Polar Capital Holdings Plc · LSE:POLR
Polar Capital — FY2024 Earnings Presentation
39 slides from Polar Capital's earnings presentation, Jun 27, 2024
Slide 1: Polar Capital: Full Year Results 2024
Polar Capital: Full Year Results 2024 Gavin Rochussen, Chief Executive Officer Samir Ayub, Chief Financial Officer polarcapital.co.uk This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Slide 2: Overview And Highlights
Overview And Highlights Net inflows into Artificial Intelligence and increased Continued interest in diversification of Global Tech distribution; Adjusted diluted strong support total EPS of from the Nordic 44p; 1% lower region and office yoy opening in AuM +14% Stockholm to £21.9bn at Net flows in
Slide 3: Market Perspective
Market Perspective This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. 3
Slide 4: Market Perspective
Market Perspective Global indices vs volatility 250% • Volatility remains at subdued levels despite macro risks 200% • Inflation has abated and interest rates peaked 150% • Interest rates expected to fall, with ECB already cutting once 100% • After a strong recovery in Q4 23, equity markets 50% cont
Slide 5: Market Perspective
Market Perspective Net sales of funds across Europe (€m) 40,000 • The last two years have been a challenging period for the asset management industry 30,000 20,000 • Following a difficult year in 2022, the funds flow rebound hoped for in 2023 failed to materialise 10,000 – Investor caution remained
Slide 6: Fund Performance And Capacity
Fund Performance And Capacity This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. 6
Slide 7: UCITS Performance
UCITS Performance Relative annualised fund performance against benchmark (since inception) 12% 1st Quartile 10% 2nd Quartile 8% 7.2% 3rd Quartile 6.5% 6.0% 6% 4th Quartile 4.5% 4.1% 4% 3.2% 1.7% 1.7% 2.0% 1.8% 2% 0.8% 1.0% 0.7% 0.4% 0% -0.1% -0.3% -2% -1.0% -0.5% -0.9% -4% -6% -5.5% -8% -10% -12% -1
Slide 8: Performance
Performance % of UCITS funds AuM by quartile ranking 100 • Strong UCITS fund performance against Lipper 90 peer groups • Material improvement over three years 80 70 % of UCITS AuM in the top two quartiles: 60 May 2024 May 2023 50 40 94% Over one year 79% Over one year 30 20 91% Over three years 64%
Slide 9: Performance Against Benchmarks
Performance Against Benchmarks % of UCITS AuM and funds that have outperformed benchmark to 31 May 2024 • Performance against benchmark since inception remains good with more than 80% of AuM YTD* outperforming benchmark • More than 60% of funds have outperformed benchmark since inception 1Y • 3 and
Slide 10: Capacity
Capacity Capacity as at 31 March 2024 • Total capacity across all strategies is £63bn Global Technology* • Total remaining capacity is £41bn Global Healthcare Sustainable Thematic Equity • Remaining capacity in funds that received net inflows in the six months to 31 March 2024 is: Emerging Markets &
Slide 11: AuM And Fund Flows
AuM And Fund Flows This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. 11
Slide 12: AuM
AuM £bn Average AuM CAGR 9.6%1 23.4 22.1 22.8 21.9 20.9 18.7 19.2 19.1 16.4 13.8 14.3 12.2 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 Jun-24 Total AuM Average AuM (trailing 12 months) Past performance is not indicative or a guarantee of future results. Source: Polar
Slide 13: Total Net Flows
Total Net Flows 12 months to 31 March 2024 £m 300 • Overall, we saw total net outflows for the year of £1.7bn, despite gross sales of over £4bn 200 • However, net outflows were offset by market and 100 investment performance, resulting in our AuM at the end of the financial year increasing by 14% to
Slide 14: Gross And Net Flows By Strategy
Gross And Net Flows By Strategy 12 months to 31 March 2024 Net strategy flows Gross strategy flows £m £m 600 1,500 400 1,000 200 500 - 0 (200) -500 (400) -1,000 (600) -1,500 (800) Melchior European Opportunities Global Healthcare Global Technology* European Forager UK Value Global Insurance Sustaina
Slide 15: Net Flows By Strategy
Net Flows By Strategy Calendar Year-To-Date to 14 June £m 500 • Despite an uncertain outlook, investor activity has 400 increased in 2024, with particular interest in our Emerging 300 Markets and Technology strategies in particular 200 • Net inflows into several UCITs funds, most notably 100 Emergin
Slide 16: Financial Review
Financial Review This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. 16
Slide 17: Financial Highlights
Financial Highlights YoY changes in statutory PBT 31 Mar 31 Mar £m Change 2024 2023 AuM and Revenue Average AuM (£bn) £19.6bn £19.6bn - Net management fees (£m)1 £153.7m £154.8m -1% Net management fee yield1 78 bp 79 bp -1 bp Profitability and other income Core operating profit1 £44.8m £47.9m -6% Co
Slide 18: Total Operating And Finance Costs
Total Operating And Finance Costs Managing cost base without step changes YoY changes in total operating and finance costs Year to Year to £m Mar-24 Mar-23 £m £m Salaries, bonuses and other staff costs1 35.0 36.1 Core distributions2,4 42.8 44.0 Share-based payments3 3.2 2.7 Performance fee interests
Slide 19: Other Operating Costs And Exceptional Items
Other Operating Costs And Exceptional Items Year to Year to Year to Year to Mar-24 Mar-23 Mar-24 Mar-23 Other operating costs £m £m Exceptional items £m £m IT 7.3 7.0 Recorded in operating costs Rent and rates 4.6 3.2 Termination and reorganisation costs - 5.0 Professional fees 2.6 2.6 Amortisation
Slide 20: Cash And Seed Investments
Cash And Seed Investments Strong balance sheet 31 March 2024 31 March 2023 Total cash and seed investments of £141.4m Total cash and seed investments of £151.0m £m £m Cash and deposits 105.6 Cash 106.9 Seed investments 35.8 Seed investments 44.1 141.4 151.0 EM Stars US Mutual 6.6 EM Stars US Mutual
Slide 21: Group Capital
Group Capital Strong balance sheet Year to Year to Capital allocation (£m) Regulatory Capital Mar-24 Mar-23 160 £m £m 142.9 135.9 Shareholders’ funds 135.9 142.9 140 Less: Regulatory deductions1 -26.8 -28.2 28.2 120 26.8 Capital after regulatory deductions 109.1 114.7 Less: dividend provision -31.0
Slide 22: Dividend Policy
Dividend Policy £137.9m £175.7m £169.4m £151.0m £141.4m Total cash and investments 70 50 • Total annual dividend maintained at 46p 45 60 62.2p 40 Policy 56.0p 50 35 • Under normal circumstances the Group expect to pay a total annual dividend 44.3p 44.0p 30 within a range of 55% - 85% of adjusted 40
Slide 23: Strategy And Outlook
Strategy And Outlook This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. 23
Slide 24: Growth With Diversification
Growth With Diversification Changing landscape through diversification – five largest AuM strategies of 2024 compared 100% • Progress made to diversify asset base 14% 14% 90% • Technology concentration has increased vs 4% 5% 80% 1% 2023 - following strong market movement - but 8% 8% remains lower th
Slide 25: Sales Momentum Building Into Core EM And Asia Strategies
Sales Momentum Building Into Core EM And Asia Strategies Polar Capital Emerging Markets And Asia Team • Strong team of sector specialists with significant experience • Sustainability fully integrated into process with a strong focus on material ESG issues • Marketed globally: Jorry Nøddekær – Inflow
Slide 26: Increased Interest In Global Technology and AI Funds
Increased Interest In Global Technology and AI Funds Technology investing a key strength of Polar Capital We look for technology Global, multi-cap portfolios companies exposed to with a growth-centric investment style structural, secular trends, applying or enabling AI which have Exceptional long-te
Slide 27: Dedicated Artificial Intelligence Fund
Dedicated Artificial Intelligence Fund Launched six years ago Polar Capital Artificial Intelligence Fund A global equity fund investing in future disruption 140% Xuesong Zhao 120% Partner 100% 80% 60% Ben Rogoff 40% Partner 20% 0% Nick Evans -20% Partner Polar Capital Artificial Intelligence Fund MS
Slide 28: Growth With Diversification – Product Development
Growth With Diversification – Product Development A measured and focussed approach to product growth with pipeline of new ideas Product launches • Melchior European Absolute Return1 • Emerging Market • Melchior Global Stars Equity1 • European Small Cap • China Stars • Melchior European • Emerging Ma
Slide 29: New Investment Team
New Investment Team International Small Company • Dan Boston joining Polar Capital in September 2024 • Will establish and lead Polar Capital’s International Small Company investment team and launch a new mutual fund that will complement our existing offering in the US market • Brings nearly 20 years
Slide 30: Regional Diversification Continues
Regional Diversification Continues US and Asia remain key growth opportunities Nordics Represents a key growth area. Material support for our Our distribution strategy remains EM range. Office now growth with diversification, by product, established in Stockholm client segment and geography Singapor
Slide 31: Awards And Nominations
Awards And Nominations Third-party recognition The Polar Capital Global Polar Capital Emerging Polar Capital was awarded Polar Capital won European Polar Capital Technology Insurance Fund won the Market Stars won Financial Fund Company of the Year by Fund Management Firm of the Trust won the Best Sp
Slide 32: Summary And Outlook
Summary And Outlook Strong balance International sheet and Small Company improved mutual fund outlook launch planned supports a for Q4 24, maintained provides a dividend differentiated Improved fund Extension product for the performance and strategies within US market differentiated existing fund of
Slide 33: Questions
Questions This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. 33
Slide 34: Appendices
Appendices This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation. 34
Slide 35: Current Investment Strategies
Current Investment Strategies Global Technology AuM: £9.9bn Global Healthcare AuM: £3.9bn Established: 2001 Technology Trust Established: 2007 Global Healthcare Trust Typical number of positions: 60-85 Global Technology (UCITS) Typical number of positions: 25-80 Healthcare Opportunities (UCITS) Biot
Slide 36: Current Investment Strategies
Current Investment Strategies Emerging Market & Asia AuM: £1.8bn UK Value AuM: £931m Emerging Market Stars (UCITS) China Stars (UCITS) Established: 2017 UK Value Opportunities Established: 2018 Asian Stars (UCITS) (UCITS) Typical number of positions: 30-100 Typical number of positions: 40-65 Emergin
Slide 37: Lipper Figures For Long And Alternative UCITS
Lipper Figures For Long And Alternative UCITS – As At 31 Mar 2024 1 Year 3 Years 5 Years Since AuM £m Percentile Percentile Percentile Inception 21* Japan Value (S JPY) 178 70 16 62 29/07/20161 7** Healthcare Opportunities (I USD) 1342 4 14 16 3/12/2007 18 Healthcare Blue Chip (I USD) 214 14 4 10 11
Slide 38: AuM Analysis
AuM Analysis AuM split by strategy Investor mix split by geography Long only 97.5% UK 60.2% Alternative 2.5% Europe 28.3% Nordics 3.1% Open Ended funds 73.0% North America 1.3% Investment Trusts 23.2% Asia 6.3% Segregated Mandates 3.7% Other 0.8% AuM split by investment team Global Technology 45.1%
Slide 39: Important Information
Important Information Polar Capital, 16 Palace Street, London SW1E 5JD House View: This document has been produced based on Polar Capital research and analysis and represents our house view. All sources are Polar Capital unless otherwise stated. Important Information: The information provided in thi
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