Slide 1: Qualitas FY23 Results
Qualitas FY23 Results (ASX:QAL) 23 August 2023
Slide 2: Acknowledgement of Country
Acknowledgement of Country Qualitas acknowledges the Traditional Custodians of country throughout Australia and their ongoing connection to land, sea, and community. We pay our respect to their Elders past and present. JOURNEY OF GROWTH BY ALYSHA MENZEL 2
Slide 3: Agenda and presenters
Agenda and presenters 1 2 3 4 A Market Outlook Funds FY23 Outlook and FY23 Highlights Management Financial Results and Guidance Appendices ANDREW SCHWARTZ KATHLEEN YEUNG PHILIP DOWMAN GROUP MANAGING GLOBAL HEAD OF CHIEF DIRECTOR CORPORATE FINANCIAL OFFICER AND CO-FOUNDER DEVELOPMENT Important Note:
Slide 4: FY23 – Successful execution to IPO strategy
FY23 – Successful execution to IPO strategy FY23 saw substantial top-line growth and margin Private credit and BTR continues to attract sticky expansion - increasing scalability due to significant FUM institutional capital – a growth enabler and accelerator and deployment growth Building brand and r
Slide 5: Market Outlook and FY23 Highlights
Market Outlook and FY23 Highlights
Slide 6: CRE private credit – attracting large scale capital into expanding addressable market
CRE private credit – attracting large scale capital into expanding addressable market REAL ESTATE PRIVATE CREDIT - ATTRACTING SUBSTANTIAL OBSERVED REDUCTION IN SUPPLY OF CREDIT FROM • Historically under allocated INSTITUTIONAL CAPITAL TRADITIONAL FINANCIERS by investors Global real estate private cr
Slide 7: Short tenured credit portfolio enabling agility in funds management platform
Short tenured credit portfolio enabling agility in funds management platform, with skillset to traverse the capital stack and CRE sub-segments – focus on residential private credit as it is anticipated to remain resilient WE’VE SEEN THIS BEFORE – GROWTH UNDERPINNED BY SUPPLY SHORTAGE SUPPLY SHORTAGE
Slide 8: FY23 – Strong execution of strategy reflected in a step change of growth in FUM and deployment
FY23 – Strong execution of strategy reflected in a step change of growth in FUM and deployment RESULTS HIGHLIGHTS 30-Jun-2023 23-Aug-2023 Net capital Record Pool of potential commitment increase $73m embedded $6.1bn $7.5bn $3.0bn and unrecognised FUM1 FUM1 $1.8bn FY23 deployment Avg. gross investmen
Slide 9: +88% in normalised NPBT and +11% funds management EBITDA margin excluding performance fees
+88% in normalised NPBT and +11% funds management EBITDA margin excluding performance fees illustrating platform growth and scale efficiencies RESULTS HIGHLIGHTS $44.1m $15.9m $26.8m 46.7% $31.1m $192m Funds management Principal income Funds management Funds management Normalised NPBT1 Cash on balan
Slide 10: Execution of strategic priorities – $2.3bn of dry powder, investor conviction
Execution of strategic priorities –$2.3bn of dry powder, investor conviction in funds management platform • FUM increased by 77% on FY22 reaching FUM ($M) $7.5bn as at 23-Aug-23 driven by six substantial institutional mandates totalling $3.2bn. FUM includes $700m 37% / 38% (ADIA1) and $750m • Second
Slide 11: Execution of strategic priorities – selective and disciplined deployment
Execution of strategic priorities – selective and disciplined deployment • FY23 capital deployment of $3bn (+55% on FY22): DEPLOYMENT ($M) – 54% in total return credit. 2,995 – Extensive due diligence with a focus on quality 49% sponsors and investments structured for risk FY10 – FY23 CAGR% 55% miti
Slide 12: Funds Management
Management @) QUALITAS
Slide 13: Qualitas overview
Qualitas overview Funds management platform is well-positioned in the current economic environment and is set-up for long term success Qualitas Asset light alternative CRE investment manager of third-party capital Integrating ESG standards in new product development (low carbon focused debt fund) an
Slide 14: Qualitas’ CRE platform is a partner of choice for investors
Qualitas’ CRE platform is a partner of choice for investors Proven track record of attracting institutional capital across all market cycles • FUM from institutional investors increased from INVESTOR COMPOSITION 69% in FY22 to 76% as at 30-Jun-2023, and further AS OF 30 JUNE 2023 AS OF 23 AUGUST 202
Slide 15: Long duration capital with in-built platform protections to minimise redemption risk
Long duration capital with in-built platform protections to minimise redemption risk Substantial long-term capital in closed-ended Fund structures enhances earnings stability through periods of volatility and current dry powder provides significant earnings opportunity to drive funds management fee
Slide 16: Our ESG vision and progress
Our ESG vision and progress ESG VISION Leveraging the Qualitas platform and position as one of Delivering real impact through our social and Continued review and refinement of our the leading alternative CRE financiers to help Australia community programs including charitable governance framework to
Slide 17: FY23 Financial Results
FY23 Financial Results QUALITAS
Slide 18: Group earnings
Group earnings Quality of earnings continues to improve as the platform scales • Statutory NPAT of $22.5m, increased by 19% on FY22 reflecting: % – Funds management fee growth driven by P&L BREAKDOWN ($THOUSANDS) FY22 FY23 (YOY) strong growth in FUM and deployment. Net funds management revenue1 13,9
Slide 19: Funds management
Funds management Meaningful growth in recurring funds management earnings • Base funds management fee and transaction fee % growth of 24% and 29% driven by: P&L BREAKDOWN ($THOUSANDS) FY22 FY23 (YOY) – 49% increase in average invested FUM. Base funds management fees 26,117 32,343 24% – BMF and TF as
Slide 20: Principal income and Arch Finance
Principal income and Arch Finance Tactical utilisation of balance sheet capital driving substantial growth in principal income % • Gross total $427m3 deployed for underwriting PRINCIPAL INCOME ($THOUSANDS) FY22 FY23 13 transactions across private credit with (YOY) $333m recycled to fund investments:
Slide 21: Operating performance
Operating performance Step change in operational efficiency as invested FUM growth accelerates • Average invested FUM 4-year CAGR of 32%. PERFORMANCE METRICS – INCREASING ECONOMIES OF SCALE • Further upside to be realised for funds 2.4% management fees in future periods as: – 49% of FY23 deployment
Slide 22: Balance sheet
Balance sheet Resilient balance sheet well-positioned for growth across market cycles QUALITAS GROUP BALANCE SHEET ($THOUSANDS) FY22 FY23 • Loan receivables $87m with additional $7m undrawn commitment1,total $94m Assets commitment in underwriting positions are Cash and cash equivalents 309,010 192,3
Slide 23: Outlook and Guidance
Outlook and Guidance QUALITAS
Slide 24: Qualitas is well positioned moving into FY24 with meaningful dry powder
Qualitas is well positioned moving into FY24 with meaningful dry powder, significant sources of capital and increasing efficiency • FY24 guidance considerations: FY24 GUIDANCE – Substantial dry powder and focus on asset and sponsor quality. Deployment quantum and timing a key variable of the guidanc
Slide 25: Thank you
Thank you MELBOURNE OFFICE SYDNEY OFFICE BRISBANE OFFICE Level 38, 120 Collins Street, Governor Macquarie Tower Level 14, 167 Eagle Street, Melbourne VIC 3000 Level 27, 1 Farrer Place, Brisbane QLD 4000 Sydney NSW 2000 QAL INVESTOR ENQUIRES P: +61 3 9612 3939 E: investor.relations@qualitas.com.au qu
Slide 26: Disclaimer
Disclaimer This presentation has been prepared by and its sole responsibility of Qualitas Limited (ACN 655 057 588). To the maximum extent permitted by law, the information contained in this presentation is given without any liability whatsoever to Qualitas Limited, any of its related entities, or Q
Slide 27: Appendix 1
Appendix 1 Qualitas Real Estate Income Fund (ASX:QRI)
Slide 28: QRI – the only mortgage real estate investment trust (MREIT) listed on the ASX
QRI – the only mortgage real estate investment trust (MREIT) listed on the ASX TARGET RETURN – RBA CASH RATE + 5.0% TO 6.5% UNIQUE PROPOSITION ON THE ASX Delivered attractive risk-adjusted returns1 9.90% 9.71% Attractive positive inflation adjusted returns Jun-23 annualised Jun-23 net Monthly distri
Slide 29: Appendix 2 – Segment information
Appendix 2 Segment information
Slide 30: Diversified product and investment profile as at 30 June 2023
Diversified product and investment profile as at 30 June 2023 FUNDS UNDER MANAGEMENT1 FUNDS UNDER MANAGEMENT UNDERLYING GEOGRAPHIC UNDERLYING SECTOR (BY COMMITTED FUM) RISK ALLOCATION2 EXPOSURE2 EXPOSURE2 (BY INVESTED FUM) (BY INVESTED FUM) (BY INVESTED FUM) 7% 8% 16% 27% 7% 1% 16% 37% 11% 17% 5% 10
Slide 31: Appendix 3 – FUM metrics
Appendix 3 FUM metrics
Slide 32: FUM overview as at June 2023
FUM overview as at 30 June 2023 FUND NAME STRATEGY INVESTMENT TYPE FUM EXPIRY1 QRI (ASX listed) Senior debt / mezzanine $601m Perpetual QSDF Senior debt – diverse $703m Perpetual QPICF Income Senior debt – diverse $220m May-31 CREDIT FUNDS Senior Debt SMA Senior debt – diverse $208m Perpetual Arch F
Slide 33: FUM metrics
FUM metrics Growth in deployment accelerates the conversion of FUM not yet earning fees to fee earning FUM and invested FUM FUM NOT YET EARNING FEES – DRY INVESTED FUM – CAPITAL DRAWN POWDER Invested FUM attracts the highest funds management revenue $2,265m 178% $3,868m $1,113m 34% $815m $2,884m FY2
Slide 34: Credit funds – FUM metrics as at June 2023
Credit funds – FUM metrics as at 30 June 2023 COMMITTED INVESTED FEE EARNING FUM NOT YET FUND FEE BASE FEE FUND NAME FUM FUM FUM EARNINGS FEES STRUCTURE BENCHMARK QRI (ASX listed) $601m $549m1 $601m - base fee, PF, transaction fee % on net asset value QSDF $703m $659m $659m $44m QPICF $220m $73m $73
Slide 35: Equity funds – FUM metrics as at June 2023
Equity funds – FUM metrics as at 30 June 2023 COMMITTED INVESTED FEE EARNING FUM NOT YET FUND FUND NAME FUM FUM FUM EARNINGS FEES FEE STRUCTURE BASE FEE BENCHMARK Opportunity I $81m $58m $58m -3 % of invested FUM % of committed FUM (invested FUM Opportunity II $273m $229m $273m - base fee, PF post-i
Slide 36: Closing period FUM
Closing period FUM $M FY19 FY20 FY21 FY22 FY23 Committed FUM Funds management 1,810 2,290 2,503 3,7941 5,6741 Arch Finance 448 480 480 465 400 Total committed FUM 2,258 2,770 2,983 4,259 6,074 Invested FUM Funds management 1,086 1,444 1,660 2,458 3,448 BTR equity2 - - - 46 101 Arch Finance 399 440 4
Slide 37: Fund key
Fund key LISTED ENTITY ASX: QAL Qualitas Limited LISTED FUNDS ASX: QRI Qualitas Real Estate Income Fund UNLISTED FUNDS QSDF Senior Debt Fund BTR Build-To-Rent QBIF Build-to-Rent Impact Fund QCDF Construction Debt Fund QCDF II Construction Debt Fund II QDCI Diversified Credit Investments QDREF Divers
Slide 38: Glossary
Glossary AUM Assets under management MREIT Mortgage Real Estate Investment Trust Average invested FUM Average monthly invested FUM excluding BTR equity and Arch Finance Open-ended Fund Fund without expiry dates CAGR Compound annual growth rate Perpetual capital Open-ended funds with no mandated expi