Gerova Financial Group Ltd · OTC:GVFG
Gerova Financial — Corporate Update (May 2010)
22 slides from Gerova Financial's corporate update, May 14, 2010
Slide 1: Corporate Update Presentation
Corporate Update Presentation May 13, 2010 GEROVA Financial Group, Ltd. vax
Slide 2: Forward Looking Statements
Forward Looking Statements This Presentation contains forward-looking statements within the meaning of the Private Securities jation Reform Act of 1995 regarding GEROVA Financial Group, Ltd. (the " Company"), the assets and businesses acquired in January 2010 and the Company's business after complet
Slide 3: Table of Contents
Table of Contents I Overview of GEROVA and its Differentiated Business Model Company History and extraordinary general meeting Summary Insurance Platform: Sustainable Structural Advantages to ROE Conclusion
Slide 4: Quote by Sir John Templeton
“It is impossible to produce a superior performance unless you do something different from the majority.” - Sir John Templeton Group Le.
Slide 5: Differentiated and Sustainable Advantage
Differentiated and Sustainable Advantage + GEROVA Financial Group is an international reinsurance company currently focused on the life and annuity reinsurance markets, in addition to niche property and causality business = We were established in January 2010 explicitly to take advantage of opportun
Slide 6: Continuation of Credit Unwind Presents Opportunities for GEROVA
Continuation of Credit Unwind Presents Opportunities for GEROVA ‘AugG2 Nord FebOS May-08 AugG7 Nov-08 Febst0 Source: S&P LCD, weet * Many hedge funds have suffered significant ° on —sePsco liquidity issues In order to fund client redemptions, these hedge funds have been forced to prematurely sell il
Slide 7: Differentiated Investment Approach
Differentiated Investment Approach eB We underwrite annuity and life insurance risks that we believe will produce favourable long-term returns on shareholder equity Our investment portfolio derived from our insurance reserves - our float - is allocated across traditional fixed income investments, an
Slide 8: Growth Strategy
Growth Strategy = Our growth strategy includes fully deploying and leveraging our insurance regulatory capital by providing insurance and writing reinsurance to the top- tier life insurance and reinsurance companies in all the major global markets. = By accepting select insurance liabilities through
Slide 9: Large Addressable Market with High Growth
Large Addressable Market with High Growth Our addressable market is large and according to Standard and Poors research based on data from AM. Best Co. Inc, the global insurance rating and information agency, the life and health insurance industry's assets totalled $4.6 trillion at December 31, 2008,
Slide 10: Today Reinsurance is a Cheaper Cost of Capital Than Equity Issuances
Today Reinsurance is a Cheaper Cost of Capital Than Equity Issuances 10eear Average 10x 10Year Mem 20% geaaisagee 2ns100 —a/e1or_—«s2002 «6 2BNO-—wlBNDA-—«aI17I0—tORAIDE © aMOT_—« 169 —_-2/RNIH0 Pac cos — Lie ers + Insurers and reinsurers trading at historically low valuation multiples * Opportunity
Slide 11: Company History and Overview of the Shareholder Meeting Objectives
Company History and Overview of the Shareholder Meeting Objectives
Slide 12: History
History = In January 2008, we consummated an initial public offering of our ordinary shares = In January 2010, issued approximately $765 million in new equity (subject to audit and appraisal adjustments) acquiring various unquoted financial assets having an estimated value of approximately $1.42 bil
Slide 13: Purpose of the Shareholder Resolutions and Meeting
Purpose of the Shareholder Resolutions and Meeting The purpose of the May 12th meeting was to seek shareholder approval of measures including proposals to: = Immediately convert existing preferred shares into ordinary shares and to increase the Company's authorized capital to accommodate the preferr
Slide 14: GEROVA Financial Group EGM
GEROVA Financial Group EGM Summary of resolutions that were voted on by shareholders and passed on May 12, 2010: 1. 2. 2010 Stock Incentive Plan Amendment of the existing Articles of Association to permit immediate conversion of all outstanding Series A preferred shares into ordinary shares Increase
Slide 15: Benefits to GEROVA
Benefits to GEROVA = 100% of the 742,250 Series A Preferred Shares are retired through their conversion into approximately 123,700,000 ordinary shares, subject to audit adjustments described below * We expect that the converted ordinary shares will be freely tradable on January 31, 2011 * Preferred
Slide 16: Senior Leadership
Senior Leadership Complementary financial, strategic, operational, managerial, and investment skills with strong track records of supérior performance Stuart LR Si lanaging Director ‘Over 20 years of management, tax and international law experience = Partner inthe international tax practice of Trans
Slide 17: Reinsurance Platform: Sustainable Structural Advantage to ROE
Reinsurance Platform: Sustainable Structural Advantage to ROE
Slide 18: Warren Buffett quote on insurance float
eB ww the insurance group delivered an underwriting gain for the sixth consecutive year. This means that our $58.5 billion of insurance “float” - money that doesn't lon h hold and in r our own benefit - cost us less than zero. In fact, we were paid $2.8 billion to hold our float during 2008. Charlie
Slide 19: ROE with Less Risk Taking
ROE with Less Risk Taking = Our objective is to consistently produce superior ROE = Our ‘float’ helps facilitate this ROE target = Float has the same performance enhancements as traditional leverage obtained through debt, without taking on risks of debt = Our business focuses on ‘Investment Spread’
Slide 20: Growth Opportunities
Growth Opportunities Actively undertaking additional earnings growth opportunities in the insurance sector through - Acquisition of insurance companies - Reinsurance of books of business, from well rated carriers Surplus relief transactions, leveraging our current portfolio of assets Partnerships wi
Slide 21: Positive Stock Market Momentum
Positive Stock Market Momentum Stock Price (%) S&P L&H - One Year Stock Price Performance 80 60 40: 20 eB GEROVA Financia Group, Ld 12-Month Insurance Company Stock Performance — S&P Life and Health +34,.24% — S&P Multi-line Insurance +44.87% — S&P P&C +21.24% a
Slide 22: Conclusion
Conclusion + Right time to take advantage of dislocation in the financial markets + Right time to acquire operating companies and capture market share Investment + Unique opportunity to acquire high-quality assets at discounted prices *+ Unique opportunity for growth of the reinsurance portfolio due