Pinnacle Investment Management Group Limited · ASX:PNI
Pinnacle Investment Management — H1 2018 Earnings Presentation
33 slides from Pinnacle Investment Management's earnings presentation, Feb 23, 2018
Slide 1: Pinnacle 2018 Interim Results ASX announcement
23 February 2018 By Electronic Lodgement The Manager Company Announcements Office ASX Ltd 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam Pinnacle Investment Management Group Limited (ASX: PNI) 2018 Interim Results Pinnacle Investment Management Group Limited (Pinnacle) is pleased to advise sharehol
Slide 2: Composition of Group Results
Composition of Group Results ($m) 1H2018 1H2017 Pinnacle* 8.1 4.1 Group overheads (Wilson Group) 0.0 (0.9) Profit before tax (PBT) from continuing operations 8.1 3.2 Minority Interests 0.0 (0.2) PBT from continuing operations attributable to shareholders 8.1 3.0 Tax (expense)/benefit - continuing op
Slide 3: Dividend and results teleconference
*Funds under management shown as the aggregation of 100% of Pinnacle Affiliates. Dividend The Board has resolved to pay a fully franked interim dividend of 4.6 cents per share to shareholders recorded on the register on 9 March 2018 and payable on 23 March 2018. As announced on 29 August 2017, the D
Slide 4: Contact and forward-looking statements
Please contact Ian Macoun on +61 2 8970 7700 if you require any further information. Yours faithfully Calvin Kwok General Counsel and Company Secretary calvin.kwok@pinnacleinvestment.com.au +61 2 8970 7718 Forward-looking statements This announcement includes certain forward-looking statements that
Slide 5: Interim Results For the period ended 31 December 2017
Interim Results For the period ended 31 December 2017 23 February 2018
Slide 6: Agenda
Agenda • First half FY18 Financial Highlights • First half FY18 Business Highlights • First half FY18 Results Discussion • Group Overview and Business Focus • Distribution Update • Summary and plans for the remainder of FY18 1
Slide 7: First half FY18 financial highlights
First half FY18 financial highlights • NPAT from continuing operations attributable to shareholders of $8.1 million up 170% from $3.0 million in prior corresponding period (PCP). • Diluted earnings per share from continuing operations of 5.0 cents up 138% from 2.1 cents in PCP • Pinnacle’s share of
Slide 8: First half FY18 business highlights
First half FY18 business highlights • Record FUM, FUM inflows and Affiliate Revenues • FUM at 31 December 2017 $32.3 billion (up $5.8 billion or 22% from $26.5 billion at 30 June 2017 and up $9 billion or 39% from $23.3 billion at 31 December 2016). • Retail FUM now $7.1 billion, up 39% from $5.1 bi
Slide 9: Funds Under Management – 31 December 2017
Funds Under Management – 31 December 2017 4
Slide 10: Funds Under Management – December 2017
Funds Under Management – 31 December 2017 Consistent growth in retail FUM over the medium term – currently 22% of total FUM 5
Slide 11: Funds Under Management – December 2017
Funds Under Management – 31 December 2017 Date Pinnacle Hyperion Plato Solaris RCL Palisade Antipodes Spheria Two Trees (total) ($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m) 31 Dec 17 32,338 6,056 4,644 6,618 6,552 1,585 6,261 596 26 30 Jun 17 26,526 5,877 4,003 5,135 5,956 1,514 3,830 211 - 31 Dec 1
Slide 12: Financial summary
Financial summary Composition of Group Results ($m) 1H2018 1H2017 • Strong growth in Pinnacle Pinnacle* 8.1 4.1 earnings Group overheads (Wilson Group) 0.0 (0.9) • Affiliate base management Profit before tax (PBT) from continuing operations 8.1 3.2 Minority Interests 0.0 (0.2) fees have increased by
Slide 13: Highlights of interim results
Highlights of interim results 1H2018 1H2017 Pinnacle Affiliates (100% aggregate basis) FUM ($billion) 32.3 23.3 • Continuing strong FUM and Revenue ($million) 70.5 52.3 revenue growth Net profit before tax 36.1 24.3 • Total Affiliates’ Revenues of Tax expense (10.7) (7.1) Net profit after tax 25.4 1
Slide 14: Significant components of 1H2018 results
Significant components of 1H2018 results • Reduction in ‘Pinnacle Parent’ operating loss o Total reduction of $2.1m on PCP, to a loss of $1.8m o Strong growth in distribution revenue (net of growth in cost) from Affiliates o Balanced by continuing medium term investment in Horizon 2 initiatives, e.g
Slide 15: A strong and flexible balance sheet
A strong and flexible balance sheet • $33m of cash and principal investments • Includes $24.6m invested in strategies managed by Pinnacle Affiliates • Excludes nearly $10m of cash applied for Affiliate equity recycling loans and Affiliate equity purchased • Pinnacle continues to support its Affiliat
Slide 16: Pinnacle Affiliates continue to win major industry Awards
Pinnacle Affiliates continue to win major industry Awards 2016 Morningstar Fund Manager of the Year Awards: • Hyperion – Australian Fund Manager of the Year • Hyperion – Domestic Equities Category Winner, Australia • Hyperion – Domestic Equities Small Caps Category Winner, Australia 2017 Lonsec/Mone
Slide 17: Continuing strong investment performance of Affiliates
Continuing strong investment performance of Affiliates 100% of Pinnacle Affiliated Investment Manager strategies and products (with a track record exceeding 5 years) have out performed their benchmarks over the 5 years to 31 January 2018 5Y 10Y Inception Inception date Pinnacle Investment Management
Slide 18: Affiliates' investment performance to 31 January 2018
Affiliates’ investment performance to 31 January 2018 Pinnacle Affiliates Performance to 31 Jan 2018 1Y 3Y 5Y 10Y Inception Inception date Pinnacle Investment Management Hyperion Asset Management - Gross Performance Hyperion Australian Growth Companies Fund 15.67% 8.77% 12.12% 8.90% 12.34% 1/10/2002
Slide 19: Affiliates' investment performance to 31 January 2018
Affiliates’ investment performance to 31 January 2018 Pinnacle Affiliates Performance to 31 Jan 2018 1Y 3Y 5Y 10Y Inception Inception date Pinnacle Investment Management Palisade Investment Partners - Gross Performance Palisade Diversified Infrastructure Fund 10.79% 13.20% 15.20% 10.54% 1/08/2008 Pa
Slide 20: Discussion of Business Focus
Discussion of Business Focus 15
Slide 21: Australia's leading multi-affiliate investment management firm
Australia’s leading “multi-affiliate” investment management firm Structure promotes independence, accountability, focus and longevity • Executives of both Pinnacle and Pinnacle Affiliates have significant equity interests • Equity ownership enhances alignment with shareholders Seed FUM and working c
Slide 22: Overview of Pinnacle Affiliates
Overview of Pinnacle Affiliates • Antipodes Partners – a pragmatic value manager of global equities (long only and long-short) o Funds under management have grown to in excess of $6.3 billion in approximately 2.5 years • Hyperion Asset Management – a specialist manager of Australian and Global equit
Slide 23: Overview of Pinnacle Affiliates (continued)
Overview of Pinnacle Affiliates (continued) • Resolution Capital – a specialist manager of Australian and Global listed real estate securities portfolios. o Funds under management grew to more than $6.5 billion. • Solaris Investment Management – a specialist manager of Australian equities following
Slide 24: Focus on managing the business to maximise profits and value
Focus on managing the business so as to maximise profits and Company value over the medium term • We continue to build Pinnacle by taking a medium term approach o Make decisions and release information when it is reliable and representative of ‘real’ or genuine trends o Selection process, quality co
Slide 25: Focus on managing the business to maximise profits and value
Focus on managing the business so as to maximise profits and Company value over the medium term • How does ‘Horizon 2’ add value in the Medium Term? o Investment in growth initiatives that don’t require additional capital to be raised o Reasonable limits to be set given short-term ‘drag’ on Pinnacle
Slide 26: Horizon 2 examples undertaken in last 12 months
Focus on managing the business so as to maximise profits and Company value over the medium term Horizon 2 examples undertaken in last 12 months: • Seeded Two Trees Global Macro Fund on 1 November 2017 with $5m o Promising discussions with early-stage investors • Established Dublin-domiciled UCITS fu
Slide 27: Focus on managing the business to maximise profits and value
Focus on managing the business so as to maximise profits and Company value over the medium term • Ongoing expansion of domestic distribution platform o Adding ‘capital markets’ expertise to accelerate launch of listed offerings (e.g. LICs, LITs, EQMFs) o Continued expansion of ‘internal wholesale’ t
Slide 28: Recap on Horizon Criteria – What could we acquire?
Recap on Horizon 3 Criteria – What could we acquire? Criteria • Must not place the Company at risk • Only consider if low risk and high return on capital • Exercise great care and careful due diligence • Must be synergistic with existing core • Few will meet this test Status • No (pure) Horizon 3 in
Slide 29: Evolution of Pinnacle's Distribution capability
Evolution of Pinnacle’s Distribution capability • Adapt o Grow ahead of our boutiques o Listen to clients and move quickly to meet their evolving needs o Do not become the market – be ahead of it • Resource o Growing adviser engagement – 15+ in retail o Direct (non advised & off platform) investment
Slide 30: Evolution of Pinnacle's Distribution capability
Evolution of Pinnacle’s Distribution capability • Traditional `intermediated retail’ distribution expertise expanded over time to include `direct and exchange traded’ o Intermediated (Financial Advisers) Private managed funds – Platform & Direct Exchange traded funds o Direct Private managed f
Slide 31: Progress to date – Platform and Reputation
Progress to date – Platform and Reputation • A platform for GROWTH o Continuing investment excellence o Widespread industry recognition and support o ‘Article of faith’ reputation • Increasing diversification • Proven ability to build high quality investment managers, and facilitate substantial succ
Slide 32: Summary and plans for the remainder of FY18
Summary and plans for the remainder of FY18 • Maintain current momentum and investment to deliver medium term growth • Maintain culture – attract exceptional individuals to our business and retain them • Continue to deliver growth within existing affiliates • Continue to assess high quality new affi
Slide 33: Disclaimer
Disclaimer • This presentation has been prepared by Pinnacle Investment Management Group Limited (PNI). The information in this presentation is current as at 23 February 2018. • This presentation is not an offer or invitation for subscription or purchase of securities or a recommendation with respec
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