Operator

Good day, and thank you for standing by. Welcome to Deterra Royalties’ December 2025 Half Year Results. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to turn the call over to the first speaker today, Mr. Jason Neal, Interim Chief Executive Officer. Thank you. Please go ahead.

Jason Neal
Interim MD, CEO & Director

Thank you. Good morning, and welcome to Deterra Royalties’ First Half 2026 Results Call. I’m Jason Neal, MD and CEO of Deterra, and I’m joined today by Jason Clifton, our Chief Financial Officer.

As you’re aware, I’ve been a long-standing Non-Executive Director of Deterra and has stepped into the MD and CEO role only on an interim basis as a bridge to the next leader of our company, for which we have an active search process underway. In this transitionary period, it’s been very much business as usual, and our team continues to advance various opportunities.

It is our pleasure to report a strong half, and without further delay, I’m going to hand the call to Jason Clifton to take you through the highlights and some important details. I will conclude the call before the Q&A section with some of my reflections on the half year and the strategic orientation of the company.

Jason Clifton
Chief Financial Officer

Thanks, Jason, and good morning, everyone. If you move to Page 3, you’ll see we have delivered a record first half NPAT of $87 million and a first half dividend of $0.124 per share fully franked. This

After three years of subdued activity, the global private equity industry has finally regained its momentum. Driven by a surge in deal-making and increased investor confidence, firms are now actively pursuing opportunities across diverse sectors. This resurgence is fueled by favorable economic conditions, innovative market strategies, and a renewed focus on technology-driven investments.

Key takeaways

• Dealmaking roared back in 2025 with buyout deals over $500 million surging 44 percent to exceed $1 trillion, marking the highest year on record, but the fog has lifted to reveal a fundamentally more technical and demanding terrain.
• Private equity returns now lag significantly behind public markets, with top-quartile buyouts averaging just 8 percent IRR in 2025 compared to 18 percent for the S&P 500, forcing operational value creation to shift from marketing narrative to survival imperative.
• Scale and specialization are becoming non-negotiable as funds under $500 million shrink to 13 percent of fundraising, GP consolidation doubles to $34 billion, and alternative structures like semiliquid vehicles explode to $204 billion as liquidity pressures reshape the industry.

According to McKinsey & Company’s 2026 Global Private Markets Report released in February.While dealmaking returned with force in 2025, the improved visibility has revealed a fundamentally transformed and more demanding landscape for investors and operators alike.

Buyout and growth deals larger than $500 million surged 44 percent to over $1 trillion in value, eclipsing 2021’s total to become the highest year on record for deals of this size. Deal value across all buyout and growth sizes increased 17 percent, while PE-backed exits globally surged more than 40 percent, aided by a nearly 100 percent increase in exit deal volume via IPO.

Private Equity 2026 FAQ

“Megadeals” returned dramatically in 2025. The year witnessed not only the largest PE deal in history, the announced $55 billion take-private of Electronic Arts by a syndicate of firms, but also marked the third-highest year ever for take-private activity by either total deal count or value.

A More Technical, Demanding Terrain

Yet with improved visibility comes a sobering realization: shifts in deployment, returns, value creation, and traditional fundraising, previously considered episodic, are now structural features of a maturing industry.

“The landscape is now both more technical and more demanding, even for experienced drivers,” the McKinsey team wrote. “Success on the road ahead will depend less on speed than on having the right vehicle, fit for the changed terrain, properly equipped, and driven with discipline.”

For dealmakers, assets have never been more expensive. The median private equity purchase multiple increased from 11.3x EBITDA in 2024 to 11.8x in 2025. The backlog of PE-owned companies remains at historic highs, with more than 16,000 companies globally held for more than four years, equivalent to 52 percent of total buyout-backed inventory, the highest on record and ten percentage points higher than the past five-year average.

Holding periods remain well above historical levels, with the typical portfolio company now held for more than six and a half years. Meanwhile, more than 40 percent of dry powder available for deployment has been sitting idle for the past two years, 15 percentage points higher than the five-year average.

Returns Lag Public Markets

PE returns continue to trail active public markets. In 2025, top-quartile global buyout returns averaged 8 percent on a pooled IRR basis, less than half the returns generated by the S&P 500 at 18 percent and MSCI World at 22 percent. Older buyout vintages are dragging performance, with 2015-17 vintages generating roughly 2 percent IRRs, pulling average buyout returns from 2015 to 2025 down to about 6 percent.

Without the tailwinds of multiple expansion and cheap leverage, which accounted for 59 percent of returns between 2010 and 2022, operational value creation has shifted from marketing narrative to institutional imperative. “GPs are increasingly recognizing the importance of underwriting value creation improvements as core parts of their deal theses,” the report states.

Fundraising Becomes More Selective

Core closed-end fundraising has become more competitive, selective, and time-consuming. While North American fundraising increased 8 percent year-on-year to $432 billion, Asia-Pacific fundraising plummeted 49 percent to $49 billion. European fundraising declined 41 percent to $118 billion in 2025, though largely because major funds had closed their fundraising in 2023 and 2024.

Despite challenging conditions, LP confidence remains robust. In McKinsey’s survey of 300 global LPs conducted in January 2026, about 70 percent reported plans to maintain or increase their private equity allocations in 2026, recognizing that top-quartile buyout funds have historically beaten both the S&P 500 and MSCI World indexes over the last decade with 24 percent IRR versus 15 percent and 13 percent respectively.

Different Equipment for Changed Terrain

The report identifies five critical adaptations for success in this new environment. First, scale matters more than ever. Funds raising less than $500 million now account for just 13 percent of fundraising compared with 17 percent five years ago, while funds larger than $5 billion claim significantly larger share. First-time funds have declined to their lowest level in a decade, while strategic M&A activity among the 100 largest GPs nearly doubled from $18 billion in 2024 to more than $34 billion in 2025.

Second, complexity offers opportunity. The 43 percent increase in take-private value globally, with North American take-privates rising 72 percent, reflects recognition that discounted public assets may offer more alpha than private ones. Specialist funds focusing on specific sectors appear to be outperforming generalist peers.

Third, operational value creation is now essential alpha generation. With higher purchase multiples, increased macroeconomic uncertainty, and greater equity contributions coupled with elevated interest rates, GPs must build capabilities to capture value creation potential quickly and consistently.

Fourth, AI is emerging as a transformative force. While only 6 percent of GPs currently see AI delivering high impact in their operations and investment processes, 70 percent expect high impact within three to five years. The technology is already sharpening underwriting, accelerating operational improvements, and enabling faster decision-making across the investment life cycle.

Fifth, alternative fund structures are going mainstream. US semiliquid private equity vehicles have more than doubled since 2023 to $204 billion in 2025, requiring new distribution channels, fund vehicles, marketing competencies, and heightened liquidity and risk management capabilities.

Liquidity Pressures Reshape Industry

Liquidity constraints continue reshaping private equity. Distributions to paid-in capital is now tied with multiple of invested capital as the second-most-important metric shaping LP allocation decisions. DPI as a share of total PE assets under management was just 6 percent in the 12-month period ended June 2025, compared with the 2015-19 average of 16 percent. Five-year rolling DPI hit its lowest recorded level at about 10 percent in June 2025.

This liquidity crunch drove explosive growth in PE secondaries, with traded value increasing 48 percent in 2025 and fundraising up 5 percent, as LPs seek to realize meaningful returns.

Implications for the Road Ahead

The report’s stark conclusion: private equity is increasingly less about timing the next cycle and more about clarity of position. GPs must determine whether their vehicle is built for terrain where alpha is made, purchase-price discipline is critical, leadership quality is demanded, and operational resilience is nonnegotiable.

“LPs face a sharper sorting question: Which managers are genuinely equipped to navigate these conditions, and which are still driving with maps designed for smoother roads?” the report asks. “How these questions are answered will increasingly determine which vehicles pull ahead and which struggle to stay on the road.”

Other People are Reading

Nintendo Co. is contemplating a price hike for its recently launched Switch 2 console in 2026, according to people familiar with the matter, as surging demand for memory chips driven by artificial intelligence applications drives up component costs across the tech industry.

The Kyoto-based gaming giant, which launched the Switch 2 last year at $449.99 in the U.S., has so far held firm on the console’s pricing despite earlier pressures from tariffs and other economic factors. But a Bloomberg report published this week cites sources indicating the company is now evaluating an increase due to the ongoing shortage of dynamic random-access memory (DRAM) and related semiconductors.

“Close rival Nintendo Co., which contributed to the surplus demand in 2025 after its new Switch 2 console drove storage card purchases, is also contemplating raising the price of that device in 2026, people familiar with its plans said,” the report stated. Representatives for Nintendo did not respond to requests for comment.

The potential adjustment comes just months after Nintendo President Shuntaro Furukawa addressed similar concerns during a recent earnings call with shareholders. Furukawa indicated that rising memory costs had not yet meaningfully affected the company’s profitability or prompted a price change, attributing the stability to a reluctance to react to short-term market fluctuations. However, he noted that persistent volatility could lead to a reevaluation of pricing strategy.

Industry analysts have echoed the possibility of a hike. Research firm Niko Partners predicted earlier this year that Nintendo would likely follow competitors like Sony and Microsoft in raising hardware prices, driven by tariffs, increased memory expenses and broader macroeconomic conditions. Some observers speculate the Switch 2 could move toward a $499 price point in key markets like the United States, potentially through discontinuing the base $449.99 SKU in favor of higher-tier bundles.

The Switch 2, Nintendo’s successor to the original Switch that has sold more than 152 million units since 2017, features upgrades including improved graphics, faster processing and backward compatibility with existing Switch games. It debuted as the company’s most expensive console to date, a $150 jump from the original model’s $299 launch price. Despite the premium positioning, the device has seen strong demand, contributing to robust sales momentum in major markets.

The memory crunch stems from explosive growth in AI data centers, which has created “parabolic” demand for advanced chips and squeezed global supply chains. The same pressures have reportedly prompted Sony Group Corp. to consider delaying its next-generation PlayStation console — potentially the PS6 — to 2028 or 2029.
Nintendo has previously navigated cost challenges without immediate hardware price adjustments. Last year, the company absorbed impacts from U.S. tariffs on goods from China, Japan and Vietnam without raising the Switch 2’s launch price, though some accessories saw modest increases. The console’s current official pricing remains $449.99 for the standard model and $499.99 for certain bundles, such as one including Mario Kart World, according to Nintendo’s website.

Any price increase could test consumer appetite for the hybrid portable-home console, particularly amid competition from other gaming platforms and broader economic sensitivities. Analysts warn that a hike so soon after launch risks slowing sales momentum, though Nintendo’s track record of strong first-party titles and family-friendly appeal has historically buffered such pressures.

The company has not confirmed any timeline or specifics for a potential change. Nintendo’s next major financial update is expected later this year, which may provide further clarity on how rising component costs are affecting its hardware strategy.

For now, the Switch 2 continues to lead in U.S. hardware sales charts for several months running, underscoring its popularity despite the premium entry point. Whether Nintendo opts to maintain its current pricing or pass on higher costs to consumers remains a closely watched question in the gaming industry.

Mumbai: Unrated and little-known issuers have emerged as the second largest borrowers in the debt capital market this fiscal as investor appetite for higher yield, non-rated paper has improved. Between April and January FY26, they raised ₹1.5 lakh crore, up from ₹1.06 lakh crore in the same period last year.

Unlisted and unrated bonds attract investors mainly for higher yield and structuring flexibility. Issuers increasingly prefer unrated structures to avoid procedural delays, regulatory disclosures and the electronic book provider (EBP) route required for listed bonds. Listing also mandates credit ratings, adding compliance layers and time.

In volume terms, 1,783 issuers tapped the market under the unrated or not known classification this year, marginally lower than 1,800 in the corresponding period last year, with smaller and mid-sized borrowers increasingly accessing the capital markets.

“Unrated issuances shorten timelines and keep covenants confidential,” said a banker in the debt capital markets (DCM).
Private credit deals often involve raising money at coupons of 12-20%, depending upon the credit risk. For instance, Shapoorji Pallonji’s debt paper, which involved pledging its Tata Sons holding, was priced around 19%.

By contrast, corporates in the AAA rated category raise money around 7.7% – or about a percentage point higher than the sovereign benchmark yield.

AIFs & Private Credit
Unlike mutual funds, insurance companies and banks, which face regulatory constraints on investing in unrated instruments, private credit funds and Alternative Investment Funds (AIFs) have no such restrictions.
As a result, they have become the primary buyers of these deals.

There were several unrated issues this FY. For instance, Shivam Auto raised around ₹200 crore through an unrated structure backed by private credit investors.

Large groups such as Shapoorji Pallonji and Vodafone Idea have also raised money through unrated or privately structured deals in recent months.

Bilt Graphic raised funds through unrated papers from Allianz Group, DSP, Kotak Alternate Asset Management Limited Funds, and the Trust Group. Similarly, Embassy group raised funds from 360 One and the Family group, with affiliate lenders, in the unrated space. The rise in unrated issuances is partly due to demand from yield-seeking investors. With bank lending largely focused on rated corporates, more companies are opting for privately placed debt and structured instruments.

Hits & Misses
However, the trade-off is clear- lower liquidity and higher credit risk. The extra yield, as most of these borrowers raise money offering mid-teens returns, exists for a reason. Such investments are best suited for those with the ability to assess credit risk thoroughly. Private credit funds, HNIs and family offices are investors in unrated papers and assess the risks before investing.

Most businesses, which includes modern ones, invest heavily in technology, but they rarely plan for its eventual and inevitable exit strategy.

Generally speaking, companies spend millions on the latest hardware while overlooking the critical phase when those assets reach their end.

This lack of planning creates a massive gap in the operational lifecycle of many otherwise successful global organizations.

Decisions made at the end of a device’s life carry real business risks that can impact the bottom line financially and environmentally speaking.

Understanding the journey of retired technology is essential for maintaining a secure and efficient corporate environment in 2026 and beyond.

An Overlooked Business Question

The primary focus of most IT departments is usually on procurement, installation, and the ongoing maintenance of new systems.

Consequently, the question of what happens to old hardware often remains unanswered or not even discussed, while the storage rooms remain full.

When end-of-life decisions for old technology equipment are ignored, the business exposes itself to vulnerabilities that are difficult to manage later on.

These overlooked assets represent more than just physical clutter; they are potential liabilities waiting to happen for the firm.

A proactive approach to technology retirement ensures that every piece of hardware is accounted for during its transition, and by doing it this way, future problems are prevented.

The Business Risks of Poor IT Asset Disposal

Poor IT asset disposal practices can lead to devastating data breaches and heavy regulatory fines for the organization as well as sustainability issues with customers.

If a hard drive containing sensitive corporate data is simply thrown away, the security risk could be immense for the company and its clientele.

Reputational damage from a single leaked document can haunt a company for many years after the initial incident.

Furthermore, unmanaged assets lead to financial loss through wasted storage space and unnecessary insurance costs that have to be covered by the business.

Failing to track retired equipment can lead to losing control over the very data that defines your competitive market edge, putting your company at risk once again.

IT Asset Disposition as an Operational Discipline

Forward-thinking companies are now treating asset retirement with the same rigor and discipline as they treat new procurement.

Strategic leaders recognize that global itad services are a vital component of a comprehensive corporate risk management framework.

By formalizing the disposal process, businesses can ensure that security protocols are followed consistently across all global locations.

This operational discipline shifts the focus from simple trash removal to a sophisticated and highly secure workflow.

ITAD belongs in board-level risk discussions because it directly impacts the long-term survival and health of the enterprise.

Financial Recovery Through Asset Reuse and Remarketing

Value recovery, reuse, and remarketing from surplus and retired equipment is a major benefit of a well-executed IT lifecycle management plan.

Many devices that are at the point of being retired still hold significant market value even if they no longer meet the specific needs of your organization.

Working with experts allows businesses to remarket these assets and reclaim at least a portion of their original capital investment.

This process of remarketing and reuse effectively reduces the total cost of ownership for each and every piece of technology purchased by the company.

Financial recovery turns an expensive disposal problem into a potential source of unexpected revenue for the IT budget, and then we have not even touched the subject of sustainability.

Compliance, Audits, and Accountability

Meeting data protection and environmental regulations is a non-negotiable requirement for any modern business operating in today’s market.

Professional international data center decommissioning services provide the necessary expertise to navigate complex local and global legal standards.

These services ensure that hardware is recycled responsibly and that all toxic components are handled with care.

Documentation and reporting are essential for proving accountability during internal audits or external government inspections of your records.

A certified paper trail protects the company by demonstrating a commitment to ethical and legal disposal practices everywhere.

Aligning IT Lifecycle Strategy with Business Growth

A robust IT lifecycle strategy supports major business milestones such as mergers, large-scale upgrades, and digital transformation initiatives.

As companies grow, they must ensure scalability without creating dangerous security gaps in their aging hardware infrastructure.

When two organizations merge, the consolidation of IT assets requires a clear plan for disposing of redundant systems.

Proper decommissioning allows for a smooth transition to newer platforms while maintaining the highest level of data integrity.

Growth in a business should never come at the expense of security when dealing with the physical layer of your technology.

Conclusion: Smarter End-of-Life Decisions Build Stronger Businesses

Responsible IT lifecycle planning is a leadership issue that requires attention from the very top of the organization.

Smarter decisions regarding end-of-life technology help build stronger, more resilient businesses that can withstand modern security threats.

By integrating global itad services into your operations, you protect your data, your reputation, and your financial health.

Every piece of retired hardware should be viewed as a final opportunity to demonstrate corporate responsibility and excellence.

Making the right choice today ensures that your technology legacy remains a positive asset for the future.