Ashmore Group Plc · LSE:ASHM
Ashmore — Investor Presentation (December 2024)
38 slides from Ashmore's investor presentation, December 2024
Slide 1: Ashmore Group plc Investor presentation
Ashmore Group plc Investor presentation December 2024 www.ashmoregroup.com
Slide 2: Contents
Contents Ashmore Group plc Page Emerging Markets Page Ashmore ‘at a glance’ 3 Superior growth 17 Capitalising on the Emerging Markets opportunity 4 Structural reforms 18 Three-phase growth strategy 5 Diversification provides opportunities 19 Active investment processes 9 Active vs passive investing
Slide 3: Ashmore 'at a glance'
Ashmore ‘at a glance’ • A specialist Emerging Markets manager with USD 51.8 bn AuM AuM: diversified by investment theme & client type (30 September 2024) diversified across asset classes Alternatives, 3% External debt, 14% Equities, 14% • Active investment management delivered by committee-based inv
Slide 4: Capitalising on the Emerging Markets opportunity
Capitalising on the Emerging Markets opportunity Emerging Markets offer superior growth, supported by reforms and diversification • Superior GDP growth vs Developed Markets • Structural reforms support growth & provide resilience • Diversification with more than 70 emerging countries • Dominant shar
Slide 5: Three-phase growth strategy
Three-phase growth strategy • Developed world investors hold more than USD 100 trillion of assets and are profoundly underweight Emerging Markets; target allocations are less than 10% compared with global benchmark weights of approximately 10% to 30% • The Emerging Markets investment universe contin
Slide 6: Strategy phase 1: Establish Emerging Markets asset classes
Strategy phase 1: Establish Emerging Markets asset classes Convergence: GDP per capita (indexed 1980 = 100) • Ashmore’s specialist focus means it is well-placed to exploit the significant growth potential as emerging nations develop 2023 EM = US$15,250 DM = US$66,000 • Large investable markets acros
Slide 7: Strategy phase 2: Diversify assets under management
Strategy phase 2: Diversify assets under management AuM development (USD bn) • Diversification mitigates impact of cyclical factors on revenues, and includes asset classes, products and 100 clients (type & location) 90 • Focus on increasing scale of equities & alternatives 80 AuM, and growing IG str
Slide 8: Strategy phase 3: Mobilise Emerging Markets capital
Strategy phase 3: Mobilise Emerging Markets capital • Investable capital pools in Emerging Markets are growing faster Increasing contribution from local offices than in Developed Markets 8.0 18% 7.0 16% • AuM growth of +7% YoY in FY2024 to US$7.5 billion, now 15% 14% 6.0 of Group 12% 5.0 10% 4.0 • D
Slide 9: Active investment processes
Active investment processes • Specialist, active investment management is required to exploit inefficiencies in Emerging Markets • Investment committees oversee experienced teams with collective responsibility for strategies in each theme ˗ No ‘star’ culture • ~100 investment professionals covering
Slide 10: Investment themes
Investment themes FIXED INCOME ALTERNATIVES (US$43.3bn) (US$1.2bn) EQUITIES (US$7.3bn) Local Corporate External Debt Blended Debt THEME Currency Debt (US$7.8bn) (US$12.2bn) (US$18.3bn) (US$5.0bn) GLOBAL • Broad • Bonds • Broad • Blended • EM Active • EM Equity • EM Frontier • Private equity STRATEGI
Slide 11: Investment performance
Investment performance One year: 74% outperforming Three years: 60% outperforming Five years: 68% outperforming 100% 100% 100% 90% 90% 90% 80% 80% 80% 70% 70% 70% 60% 60% 60% 50% 50% 50% 40% 40% 40% 30% 30% 30% 20% 20% 20% 10% 10% 10% 0% 0% 0% June 2023: 67% June 2023: 69% June 2023: 49% Outperformi
Slide 12: Investment performance
Investment performance 1yr 3yr 5yr 30th September 2024 Ashmore Benchmark Ashmore Benchmark Ashmore Benchmark External debt Broad 24.7% 18.6% -1.8% -0.4% -0.6% 0.9% Sovereign 28.3% 18.6% 2.2% -0.4% 1.5% 0.9% Sovereign IG 13.3% 13.8% -2.1% -3.0% 0.2% -0.5% Local currency Bonds 14.7% 13.4% 3.4% 0.6% 2.
Slide 13: Remuneration philosophy aligns interests
Remuneration philosophy aligns interests • Consistent philosophy aligned with cyclical profits and protects Linking pay & performance returns to shareholders through market cycles 100% • Applies to all Group employees, underpins strong team-based 80% culture and employee retention 60% • RemCo determ
Slide 14: Delivering returns for shareholders through market cycles
Delivering returns for shareholders through market cycles • High-quality revenues and flexible cost base Substantial & liquid financial resources ˗ Strong bias to recurring management fee income ˗ Disciplined control of operating costs 257.6 ˗ Profit-based variable remuneration ˗ Relatively high ope
Slide 15: Sustainability
Sustainability Approach to sustainability centred on three pillars Consistent, coherent approach across the Group • ESG Committee oversees implementation of all ESG and responsible investment issues; includes front office, middle office & support functions; reports to the plc Board Corporate • Annua
Slide 16: Emerging Markets
Ashmore Emerging Markets eee
Slide 17: Superior growth supported by reforms & diversification
Superior growth supported by reforms & diversification • Superior growth delivered by powerful economic Emerging Markets’ superior growth & dominant share of resources convergence trends with the developed world 8.0 6.0 • Emerging Markets have a dominant share of 4.0 economic resources, but underrep
Slide 18: Structural reforms
Structural reforms • Most important development of past few decades is the Structural shift to local currency funding (US$trn) shift from external to local currency funding 25 ‒ Supported by improvements in quality & effectiveness of monetary & fiscal policymaking, and 20 ‒ Growth in institutional i
Slide 19: Diversification provides opportunities
Diversification provides opportunities • Diverse equity & fixed income asset classes representing Large and diverse benchmark indices more than 70 countries Index Value Countries Issuers ˗ No country is more than 5% of EMBI GD (US$bn) ˗ GBI-EM GD country weights capped at 10% EMBI GD 1,240 72 163 GB
Slide 20: Active versus passive investing
Active versus passive investing Large investment universe, low index representation • EM fixed income and equity markets are inefficient − Benchmark indices are unrepresentative of the US$41.6trn US$39.4trn 17% investment opportunity 19% − Active management is critical • Structural developments, e.g
Slide 21: Historical valuations relative to Developed Markets
Historical valuations relative to Developed Markets External debt Local currency 8.00 800 GBI-EM GD yield (%) Difference: GBI-EM vs GBI global (%) EMBI GD spread over UST, bps 700 7.00 600 6.00 500 5.00 400 4.00 300 3.00 200 2.00 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Slide 22: Robust macroeconomic fundamentals across Emerging Markets
Robust macroeconomic fundamentals across Emerging Markets • Emerging Markets have been resilient to external shocks due to effective Inflation & local rates (%) fiscal & monetary policies 10 EM CPI • Inflation under control, real interest rates remain high: potential for 9 Policy rate further rate c
Slide 23: Emerging Markets outlook
Emerging Markets outlook Attractive EM valuations • Strong asset class performance since late 2022 ‒ Underweight investors are missing out Index Valuation ‒ Valuations & positive outlook support future outperformance EMBI GD yield / spread 7.9% / 400bps ‒ Active management critical to capturing the
Slide 24: Summary of recent financial performance: FY2024
Ashmore Group plc Summary of recent financial performance: FY2024
Slide 25: Financial performance overview
Financial performance overview • Adjusted net revenue -4% FY2024 FY2023 ‒ Impact of lower AuM offset by higher performance fees £m £m YoY Adjusted net revenue 187.8 195.4 -4% • Adjusted operating costs +22% Adjusted operating costs (113.0) (92.4) -22% ‒ Non-VC costs +5% ‒ VC accrued at 31% Adjusted
Slide 26: Assets under management
Assets under management • Performance added US$2.1 billion to AuM, reflecting good market AuM development (US$bn) returns and outperformance over the 12 months 4.5 2.6 4.0 • Subscriptions US$7.2 billion, 13% of opening AuM (FY2023: US$7.2 billion, 11%) 0.5 0.2 ‒ Flows into local currency funds, new
Slide 27: Quarterly net flows
Quarterly net flows +8.0 +6.0 +4.0 +2.0 USD billion +0.0 -2.0 -4.0 -6.0 -8.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 27
Slide 28: Revenues
Revenues • Net management fees -12% YoY FY2024 FY2023 − Average AuM -10% £m £m YoY − Higher average GBP:USD rate, -3% impact Net management fee margin (bps) 39 38 +1bp − 1bp increase in net management fee margin Net management fees 160.4 183.2 -12% Performance fees 22.7 5.1 +345% • Lower FX hedge ga
Slide 29: Operating costs
Operating costs • Staff costs increased 3% FY2024 FY2023 £m £m YoY ‒ Full period effect of wage inflation Staff costs (32.2) (31.4) -3% Other operating costs (25.3) (23.3) -9% • Other operating costs +9% YoY D&A (3.1) (3.2) +3% ‒ Higher professional fees Operating costs before VC (60.6) (57.9) -5% V
Slide 30: Seed capital
Seed capital • Total value of c.£265 million comprises: FY2024 FY2023 ‒ Market value of investments (£257.6 million) £m £m ‒ Commitments (£7.2 million) - realised profit 11.3 2.4 - unrealised MTM profit/(loss) 10.4 (10.7) • Profitably recycled £68.9 million principally from alternatives and equities
Slide 31: Other P&L items
Other P&L items • Higher interest income FY2024 FY2023 ‒ Achieved average yield of >5% vs 3% in FY2023 £m £m YoY Interest income 24.9 15.9 +57% • Small business disposals in Latin America & Asia Realised gains on disposal 5.2 - - of investments Profit before tax 128.1 111.8 +15% • Effective tax rate
Slide 32: Financial resources
Financial resources • Well-capitalised with total resources of £696.2 million Substantial, liquid financial resources(1) (£m) ˗ Group capital requirement of £97.0 million 113.5 23.4 124.4 ˗ Excess capital of £599.2 million, equivalent to 68.2 20.9 3.6 505.7 84p/share 468.3 13.8 • Significant liquid
Slide 33: Net management fee margins
Net management fee margins 162 144 FY2023 FY2024 58 55 44 38 39 37 31 33 33 28 29 30 Group External debt Local currency Corporate debt Blended debt Equities Alternatives Fixed income: 33bps (FY2023: 33bps) 33
Slide 34: Foreign exchange
Foreign exchange • GBP:USD rate Currency exposure of cash and deposits(1) − Period-end rate moved from 1.2714 to 1.2641 30 June 2024 % 30 June 2023 % £m £m − Average rate 1.2609 vs 1.2079 in FY2023 US dollar 223.8 44 62.7 13 Sterling 241.8 48 374.0 80 • P&L FX effects in FY2024: Other 40.1 8 31.6 7
Slide 35: Appendix
Ashmore Appendix eee
Slide 36: Disclosures
Disclosures Page 11: − Gross performance is shown, weighted by fund AuM, to provide a representative view to analysts and shareholders of Ashmore’s investment performance over relevant time periods − Only funds at 30 September 2024 and with a performance benchmark are included, which specifically ex
Slide 37: Disclaimer
Disclaimer IMPORTANT INFORMATION This document does not constitute an offer to sell or an invitation to buy shares in Ashmore Group plc or any other invitation or inducement to engage in investment activities. Certain statements, beliefs and opinions in this document are forward-looking, which refle
Slide 38: Investor relations contact
Investor relations contact Paul Measday Telephone: +44 (0) 203 077 6278 Email: paul.measday@ashmoregroup.com Website: ir.ashmoregroup.com 38
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