Navigator Global Investments Ltd · ASX:NGI
Navigator Global Investments — FY2020 Earnings Presentation
34 slides from Navigator Global Investments's earnings presentation, Aug 13, 2020
Slide 1: 2020 Annual Results Presentation
2020 Annual Results Presentation 13 August 2020 Authorised by: Board of Navigator Global Investments Limited
Slide 2: 2020 snapshot
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. 2020 snapshot Closing AUM Management fee revenue 16.7 105.4 14.2 87.5 11.8 US$11.8 billion US$87.5 million 75.5 FY18 FY19 FY20 FY18 FY19 FY20 EBITDA Dividends per share US$30.5 million 17.0 37.7 16.
Slide 3: Summary of FY20 annual result
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. Summary of FY20 annual result 30 June 2020 30 June 2019 % USD millions USD millions Change Management fee income 87.511 105.392 (17%) Performance fee income 5.576 1.135 391% Reimbursement of fund op
Slide 4: Impact of leasing standard and other non-recurring items
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. Impact of leasing standard and other non-recurring items 30 June 2020 USD millions Revenue USD 101.5m Expenses1 USD 71.9 m EBITDA USD 30.5 m Additional cash lease payments USD 2.2 m Adjusted EBITDA
Slide 5: Summary of results by half year period
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. Summary of results by half year period FY2019 FY2020 H1 = six months ending 31 December H1 H1 H2 H2 = six months ending 30 June H2 USD USD USD USD millions Millions millions millions Management fees
Slide 6: Revenue: management and performance fees
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. Revenue Management and platform fees Performance fees Management fees of $87.5m for the year, down 17% on the prior year: The Group earns performance fees on selected Commingled Funds and Customised
Slide 7: Net operating expenses
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. Net operating expenses Employee expenses Professional & consulting There was a $4.4 million decrease in employee costs for the Group as compared to the prior The Group utilises a number of expert co
Slide 8: Solid balance sheet
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. Solid balance sheet Cash Trade & other receivables Net Tangible Assets cents per share: Current assets US$27.0 million US$16.0 million 37.1* Key sources and uses of cash for the period: Predominantl
Slide 9: Dividends
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. Dividends Capital management policy Dividends in USD cents per share The Company has set a policy of paying a dividend of 70% to 80% of the earnings before interest, tax, depreciation and amortisati
Slide 10: COVID-19 impact
COVID-19 impact economic factors As investment management is the Group’s core operations, business and economic factors have had the largest impact on our business. Business and The extreme volatility of global markets in March led to some disappointing investment performance in our multi-strate
Slide 11: 30 June 2020 AUM
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. 30 June 2020 AUM Movement in AUM over FY20: 30 June 2019 Net Flows Performance 30 June 2020 Note 1 Note 2 & 3 Note 3 Commingled Funds USD 4.80 bn ↓ USD 0.77 bn ↓ USD 0.11 bn USD 3.92 bn Customised S
Slide 12: Assets under Management
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. Assets under Management Composition of AUM as at 30 June 2020: Service Commingled AUM by Strategy Platform Equity Services strategies 22% Commingled Funds 48% 32% Multi- strategy Customised 52% Solu
Slide 13: Changes to AUM over the financial year
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. Changes to AUM over the financial year Lighthouse MAS Commingled Customised & 0.9 Platform AUM at the beginning of the 7.1 30 June 2019 USD 14.2 financial year was: MAS 14.2bn Customised 2.3 Lightho
Slide 14: Key Lighthouse Funds – performance estimates
The numbers in this presentation have been presented in US dollars (USD), unless otherwise indicated. Key Lighthouse Funds – performance estimates June 2020 Calendar 3 Year Lighthouse Fund 1 month 3 Year 5 Year YTD Volatility Lighthouse Diversified Fund Limited Class A 2.95% -12.21% -2.23% -0.72% 11
Slide 15: Appendices
Appendices
Slide 16: Appendix A: Reconciliation of total expenses to net operating expenses
Appendix A Reconciliation of total expenses to net operating expenses 30 June 2020 30 June 2019 % USD millions USD millions Change Employee expense (44.216) (48.573) 9% Professional and consulting expenses (8.143) (6.800) (20%) Information technology expense (3.540) (3.631) 3% Occupancy expense (1.5
Slide 17: Appendix B: Effect of implementation of AASB Leases
Appendix B Effect of implementation of AASB 16 Leases from 1 July 2019 As at 30 June 2020, the Group’s balance sheet reflects the following items: The Group adopted AASB 16 Leases on 1 July 2019. AASB 16 introduces a single lease accounting model which eliminates Right-of-use assets - $19.3m the
Slide 18: Acquisition of portfolio of strategic investments
Acquisition of portfolio of strategic investments 13 August 2020 Authorised by: Board of Navigator Global Investments Limited
Slide 19: A transformative transaction with a compelling rationale
A transformative transaction with a compelling rationale Strategic acquisition of a diversified portfolio of strategic investments Economic interests in the management companies of six well established and specialised alternative asset management boutiques Proven track record of generating stron
Slide 20: Transaction overview
Transaction overview Navigator Global Investments ("Navigator" or "NGI") to acquire a portfolio of six minority investments in the management companies of established alternative asset managers (the Assets to be "Portfolio") from investment funds managed by Dyal Capital Partners (the "Seller" or "
Slide 21: Transaction overview (cont.)
Transaction overview (cont.) Dyal and Navigator to enter into a shareholder's agreement which continues for so long as Dyal holds >10% of Navigator’s Ordinary Shares on a fully diluted basis and includes: Long term Dyal retaining majority of consideration for at least 5 years – refer to Appendix
Slide 22: Consideration and cash flow participation by NGI and the Seller
Consideration and cash flow participation by NGI and the Seller At Closing Year 0-5 After Year 5 Consideration Cash flow participation 40% of diluted issued capital 40.5m Ordinary Shares Payment of 4.5x average Consideration amount in excess of the 67.6m Ordinary Shares via Convertible Notes Min
Slide 23: Transaction Rationale
Transaction Rationale Proven managers with strong long term track records of generating alpha and managing profitability Portfolio of high-quality Track record of launching new products responsive to client needs managers Strong leadership teams with deep resources across investment and non-in
Slide 24: Diversified, well-established portfolio
Portfolio of high-quality managers Diversified, well-established portfolio AUM1 (USD in billions) Description Well diversified across: Year founded: 1981 Headquarters: New York, USA 26 strategies $9 Year acquired by Dyal: 2012; Multi-strategy across various credit 111 investment follow-o
Slide 25: Diversified alpha sources producing consistent portfolio results
Portfolio of high-quality Diversified alpha sources producing managers consistent portfolio results Historical revenue and pre-tax profits1 120 Average performance 111 107 105 100 fee revenues: 92 US$33m 20 37 45 39 80 26 Average management fee revenues: US$m US$70m 40 79 71 67 66 66 Average pre-tax
Slide 26: Diversified group of specialist and profitable businesses
Portfolio of high-quality Diversified group of specialist and managers profitable businesses Average Average Current % of AUM Historical AUM1 (USDbn) management fee rate performance fee rate2 charging performance fees $39.7 $38.5 $37.4 $34.9 $35.2 104bps 17% 67% 2016 2017 2018 2019 Current Average p
Slide 27: Post-acquisition business structure
Establishes a new avenue of growth Post-acquisition business structure NGI Strategic Holdings Leading multi-manager hedge fund solutions Focused on making accretive investments in and provider acquisitions of high quality established specialised alternative asset management firms Industry lead
Slide 28: Overview of Dyal
Partnership with Dyal Capital Partners Overview of Dyal Dyal Capital Partners Dyal Business Services Stakes Fund Investment Platform CAPITAL STRATEGIES ADVISORY SERVICES Dyal Capital Dyal Capital Dyal Capital Dyal Capital Marketing Corporate Strategy Partners I Partners II Partners III Partners IV S
Slide 29: Expected Financial Outcomes
Compelling financial rationale Expected Financial Outcomes Accretion • Expected to be immediately Cash EPS accretive for NGI's shareholders • Distributions from the acquired Portfolio are expected to support current dividend payout ratio Dividends • Expected to support the long term dividend policy
Slide 30: Next steps
Next steps Date of Event 13 August 2020 • Signing of definitive agreements • The Notice of Meeting and Explanatory Memorandum explaining the benefits and risks of Early October 2020 the proposed transaction, and containing an Independent Expert’s Report, are expected to be mailed to NGI shareholders
Slide 31: Appendices
Appendices
Slide 32: Appendix 1: Long term alignment of interests
Appendix 1 Long term alignment of interests Consideration at closing Dyal liquidity in shares and Notes Dyal will receive 40% economic interest in NGI (on a fully diluted • Up to 40.5 million of the NGI Ordinary Shares (including basis) through: NGI Ordinary Shares issued on conversion of the Notes)
Slide 33: Appendix 2: Other key terms
Appendix 2 Other key terms Termination and Contains customary termination provisions, including rights to terminate by either party where: break fee a) the other party has materially breached the agreement and such breach is not cured within 30 days after written notice; b) the transaction is not cl
Slide 34: Disclaimer
Disclaimer This presentation has been prepared by Navigator Global Investments Limited (NGI) and provides information regarding NGI and its activities current as at 13 August 2020. It is in summary form and is not necessarily complete. It should be read in conjunction with NGI’s 31 December 2019 Int
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