Westwood Holdings Group Inc · NYSE:WHG
Westwood — Investor Presentation (September 2018)
26 slides from Westwood's investor presentation, Sep 30, 2018
Slide 1: Investor Relations Presentation
Westwood ® Investing Where It Counts Investor Relations Presentation As of September 30, 2018
Slide 2: Westwood | Firm Overview
Westwood | Firm Overview Our mission is to exceed client expectations through Institutional exceptional performance and ethical conduct. Mutual Funds Wealth Management Multi-Investment Team Structure Employee Ownership Culture Overview1 U.S. Value Employees and directors own equity, Global and Emerg
Slide 3: High-Conviction Equity and Outcome-Oriented Solutions
Westwood | High-Conviction Equity and Outcome-Oriented Solutions Separately Managed Accounts Commingled Funds Mutual Funds UCITS U.S. Equity Fixed Income Our Strategies AUM: $20.8B* AllCap Value Opportunistic High Yield AllCap Growth Short Duration High Yield Concentrated LargeCap Value Custom Solut
Slide 4: Investment Management | Product Breadth Across the Risk Spectrum
Investment Management | Product Breadth Across the Risk Spectrum Emerging Multi Market Worldwide Concentrated Markets Asset Neutral Income LargeCap Select SmallCap SMidCap High Income Opportunity Value Equity SMidCap Value Income Low High Volatility Volatility Income Strategic LargeCap AllCap SMidCa
Slide 5: Distribution | Product and Channel Breakdown
Distribution | Product and Channel Breakdown STRATEGY BREAKDOWN INSTITUTIONAL CLIENT TYPE 3% 7% 6% 3% Liquid Alternatives Foundations/Endowments Taft-Hartley/Superannuation Low Volatility Equity 3% 3% UCITS 19% Liquid Real Assets (MLPs) 38% Public Funds 18% 5% U.S. Value Equity Emerging Markets Equi
Slide 6: Business Growth | Shareholder Value Creation
Business Growth | Shareholder Value Creation Current Yield 6.5%* WHG +697.2% Total Shareholder Return Comparison Since Inception 1000% 800 600 400 200 0 Q3 2018 -200% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bloomberg, daily data from 7.1.02 to 9.3
Slide 7: Shareholder Value Creation | Capital Management
Shareholder Value Creation | Capital Management Annual Dividends Over $165 million of dividends paid out from 2002 to 2017 $25 $20 $ in millions $15 $10 $5 $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Quarterly Dividends Special Dividends As of December 31, 2017
Slide 8: Business Growth | Revenue and Assets Under Management
Business Growth | Revenue and Assets Under Management Westwood Growth in Revenues and Assets Under Management 160 30 140 25 120 20 100 Annual Revenue ($ millions) Quarterly AUM ($ billions) 80 15 60 10 40 5 20 - 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Quarte
Slide 9: Distribution | Multi-Channel Breakdown
Distribution | Multi-Channel Breakdown Institutional AUM Non-U.S. Client Assets $16.0 $14.0 25.0% $12.0 20.0% AUM ($ billions) $10.0 % of AUM 15.0% $8.0 $6.0 10.0% $4.0 5.0% $2.0 0.0% $0.0 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Wealth Management AUM Mutual Funds AUM $7
Slide 10: 2017 | Best Places to Work
2017 | Best Places to Work 10 Investing Where It Counts
Slide 11: Strategic Focus | Executive Overview
Strategic Focus | Executive Overview 11 Investing Where It Counts
Slide 12: Long-Term | Strategic Focus
Long-Term | Strategic Focus Performance Human Capital Sales • Distribution “alpha” focused on Performance differentiating our value proposition from pre-sale to cross-sale Alpha transcending performance cycle. Mergers & Product Marketing • Product innovation “alpha” focused on Performance Acquisitio
Slide 13: Growth Drivers | 2019
Growth Drivers | 2019 2019 growth objectives are highly focused on sales execution across our high-conviction equity and outcome-oriented investment solutions. Product Client Sales Sales Innovation Digital For Life • Small Cap Value • Expand multi-asset • Enhance Automation / • Shift from a pure pro
Slide 14: Financial | Highlights
Financial | Highlights 14 Investing Where It Counts
Slide 15: Q3 2018 | Highlights
Q3 2018 | Highlights • Total AUM of $20.8 billion and AUA of $268 million at Assets Under Management September 30, 2018 • Our Emerging Markets and Emerging Markets SMid strategies delivered top decile peer rankings, and our LargeCap Value and Emerging Markets Plus strategies “Our U.S. Value products
Slide 16: Financial | Trends
Financial | Trends Fee Revenue1 - Historical Fee Revenue1 - QTD and YTD Annual Asset-based Advisory & Trust Fees ($ millions) $128.1 $121.8 $130.8 $97.2 $92.2 $109.0 $33.2 $88.4 $30.9 $29.2 2013 2014 2015 2016 2017 Fee Revenue QTD Fee Revenue YTD Q3 2017 Fee Revenue Q2 2018 Fee Revenue Q3 2018 Fee R
Slide 17: Reconciliation of Net Income to Economic Earnings
Reconciliation of Net Income to Economic Earnings We are providing a performance measure that we refer to as Economic Earnings. Both our management and Board of Directors review Economic Earnings to evaluate our ongoing performance, allocate resources and determine our dividend policy. We also belie
Slide 18: Appendix
Appendix 18 Investing Where It Counts
Slide 19: The Shift from Active to Passive Continued in 2017
The Shift from Active to Passive Continued in 2017 Flows from Active to Passive Funds in U.S. Equities 2,000 1,556 1,500 Passive 1,000 Billions of U.S. Dollars 500 0 -500 -1,000 Active -1,500 -2,000 -1,725 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Passive Active Source: Strategas Passive = Ind
Slide 20: The Challenge | The Need for Alpha May be Greater in Future Periods
The Challenge | The Need for Alpha May be Greater in Future Periods Alpha may appear more attractive going forward at current valuation levels in a low return environment. Shiller P/E for S&P 500 vs. 10-Yr Forward S&P 500 Total Return 25% Since 1950 20% 15% 33.2x 10-Yr Forward Return Current Shiller
Slide 21: Westwood Insights | The Need for Alpha May be Greater in Future Periods
Westwood Insights | The Need for Alpha May be Greater in Future Periods 60/40 Allocation 70/30 Allocation 60% 70% Equities Equities 30% Bonds 40% Bonds Historical bond returns (1982-2017) 7.86% 7.86% Expected bond returns - intermediate term / up to 10 years 2.7 – 3.5% 2.7 – 3.5% Expected annual imp
Slide 22: Why Are We Optimistic? | High Operating Margins
Why Are We Optimistic? | High Operating Margins Operating Margins by Industry Tobacco 40% Transportation (Railroads) 32% Drugs (Biotechnology) 28% Asset Management 26% Beverage (Alcoholic) 24% Drugs (Pharmaceutical) 24% Information Services 23% Software (Internet) 22% Semiconductor 21% Hotel/Gaming
Slide 23: Westwood | Track Record of Shareholder Value Creation
Westwood | Track Record of Shareholder Value Creation Total Return Since 2002 Westwood Spin-off Diamond Hill Investment Group Inc 5629.77% Virtus Investment Partners Inc 1058.5% Hennessy Advisors 761.6% Westwood Holdings Group Inc 697.2% Cohen & Steers Inc 471.1% GAMCO Investors Inc 64.1% Silvercres
Slide 24: Westwood | Forward Looking Statements
Westwood | Forward Looking Statements Statements in this presentation that are not purely historical facts, including, without limitation, statements about our expected future financial position, preliminary estimates, results of operations or cash flows, as well as other statements including, witho
Slide 25: Mutual Fund Disclaimer
Mutual Fund Disclaimer To determine if a mutual fund is an appropriate investment for you, carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Fund’s prospectus, which may be obtained by calling 1.8
Slide 26: Westwood Holdings Group, Inc.
Westwood H O L D I N G S G R O U P , I N C © westwoodgroup.com 200 Crescent Court, Suite 1200 Dallas, Texas 75201 T. 214.756.6900
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