 475 - > their customers. 476 - > So I think it's as to what the appetite would be with a broader 477 - > list. 478 - > It's somewhat harder to know, I think to an extent, at the 479 - > moment we're seeing, people may be considering some of these 480 - > bonds as a substitute for term deposits.

481 - > If you're buying a CBA term deposit versus a CBA bond. 482 - > There's a high degree of familiarity with the name and 483 - > what that looks like. 484 - > Australia has a massive love affair with equity. 485 - > And I think that the move from a mix of a Microsoft Equity and a 486 - > Microsoft Bond, I think the market's still moving to that.

487 - > I definitely think opportunity there and especially when those 488 - > sort of minimums are more accessible, I think we'll see it 489 - > come into more and more of the conversations from the advisors 490 - > and their clients. 491 - > Whereas previously it wouldn't have been a conversation, Let 492 - > alone the minimum. 493 - > So now if you've got options around, you've got Euroclear, 494 - > lower minimums, access to international markets, the 495 - > opportunities to invest in those names will become accessible 496 - > when that's, I think, has the ability to change things.

497 - > ZOOM0093_Tr2: That's interesting. 498 - > So when we talk about your future vision of Perpetual 499 - > Corporate Trust, A significant pillar of that has to be ongoing 500 - > education. 501 - > Getting out there and really working with, your corporate 502 - > partners, advisors on what the products are, why. 503 - > How and how to sell them onto their customers.

504 - > Yeah. 505 - > And what kind of things do you do? 506 - > Do you, is that events, is it face-to-face activity? 507 - > What's your sort of action plan there?

508 - > ZOOM0093_Tr3: Yeah. 509 - > Look, it's a bit of a combination. 510 - > We started to be more involved in industry groups, conferences, 511 - > getting out there, talking to people, managed funds well, 512 - > funds generally are easy, ETFs are easy. 513 - > And this is different.

514 - > So it's about us getting out there and talking about it, how 515 - > it might work, and really just that the conversations wherever 516 - > we can. 517 - > ZOOM0093_Tr1: Yeah. 518 - > the product is simple. 519 - > Like we keep it simple.

520 - > there's a list of bonds that are liquid today that you can talk 521 - > to your client about. 522 - > And if you're ready to execute, you just, yep. 523 - > This is the volume that we want in it. 524 - > We go out to market, we get it, we settle it in the client's 525 - > name and we do all the administrative.

526 - > In the back of it. 527 - > ZOOM0093_Tr2: And when you talk about liquidity, that's 528 - > obviously buy and sell. 529 - > ZOOM0093_Tr1: Yeah. 530 - > So with bonds, it's not an exchange platform where you can 531 - > go on and you can see what you can buy on the day, 532 - > ZOOM0093_Tr2: market price 533 - > ZOOM0093_Tr1: sure.

534 - > We can say there's Microsoft Bond out there, there's Dell, 535 - > but there may be no one, there might be. 536 - > No bonds out there to buy. 537 - > Yes. 538 - > And there might not be for months on end, right?

539 - > So you don't wanna talk to clients about buying something 540 - > that's not there. 541 - > So what we do is we scrape rate sheets from price makers, from 542 - > the banks that have the bonds available on the day. 543 - > And so that that you're talking to. 544 - > Your client about what is actually out there and these are 545 - > the real prices.

546 - > Got it. 547 - > And we give you the pricing that we are seeing from the trading 548 - > floor as well, so the prices are more accurate. 549 - > ZOOM0093_Tr2: would you also be a quote market maker 550 - > ZOOM0093_Tr1: No. 551 - > No.

552 - > ZOOM0093_Tr2: So you are not trading? 553 - > ZOOM0093_Tr1: We don't have a trading book. 554 - > so how the market works in bonds is that you've got your traders 555 - > who make the prices and they're the sellers. 556 - > And then you've got the buyers on the other side.

557 - > the traders are always the ones that make the price on the day. 558 - > it's about, how easy is the stock to get what the rating is. 559 - > How often you can actually buy the stock. 560 - > So Gove's, like they're often trading, but a, a Microsoft or a 561 - > Dell or something like that, a lot harder to get.

562 - > So you would think that the margins on that are a little bit 563 - > wider. 564 - > And also it's on what the return is, the coupon payments as well. 565 - > They vary between the different ratings. 566 - > So the AEs are less risky, so obviously not going to get as 567 - > high a return on that, whereas the Triple Bs are slightly, a 568 - > little bit more risky.

569 - > With a lot more attractive margin. 570 - > ZOOM0093_Tr2: Now look, I segued into talking about, what the 571 - > future is, and you mentioned. 572 - > Part of it was working with people to sell the idea of 573 - > investing in bonds, whether they're corporate government or 574 - > whatever. 575 - > Is that how you see the platform?

576 - > Is it more people investing more of their portfolios more often 577 - > in more bonds from more countries in more currencies 578 - > around the world? 579 - > ZOOM0093_Tr3: Yeah, Absolutely. 580 - > I think there's huge growth opportunity there and it's an 581 - > under service market. 582 - > So it's absolutely where we see it being, our goal, to the point 583 - > earlier around trading is, we are here.

584 - > Our primary goal is to be custodian. 585 - > We wanna be here, we wanna provide this infrastructure and 586 - > customer service to the market. 587 - > And we think that the entire market benefits from a healthy 588 - > market. 589 - > So the more people we can have here, the more people that are 590 - > trading, the more, this is an asset class.

591 - > People are looking to buy. 592 - > We think everyone wins. 593 - > And that's really what we are here to do is how do we make 594 - > this a market wins in 595 - > ZOOM0093_Tr1: an accessible market to the moms and dads. 596 - > ZOOM0093_Tr2: And is there any sort of bond that you won't 597 - > touch?

598 - > ZOOM0093_Tr1: We've got some loan products, don't we? 599 - > ZOOM0093_Tr3: Anything that's listed, Oncle or Ucle we will 600 - > deal with. 601 - > That's not to say that there's absolutely different risk 602 - > profiles of those and there's, all sorts of, especially when 603 - > you go offshore, all sorts of things. 604 - > We are not here to provide advice on the risk or otherwise 605 - > of those bonds.

606 - > But there certainly is risk that needs to be taken into account. 607 - > if you're an advisor, just because it's on there doesn't 608 - > mean everything's created equally. 609 - > But we can facilitate it. 610 - > What's probably next for us as well as a business is looking at 611 - > how we can service the alt space more and alternative assets.

612 - > Some of them are quite fixed income, like in terms of private 613 - > loans and things of that nature. 614 - > And that's where we see the natural extension being an 615 - > unlisted custodian. 616 - > ZOOM0093_Tr2: That's interesting 617 - > ZOOM0093_Tr3: Yeah. 618 - > And it is under service.

619 - > 'cause to my earlier point around the global custodians 620 - > loving equity. 621 - > So they love anything that goes through a sausage factory of 622 - > where it looks the same, albeit with corporate actions that 623 - > might be different, but it generally behaves in a similar 624 - > way. 625 - > So alts aren't, not their strong point and probably not where 626 - > they wanna play. 627 - > And we think there's an absolute opportunity for us to explore 628 - > that in partnership with the Australian market, to see where 629 - > we can be of service, and of use, and that's early thinking 630 - > for us.

631 - > But we are absolutely keen to engage and go where, what do 632 - > people need in the old space? 633 - > Where could corporate trust play a role and how could some of the 634 - > things that we have done really well in the fixed income space 635 - > translate into there? 636 - > So I think that's another key area where we don't, I think 637 - > it's early days, but absolutely a strategy and growth area for. 638 - > ZOOM0093_Tr2: That's very interesting.

639 - > Look, that's a kind of great thing to say, let's come back in 640 - > another 641 - > ZOOM0093_Tr3: see where we're at. 642 - > ZOOM0093_Tr2: are at 643 - > ZOOM0093_Tr3: at. 644 - > ZOOM0093_Tr1: let's just get the platform 645 - > ZOOM0093_Tr3: We were talking about it from a strategy point 646 - > the other day, and it is so complex'cause it's from a 647 - > private loan down to a racehorse how do you facilitate that? 648 - > How do you administer it?

649 - > What does it look like? 650 - > There's obviously. 651 - > Great appetite for the Australian market in terms of 652 - > investing in alternative asset classes. 653 - > And it needs to be supported.

654 - > ZOOM0093_Tr2: True. 655 - > And I think, digital and FinTech, is something that is 656 - > now enables this to be done. 657 - > Whereas I think previously it was you needed certain volumes, 658 - > you just, because it was the process was often so manual. 659 - > So I think that the digital world allows people to take 660 - > these Fascinating to hear this story.

661 - > Look as a sort of final question, do you want to shout 662 - > out, how people can get in touch with you, whether it's LinkedIn, 663 - > the website, or whatever as a, whether they, whether you've 664 - > got, have you got any jobs 665 - > ZOOM0093_Tr1: But have a website. 666 - > You can reach out to us. 667 - > I'm head of sales, so you can reach out directly to myself, to 668 - > Emily. 669 - > All my details are on the perpetual, corporate trust, but 670 - > it's just Emily.

671 - > Dot Boden, B-O-D-E-N, at perpetual.com. 672 - > Lovely au. 673 - > ZOOM0093_Tr2: Excellent.

674 - > thank you very much, for taking the time to talk to us and 675 - > congratulations again. 676 - > You guys won best investment platform, at the recent, FinTech 677 - > and banking awards, 2025. 678 - > And, that's where we met. 679 - > it was great to see you guys, showcasing your innovation and 680 - > being prepared to stand up and enter into the award.

681 - > firstly, thank you very much for your time. 682 - > And secondly, congratulations on 683 - > ZOOM0093_Tr1: being award. 684 - > Thank you. 685 - > Thanks.

686 - > It's great to be recognized, isn't it?