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- [00:01]
Marian Webb
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- [01:01]
Maggie Finari
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- [01:33]
Marian Webb
Bloomberg Audio Studios, Podcasts, Radio News.
- [01:38]
Maggie Finari
I think that's a little bit of SpaceX's history. So when they went out and said we're going to go out and do reusable rockets, and NASA said that was impossible, they went out and did that. So there was a bit of skepticism at the time. And then they built a fantastic launch business. And they said, okay, we're going to go out and we're going to build Starlink. And then there was a lot of skepticism around whether that would be successful or not. Could you get the hardware and the software to work together? And they absolutely did that. And now you've got a large part of the value coming through orbital data centers. But there's a recognition here that this is a very strong company with a huge history in hardware and R and D. And actually that is a very large TAM going forward, and we'll continue to see that. But I think that's just really SpaceX's history of having a very ambitious view on what they're going to create which no one has ever done before. And what we've seen is they've been able to do that time after time.
- [02:42]
Marian Webb
Welcome to MarineTalks Money, the podcast in which people who know the markets explain the markets. I'm Marian sums up Webb and this week I am speaking with Maggie Finari, CEO of J. Rothschild Capital Management, which manages the 4.5 billion billion pound RIT Capital Partners. Now RIT has long been one of the most popular multi asset funds for individual investors in the uk but it's been through a longish period of being slightly off the boil. Look over the last five years you see the share price is actually slightly down at a time when The S&P 500 has gone up around 70%. However, things have picked up a little recently under our guest. The shares are pretty much flat so far year to date, but around 18% over the last year or so somewhere else in line with the S&P 500. However, that is not as we are going on to discuss discuss strictly the correct comparison because RIT is not just a listed equity vehicle. It also has private companies, credit and real assets and it is in the private portfolio in particular where there is a lot going on. It currently offers exposure to some of the year's Most talked about IPO candidates and completed IPOs including SpaceX, Anthropic, Stripe, OpenAI and Databricks. So we are very very glad to have Maggie on to hear about both the opportunities and the risks for trustees in those IPOs and of course in the rest of the portfolio. Maggie, welcome to Marion Talks Money.
- [04:04]
Maggie Finari
Great, thank you Marian. Delighted to be here.
- [04:06]
Marian Webb
Okay, I've slightly summed up what RIT do, but we will have quite a lot of non UK listeners who might not know the trust as well as some of us do. So is there anything I missed, anything you'd like to explain about exactly what it is that you do?
- [04:19]
Maggie Finari
We've been around for more than 50 years really started as the Rothschild family office under Jacob Rothschild in the early, in the early 70s and we became a listed investment vehicle in in 1988. So more than 35, more than 35 years ago allowing people to invest along
- [04:37]
Marian Webb
alongside us and it's basically it's a multi asset portfolio. I mean as I said, this is not just listed equities, this is everything under the sun and the idea is to provide regular long term returns and in the main to be, to be capital protective above all else. Is that right?
- [04:55]
Maggie Finari
It's a combination of the two. We clearly want to Preserve capital, but a large part of the mandate because it does have equity within it, close to 70%. It's really designed to capture growth while at the same time managing for risk. We would largely do that through, as you noted, our hedge fund program, our real assets. So as a result, over the last 35 years or so we've generated a return of 10.6% compounded. We've been able to capture 71% of the market upside over that time and limited the downside capture to about 41%.
- [05:32]
Marian Webb
Well, why don't we start off talking about the exciting bit, talking about the private part of the portfolio, or actually the public part of the portfolio that was private until a couple of weeks ago. So why don't we start with your holding in SpaceX? You've had a holding in that for a while, right?
- [05:48]
Maggie Finari
Yes, SpaceX was actually the first investment I made in our privates portfolio when I joined about two years ago. We could see real compounding value in the business through starlink and the fact that the business had an incredible moat behind it. And we were delighted to see them IPO just a few weeks ago quite successfully and we just think there's a lot of long term value yet to come. The company's definitely also changed in the last two years. As we've seen more recently. They're really looking to expand into the compute space, another very large market for the business. So we think that this is a long term compound and now it's also in the public markets as well.
- [06:31]
Marian Webb
It feels to a lot of people in the commentary around SpaceX that the risk is actually in that AI bit and the compute space and that the some of the businesses are fairly easy to understand. The space bit itself, everyone kind of grasped. The satellite bit, everyone kind of grasped the Internet bit, everyone kind of grasped. But the AI bit, that is where most of the valuation is focused. Right. That's where the expectations really come from. And that seems like the riskiest bit in terms the competition out there and the lack of understanding who are going to be the long term winners. But from what you're saying, it sounds like you're very happy with the valuation at this level and you're going to be a long term holder regardless.
- [07:10]
Maggie Finari
Yeah, we are pleased with the valuation and I think that's a little bit of SpaceX's history. So when they went out and said we're going to go out and do reusable rockets and NASA said that was impossible, they went out and did that. So there was a bit of skepticism at the time. And then they built a fantastic launch business and they said, okay, we're going to go out and we're going to build Starlink. And then there was a lot of skepticism around whether that would be successful or not. Could you get the hardware and the software to work together? And they absolutely did that. And now you've got a large part of the value coming through orbital data centers. But there's a recognition here that this is a very strong company with a huge history in hardware and R and D. And actually that is a very large TAM going forward and we'll continue to see that. But I think that's just really SpaceX's history of having a very ambitious view on what they're going to create, which no one has ever done before. And what we've seen is they've been able to do that time after time.
- [08:08]
Marian Webb
But then you have also in the portfolio companies that you might consider to be competitors to a degree in the AI space, anthropic, OpenAI, etc.
- [08:19]
Maggie Finari
I would say when I look, look at that and when I look at our exposure to AI, we were very deliberate in the way that we wanted to get that exposure for our shareholders. We decided that we wanted to be in the companies that are actually creating that use for AI. So we didn't invest necessarily in semiconductors in the public space. And we also just given our access and our ability to do private investments, wanted to deliver something to our shareholders. And investments, as you just noted, that can't be easily accessed as a private or public markets investor. And where we wanted to invest was in a very diversified way. So we wanted to be able to invest in the AI frontier model. So our largest exposure there is anthropic. Then we thought about the infrastructure space, so we invested in databricks. And then as we thought about the application layer, we also have good exposure to the likes of Ramp and Stripe. So when we look across, I think about our AI exposure as being diversified across the AI stack and what we've defined as category leaders. So we've been really deliberate and in the number of investments we've made, which as we've noted is just a handful of investments over the two years, but who we think are going to be the long term winners.
- [09:30]
Marian Webb
And are you still expecting OpenAI to lift relatively soon? Because at one point it was going to be this year, but now it looks like it's pushed out a bit.
- [09:39]
Maggie Finari
Yeah, I mean, we're reading the headlines the same as anyone else, you know, from, from our perspective, they'll go public when they're, when they're ready. And that's the same for anthropics or databricks. From our perspective as well, given we're long term holders, we're happy if the company is compounding in the private space or in the listed space. From our perspective that's still generating very strong returns for our shareholders.
- [10:05]
Marian Webb
And being in the private space in general, what percentage of the portfolio is it at the moment?
- [10:09]
Maggie Finari
It's about 33% of the portfolio today
- [10:14]
Marian Webb
it's quite long term having this private portfolio. And I think you, like a lot of other people, believe that we've now moved into a time when the majority of the growth of exciting companies is going to happen off market. So if you want to have access to them, you have to be in the private space, not just the public.
- [10:31]
Maggie Finari
Yeah, that's right. We take the view that a lot of that innovation is happening in the private space and we've seen a lot of value capture. So we want to be able to capture that value in the private space and then be able to compound it in the, in the public space. But you see a lot of value that's being created, whether it's SpaceX which stayed private for close to 25 years, or Anthropic and OpenAI and others which have seen this massive growth over the last couple of years, 45 billion or so in run rate revenues. You want to be able to capture those opportunities early. And that's what we've looked to do.
- [11:05]
Marian Webb
And when you look at this dynamic over the last 15 years or so, what we have seen this huge growth in, in private equity effectively and in private credit, which has been the big driver of the privates that you and quite a few of the other investment trusts in the UK have started to take big positions in. Do you see that continuing or do you look at it and say, well that was in part a function of super low interest rates and the capital that became available because of that, and maybe particularly with these big IPOs might mark a turning point as people turn back to the public markets. That being more old fashioned but high interest rate way to raise capital when interest rates are normal.
- [11:45]
Maggie Finari
So just to clarify, our privates exposure is primarily in that more private equity space. So private equity growth venture in that space. We don't own any private credit, just to be clear. And what we think about it is we'll think about private investments in terms of decades. Everything goes through a cycle. So as a result we think the right allocation towards Private assets in our portfolio is anywhere between 25 to a third of our portfolio. And we're really looking to capture and identify companies and founders that are going to create that next set of generational companies. So we think as a long term thesis, private investing is a very core part of the portfolio and that's really where a lot of that growth happens.
- [12:34]
Marian Webb
And in the portfolio, again, let's stick with the private part. Presumably you're still buying. There are smaller names than we all know, these great big names and it's interesting and exciting to see them in portfolios that we can all access. But what about lower down in this portfolio? What kind of companies are there?
- [12:49]
Maggie Finari
Companies like Motive, which has also recently filed for an ipo or in companies like Kraken as well. But what I would say is over time our portfolios, we look through both our funds exposure and our direct exposure. What you'll really see is a concentration in our portfolio. Our top 10 holdings form 85% of our directs exposure. At the end of the day, that's largely in the great names that we've been speaking about. Companies like databricks, companies like anthropic, companies like Epic Systems, which is a fabulous healthcare IT services company that was established in the early 1970s, which really has a very strong dominant share in terms of providing software for hospitals. So we've got a very strong suite of companies that just continue to compound growth. But we tend to focus on later stage companies and what we view to be those category winners and in those winners.
- [13:51]
Marian Webb
I just want to ask before we move on from those, I mean the big worry at the moment in the market is the level of CapEx and the sustainability or not of that level of investment. Does that concern you?
- [14:02]
Maggie Finari
So we've been watching that very carefully like everyone else. What I would say is we have been consistently underweight, if you will, the Mag 7 from that perspective. But there is a level of CapEx build out that is necessary. And if we think about well, what is the TAM or what's the potential of AI, we definitely think that's a very long term structural theme and you do need the compute going forward. So the way we think about AI is people say AI is a new form or what software is going to look like in the future. The software market is a $1 trillion TAM. We think that the evolution of AI is AI agents in that second half of the story where AI agents are going to be able to do the work directly. While software has actually over the last decade plus has really looked to create efficiencies in the way that we work. And that next iteration with AI is the ability for AI agents to do that work directly. And that's a 65 or $60 trillion TAM. So as a result of that, what you see is a very significant market opportunity for AI. But you need to build out the compute to be able to do that.
- [15:18]
Marian Webb
TAM being total addressable market for the non professionals listening. Yes, thank you.
- [15:31]
Maggie Finari
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- [16:02]
Marian Webb
Think again.
- [16:03]
Maggie Finari
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- [17:07]
Marian Webb
Right, let's look at the rest of the portfolio. So the private super interesting. Lots of exciting stuff going on in there, but still only 3030 odd percent of the portfolio. Much larger part is the listed equity area where interestingly you have been less overweight the US than most portfolios and you're definitely of the view that the age of US exceptionalism has come to an end and that one should be more exposed elsewhere. So you've got quite a lot of Japan, quite a lot of Europe, et cetera.
- [17:41]
Maggie Finari
Yeah, no, that is right. I wouldn't say it's necessarily over from that perspective, we do think, as we've noted, some of the most innovative companies in the world continue to exist in the U.S. but what we have seen going back to the commentary around what's taken place in the last decade, is that the US Was really viewed as the only market where you could see a lot of growth. And what we're seeing today, as we've seen, is in our view, the world order has changed from that into what we refer to as a more multipolar world. So what does that mean? It means that governments and countries really need to focus on their own sovereignty. They need to focus on building out and securing their own supply chains, their own AI infrastructure, their own maritime security. And as a result, that's creating a lot of growth in those countries that we haven't seen before. And we wanted to be there quite early from that perspective. So we started adding to emerging markets, we started adding to Europe, we started adding to our commodities exposure, really, with the view being that many of those markets looked very cheap from a multiples perspective, really, because that growth was yet to start to be priced in. And we believe that that is coming. And we've also seen countries like Germany and others indicate that they're willing to spend more fiscally. And we just think you're going to see more of that going back to the view that from our perspective, the US and other countries around the world have made it very clear that they are going to focus on their own sovereignty.
- [19:11]
Marian Webb
So just be clear, you've still got 35% of this equity portfolio in the U.S. right? It's not the out altogether. And then I'm thinking of the less 25% in Europe, 22% Asia, 17% Japan. So when you say emerging markets, do you really mean Asia?
- [19:26]
Maggie Finari
So we mean emerging markets. So we do. That does include a component of China to it, and it also includes a component of Brazil and so on.
- [19:37]
Marian Webb
And when you talk about that, are you investing in Brazil in individual companies or is that where you're buying other funds?
- [19:45]
Maggie Finari
So we'll typically do that through a fund manager who's very specialized in those markets. And we believe that if we're able to, which we are able to access some of the best managers in the world, they will be able to identify those alpha opportunities directly.
- [20:01]
Marian Webb
Okay, that does add to costs.
- [20:03]
Maggie Finari
It does add to cost, but that's why we're very selective. They are only incentivized if they make money for us. So you do create that alignment from that perspective.
- [20:12]
Marian Webb
So emerging markets will mainly be via other Fund managers, Japan also via other fund managers.
- [20:17]
Maggie Finari
Yes, that's right. We've been with some of our managers for almost 20 years and they've had very strong, strong performance from that perspective.
- [20:25]
Marian Webb
And can retail investors look and see which other managers you're using?
- [20:29]
Maggie Finari
Yes, that's all disclosed in our annual report.
- [20:32]
Marian Webb
So where is it that you are buying individual equities? Because there is a large part that is direct investing.
- [20:38]
Maggie Finari
Right.
- [20:38]
Marian Webb
Is that mainly America? Uk?
- [20:41]
Maggie Finari
It would be largely. Yes, the UK and the US So those are markets that we know very well that we're able to leverage from our network and also that specialist expertise that we have in house. And then we'll look to engage with, with managers where we want specialized expertise. So take biotech. We'll use a manager or two for the biotech space because I don't want to go out and hire 30 PhDs to help me figure out, to help me figure out biotech. But again, we are cost conscious from that perspective. And they only generate or earn their fee if they, if, if they've been able to make money.
- [21:16]
Marian Webb
Okay, so what do you earn directly? What are the top two or three equities? Let's talk about those.
- [21:22]
Maggie Finari
So one of the companies we've been excited about and have written in our annual report is a European listed company called Gelderma. This example speaks to a little bit about the way we utilize our network. So Gelderma was a private company. It was owned by EQT for a number of years. This was a company that we had the opportunity to get to know while it was a private company. And then we were able to participate on the IPO because we are a permanent capital vehicle with a view being we are long term investors, we received a very good allocation on the ipo and we've been able to continue to build on that position over the last couple of years as we've gained increasingly more conviction in and around it. And that's, that's a little bit of the approach that we like to take with our, with our public portfolio.
- [22:08]
Marian Webb
And when we were talking earlier about where you have equity exposure, you were saying that one of the things that drove you to diversify more away from the US was valuations. Because some of these markets look phenomenally true, cheap. You know, there was a time when Japan looked remarkably cheap and Europe looked remarkably cheap. And they're still obviously at a discount to the US but much more expensive than they were. When you look around the world, where is it that you see value in overall markets at the moment?
- [22:35]
Maggie Finari
We see value in a lot of different places because what we've seen more recently is a very narrow market market rally. This year markets are up, but it's really been in one or two sectors, so call it energy, call it semiconductors. And there have been a lot of overlooked areas of the market and more of those, as you refer to in terms of more of those quality names and a few different areas of the market where you just haven't seen a big rally. So from that perspective, there's been a lot more opportunity than the double digit returns in some of the indices might otherwise suggest. We do expect a broadening of the market to come through and we think that other you'll see a bit of the catch up, similar to what we saw last year where other markets like Europe had better returns than the US as did emerging markets.
- [23:21]
Marian Webb
Yeah. What about the uk?
- [23:24]
Maggie Finari
We are underweight the UK today really, and we've seen other opportunities elsewhere.
- [23:31]
Marian Webb
Let's look at the other part of the portfolio that people I think will really be much less familiar with, which you call uncorrelated strategies, which is bonds, obviously government bonds, other credit and real assets. Your bond holdings are really remarkably low, right? Government bond holdings, yeah.
- [23:48]
Maggie Finari
We've traditionally had a lower weighting toward bonds, really with that part of uncorrelated strategies really focused on hedge funds. And again, that's really just the way that we look at the portfolio construction going back to resilience. Our hedge fund program within uncorrelated strategies is really designed to be that cushion or ballast when markets are down. So what you would have seen last year when we had a macro event in terms of the wall of tariffs that came up in the United states or in Q1 of this year where you had the US Iran war. So again, a different event, but quite significant on the markets from a geopolitical perspective, that part of our portfolio produced positive returns. And as a result, in Q1 last year, in Q1 this year, while markets were down, our portfolio was up. And we just want to be able to invest in those types of funds that have a very low or uncorrelated return to market. So whether it's a macro fund or a quant fund or an equity neutral fund, we tend to invest in a few of those managers really to give us that ballast on returns.
- [24:56]
Marian Webb
And how much of the portfolio is that? Because there's always this problem, isn't it, when you have something in your portfolio that's designed to be the ballast or the defensive part in that you want to have enough to make a difference, but not so much that your overall performance gets dragged down in the good times.
- [25:10]
Maggie Finari
Yeah. So that part of our portfolio is just a bit over 10%. And then we combine that with our gold, our gold holdings that are roughly in that 4 to 5% range. And then we have a bit of gilts and so on. So call it 20% overall.
- [25:26]
Marian Webb
Okay, let's look at the gold bet. We've got a lot of gold bugs listening to this podcast. How do you land on 4 to 5%? Is that a steady allocation or does it go up and down depending on how you're feeling? And why 4% or 5%? Why not 10%? Why not 3%?
- [25:42]
Maggie Finari
So we just view it as a core part of our portfolio construction. So really, it is a diversifier within the portfolio. It's also a strong diversifier. We have a lot of US Dollar exposure as well, so it serves multiple functions in the portfolio. And what we found through our risk modeling over time is having that allocation in that 5% range typically is a good range for us. It could go anywhere from 4 to 7%. But we try not to be too specific on what we think the gold price is going to be. What we're using it for is a diversifier within our portfolio, and that's been our target range for a long time now.
- [26:18]
Marian Webb
Okay, and what do you think is happening in the gold price at the moment? We had this very exciting moment when it went above $5,000 and we all got terribly excited. And then down it came again, slipping under 4,000 and all over the place at the moment. And people say gold is not behaving like gold is supposed to behave. So all the things that you've just described it's supposed to do in your portfolio, it hasn't been doing.
- [26:41]
Maggie Finari
So I think there is, as you noted, you want to be a bit tactical. So we did do some profit taking in the earlier part of the year, but again, that was also because it went above a specific threshold from a sizing perspective within. Within our portfolio. But gold is still, well, you know, it's still, I think this morning above 4,000. That is very good price for gold. So at the end of the day, one can expect there to be some volatility, but we're not looking at it day to day. We're looking at it over the long term.
- [27:11]
Marian Webb
Yeah. So. But do you think there's anything particular driving this volatility? I mean, a lot of people who we talk to say it isn't the ballast in my portfolio that I Wanted. It acts like a liquidity driven financialized asset. And that's not what I wanted.
- [27:26]
Maggie Finari
I mean, I think part of it is just central bank buying. So you had an unexpected event with the US Iran war and you needed to buy oil and build up reserves and at higher prices. And clearly that's become a competition to being able to buy gold as well. So I think you've had a pretty significant geopolitical event that was unexpected in and around oil prices and that's necessitated a priority around oil versus gold at the moment by central banks.
- [27:54]
Marian Webb
What are you worried about at the moment? Those people in the market are really worried about something. What's bothering you?
- [28:02]
Maggie Finari
If I could narrow it down to one single risk, it's really inflation. As we think about higher oil prices, some of the supply chain disruptions we've seen that perhaps have gone on for a bit longer than anyone would have anticipated. And then you've also got higher spending on CapEx, as we spoke about earlier. So the real question on our minds is inflation, whether that inflation is transitory, whether the US will be able to really get inflation back down to 2%. What are the implications on bond yields? So we're also watching from that perspective, oil prices to see if they start to gradually come down, which does help with the inflation piece. But that would be the risk that we're looking at. That kind of defines many of the other risks and many of the other things that people are speaking about in the market today.
- [28:51]
Marian Webb
Yeah, I mean, it seems like rising inflation would be a risk attached to what we started part of this conversation with, which is the renationalization of various supply chains, et cetera. That's automatically inflationary, right?
- [29:04]
Maggie Finari
It is to a degree, but also creates growth in those markets. So that can also be offset by productivity gains. So you could have AI productivity gains come through, but you can have industrial or more cyclical productivity gains come through. That also helps to offset some of that inflation and then lower oil prices. So there are a few pieces that go into it. So we're looking at the data and just looking to ensure that our portfolio is kind of able to push through those various macro events.
- [29:36]
Marian Webb
Yeah, and we're wondering about oil prices because while it would make sense that they would now maybe fall gradually from here, there is a part of the equation that we're not talking about that much, which is the rebuilding of reserves in the US and in China. So over this emergency period, those reserves, which have built up over decades, have been run down over months and now need to be built up again, which I would have thought, again, I'm not an expert in the oil area, but I would have thought that that would provide a pretty firm floor under oil prices.
- [30:09]
Maggie Finari
So. Yeah, so that's right. It's an area in and around that maybe not only the US or China, it could be that other countries are also looking to do the same. But it could also provide a gateway, as we've seen, for altern energy sources and those sectors, as we've also seen, start to rally as people look to not only oil, but other areas and sources of energy going forward, which could also then be deflationary from that perspective.
- [30:35]
Marian Webb
Yeah. Does the trust have exposure in the energy space in oil or in renewables?
- [30:40]
Maggie Finari
We don't have exposure to renewables. Early on in, just before the Iran war started, we had been thinking about energy and energy security. We did put on an oil position that did very well. So as a result, we look to sell that position. But we are thinking longer term around energy security. Going back to our European sovereignty theme,
- [31:01]
Marian Webb
we haven't really talked about Japan. You've got quite a lot of the portfolio in that, right? That's 16, 17%.
- [31:06]
Maggie Finari
16% or 17%. I think within our quoted equities portfolio and just more broadly across our entire portfolio, that would be in the single digits.
- [31:16]
Marian Webb
But it's still, it's fairly interesting what's driving that position. I mean, it was as a few years ago that would have been priced. It's ridiculously cheap market. Japan is still good value relative to some other markets, but you wouldn't say it was cheap.
- [31:30]
Maggie Finari
Now if I take a step back, we've been investors in Japan for about 20 years as a firm really with a view that was quite focused on the corporate governance theme. With the view being that the government insisted that companies in Japan look to have a certain level of ROE and really look to drive those reforms through. And we believe that that trend has just continued in that market. I think what you've also seen, similar to other countries like Korea and or the US is in Japan. The market's done very well. But what you've also seen is anything that was linked to semiconductors or semiconductor components has done very well in Japan, while you can still see value in the more traditional sectors. So again, if you look across the sectors, not all sectors in Japan said differently have been growing at the same rate. So we do see a lot of value there.
- [32:22]
Marian Webb
Thank you. Maggie, thanks for joining us.
- [32:23]
Maggie Finari
Perfect. Thank you so much.
- [32:28]
Marian Webb
Thanks for listening to this week's Maren talks money. If you like our show, rate, review and subscribe wherever you listen to podcasts and keep sending questions or comments to marinmoneyloomburg.net you can also follow me and John on Twitter OR X. I'm MarionSW and John is Johnstapek. This episode was hosted by me Marin's Onset Web. It was produced by Samisadi Moses and our Jennifer Seeley. Now designed by Blake Maples and Aaron Casper. And special thanks of course to Maggie for. The Bloomberg Sustainable Business Summit Returns to Singapore on July 22. Our 5th annual Asia Pacific Summit will explore how business and finance leaders are shaping the next phase of globalization by strengthening resilience and driving a multi speed energy transition across Asia's diverse markets. Join us for solutions driven discussions and networking opportunities. Thank you to our Summit advisor, Bangkok bank. Learn more at bloomberglive.com SBS-singapore all new drinks are now at McDonald's with refreshers like the Strawberry Watermelon Refresher and the Mango Pineapple Refresher with Popping Boba to crafted sodas like the Sprite Berry Blast with berry flavors and cold foam. Who knew ice cold drinks could be so fire six all new drinks are here now at McDonald's.
- [33:59]
Maggie Finari
Refreshers contain caffeine.