RM Infrastructure Income PLC GBP · LSE:RMII
RM Infrastructure Income PLC GBP — RM Infrastructure Bond Fund — Investor Presentation (April 2024)
40 slides from RM Infrastructure Income PLC GBP's investor presentation, Apr 23, 2024
Slide 1: RM Infrastructure Bond Fund Q2 2024 Presentation
RM Infrastructure Bond Fund RM Infrastructure Bond Fund Q2 2024 Presentation Institutional Investors Only
Slide 2: Disclaimer
Disclaimer This presentation (“Presentation”) is an advertisement and not a prospectus for the purposes of EU Directive 2003/71/EC or Part VI of the Financial Services and Markets Act 2000 ("FSMA"). Investors should not subscribe for shares referred to in this Presentation except on the basis of inf
Slide 3: In this Presentation
In this Presentation About RM Funds: Page 4 Firm Overview Senior Leadership Fund & Strategy Overview: Page 7 Investment Objectives Investible Universe Appendix 1: Page 14 Market Conditions Model Portfolio Construction Simulated Fund Performance Market Outlook Appendix 2: Page 20 Investment Process A
Slide 4: About RM Funds
About RM Funds ▪ Firm Snapshot ▪ Senior Leadership 4
Slide 5: About RM Funds
About RM Funds RM Funds is a specialist in alternative investment VT RM Alternative Income fund ratings management ▪ RM was founded in 2010. ▪ Award winning – Alternative Credit Fund Manager of the Year 2017 and 2018. Runner-up 2019. ▪ Offices in London and Edinburgh. ▪ RM currently manages: – Publi
Slide 6: RM Funds – Senior Leadership
RM Funds – Senior Leadership Fund Management Leadership James Robson Investment Team Experience Portfolio Manager, Investment Committee Member ▪ Investment Team focused on Liquid and Illiquid alternative securities/assets ▪ Former Head HSBC Corporate Credit Trading ▪ Team based on a pool system – st
Slide 7: Fund & Strategy Overview
Fund & Strategy Overview ▪ About the Fund ▪ Key Investment Themes ▪ Portfolio ▪ Fund Performance ▪ Outlook 7
Slide 8: SVS RM Infrastructure Bond Investment Objectives
SVS RM Infrastructure Bond Investment Objectives The SVS RM Infrastructure Bond Fund (the “Fund”) launches in June 2023. ▪ Objectives: ▪ Investment objective to target an income return greater than SONIA ▪ Low management fee, 0.45% F Class ▪ Soft Targets: ▪ Capital preservation, volatility target <5
Slide 9: Regulated Infrastructure
Regulated Infrastructure Regulated infrastructure SUMMARY STATISTICS ▪ Provision of essential services which cannot be easily or efficiently replicated. £198billion ▪ Highly regulated to reduce likelihood of market failures – protect consumers whilst ensuring estimated to have been spent on renewabl
Slide 10: Fundamental Analysis – Electricity Transmission & Distribution
Fundamental Analysis – Electricity Transmission & Distribution • Critical infrastructure, predictable revenues, government support Transmission • UK Electricity Transmission is run by four companies. ➢ Long-distance x High-Voltage • UK Electricity Distribution is divided into 14 regions and operated
Slide 11: Fundamental Analysis - SSE PLC
Fundamental Analysis - SSE PLC Bonds Preferred Holdco Bonds SSE PLC Summary Stats Drawn Loans SSE PLC Undrawn Loans SSELN 3.74 PERP GBP600MM • SSE’s business model encompasses the full Drawings Unknown energy lifecycle – from generation to • Currency: GBP transmission and distribution. Scottish & SS
Slide 12: Offshore Transmission Owners (OFTOs)
Offshore Transmission Owners (OFTOs) Key Characteristics GMOFTO 2.778 02/17/34 TCDUDG 3.158 11/12/38 GGOFTO 4.137 11/29/32 • OFTOs are responsible for owning, operating and maintaining the infrastructure that connects Amount Outstanding: £197m offshore wind farms to onshore grids. Amount Outstanding
Slide 13: Social Infrastructure
Social Infrastructure Social Infrastructure ▪ Vital infrastructure assets occupied by people during their life cycle – physical real estate providing social SUMMARY STATISTICS services to communities. 3.8m estimated ▪ Typically, local government, NHS or highly granular cashflows offer contracted and
Slide 14: Fundamental Analysis – Social Infrastructure
Fundamental Analysis – Social Infrastructure PHP Summary Stats Aspire Defence Summary Stats Leading investor in modern primary healthcare real-estate in the UK & Ireland Aspire Defense is an SPV set up to deliver the PHP 2.875 07/15/25 35-year Project Allenby Connaught which build • 512 Properties •
Slide 15: Economic Infrastructure
Economic Infrastructure Economic Infrastructure ▪ Infrastructure focused on the movement of people, products and data – a broad opportunity set SUMMARY STATISTICS providing the greatest exposure to GDP-linked returns. ▪ Attractive growth rates across core sectors, underpinned by population increases
Slide 16: Fundamental Analysis – Associated British Ports (ABP)
Fundamental Analysis – Associated British Ports (ABP) Associated British Ports – SUMMARY STATS • Seaport owner-operator handling c. £150billion of UK trade annually (c.25% of the UK’s seaborne trade) • Revenues generated from long-dated rental agreements, harbour pilotage, and conservancy services •
Slide 17: Appendix: Portfolio Overview
Appendix 1 Portfolio Overview ▪ Market overview ▪ Allocations process ▪ Model portfolio ▪ Simulated fund performance ▪ Market & portfolio outlook 17
Slide 18: Macro-Economic Conditions
Macro-Economic Conditions UK GILTS & US Treasury Yield Curves (%) Credit Spread Indices (bps) 800 200 5.20% Yield curve shape 180 700 5.00% ▪ Inverted – cause for concern as this usually 160 4.80% 600 predicates a recession 4.60% 140 ▪ Indicates tighter credit conditions as short 4.40% 500 120 dated
Slide 19: Allocation Process
Allocation Process ▪ Defined and structured approach to risk taking Investment Guidelines: ▪ Issuer Limit 10% ▪ No Illiquid Holdings/Securities ▪ Clear risk profile grading system for investor communication ▪ <5% crossover in portfolio ▪ Issue Limit 5% holdings with RMAI ▪ >70% portfolio issuers IG
Slide 20: Dynamic Changes in the Portfolio: 10-months since inception
Dynamic Changes in the Portfolio: 10-months since inception Q3 2023 Q4 2023 Q1 2024 Q2 2024 Positioning Positioning Positioning Positioning July +0.92% NAV monthly ret. October +0.39% NAV monthly ret. January -0.28% NAV monthly ret. April -0.55% NAV monthly ret. • Further yield curve steeping as lon
Slide 21: Current Portfolio Positioning
Current Portfolio Positioning Portfolio Statistics ▪ Running Yield: 5.52% ▪ Economic Infrastructure: 30% ▪ Top #10 Exposure: c.39.8% ▪ Distribution Yield*: 5.89% ▪ Regulated Infrastructure: 31% ▪ # of Holdings: 30 ▪ Option Adjusted Duration: 6.16 years ▪ Social Infrastructure: 15% ▪ YTW: 5.52% ▪ Gil
Slide 22: Actual Fund Performance (15th June 2023 – 7th May 2024)
Actual Fund Performance (15th June 2023 – 7th May 2024) RM Infrastructure Bond Fund 110.00 Performance since Inception 109.00 108.00 107.00 106.00 105.00 104.00 103.00 102.00 101.00 100.00 99.00 98.00 RM Infrastructure Bond Fund (F-Class Acc) IA Sterling Strategic Bond p p p p p p 22
Slide 23: Fund Performance vs iShares GBP Core Corp Bond ETF
Fund Performance vs iShares GBP Core Corp Bond ETF • Since inception: • Volatility: 2.91% • Correlation with SLXX: 0.45 • 38.86% of the RM IBF corporate bond universe overlaps with the iShares GBP Corp Bond UCITS ETF • Lower volatility combined with the defensive nature of the sector significantly d
Slide 24: Volatility Tracker
Volatility Tracker Monthly volatility vs IA Sterling Strategic Peers1 Peers are selected from those IA 10.00% Sterling Strategic Bond Funds within a 9.00% performance band 1% higher or lower of RM Infrastructure Bond Fund on a 8.00% last 6-months basis. volatility 30-day avereage 7.00% Source: RM Fu
Slide 25: Sharpe Ratio vs IA Sterling Strategic Bond Peers
Sharpe Ratio vs IA Sterling Strategic Bond Peers Sharpe Ratio vs Peers (Last 6-months) Artemis High Income Jupiter Monthly Income Bond Royal London Sterling Extra Yield Bond Schroder Strategic Bond SVS RM Infrastructure Bond Fund Rathbone Strategic Bond Fund Invesco Sterling Bond abrdn Strategic Bon
Slide 26: Market & Portfolio Outlook
Market & Portfolio Outlook ▪ 2024 H1 Outlook ▪ Overall economic conditions will slow due to tighter financial conditions seen over 2023. ▪ Expect government bond yields to be lower over the 2024 year and credit spreads wider. ▪ UK Gilt Curve will steepen. ▪ Fund Positioning: ▪ Volatility in rates an
Slide 27: Summary
Summary RM Funds designed the SVS RM Infrastructure Bond Fund to generate income linked to SONIA and modest capital growth. ✓ Defensive sector focus - the only fund in IA Sterling Strategic Bond sector dedicated to thematic infrastructure investing. ✓ Bond investments seek to reduce volatility whils
Slide 28: Appendix: Investment Process Overview
Appendix 2 Investment Process Overview ▪ 360 degrees investment Process ▪ Macro analysis ▪ ESG ▪ Fundamental analysis ▪ Technical analysis ▪ Execution ▪ Monitoring 28
Slide 29: 360° Investment Process
360° Investment Process ▪ Top-down macro view to identify key investment themes – supports Rigorous investment process, allocation strategy. Macro & with a focus on both top-down Thematic and bottom-up analysis to Top-Down support investment decisions. ▪ Idea-led fundamental bottom-up Analysis analy
Slide 30: Macro Analysis & Review
Macro Analysis & Review Investment Team Time: up to 25% Key Metrics: ▪ GDP ▪ Payrolls ▪ Housing Sales/Starts etc ▪ Interest Rate Expectations ▪ Inflation Expectations ▪ Cyclical macro factors Why? ▪ Macro-economic information is a key determinant of monetary policy. ▪ Direction of travel for inflati
Slide 31: ESG Review
ESG Review Investment Team Time: c.5% Key Metrics: ▪ C.100 metrics we monitor via RM bespoke DDQ ▪ UN Sustainable Development Goals ▪ Specific areas include: suitability management, environmental impact, labour practices, health & safety, diversity & inclusion, supply chain management, leadership &
Slide 32: Fundamental Analysis
Fundamental Analysis Investment Team Time: Up to c.50% Management Experience, Three tasks in order driven by macro & thematic: Alignment, ▪ Sectoral analysis and selection Transparency ▪ Issuer analysis and selection ▪ Specific issue analysis and selection Issuer analysis: ▪ Management: Board, Gover
Slide 33: Liquidity, Technical Factors & Portfolio Construction
Liquidity, Technical Factors & Portfolio Construction Investment Team Time: c.20% Critically important as all over-the-counter securities. MIFID II has improved price visibility – however, investment manager and firm DNA based around secondary trading of credit products: Key liquidity counterparties
Slide 34: Post-Investment Monitoring
Post-Investment Monitoring Investment Team Time: ongoing as part of fundamental analysis Key Metrics: ▪ Various metrics, fundamentally leverage and interest rate risk, but sectoral specific considerations, for example: ▪ For Economic infrastructure: GDP-linkage, asset life, demand trajectory. ▪ For
Slide 35: Stewardship
Stewardship Our Approach: ✓ ESG Incorporation ✓ ESG is integrated into our investment process ✓ Active Ownership / Stewardship ✓ We engage with Boards and stakeholders to drive disclosure. ✓ In the public companies we invest-in, we advocate for gender representation, sustainability and action on the
Slide 36: Appendix: Summary Information
Appendix 3 Summary Information ▪ Summary ▪ Fund Terms ▪ Contact Details 36
Slide 37: Summary
Summary RM Funds designed the SVS RM Infrastructure Bond Fund to generate income linked to SONIA and modest capital growth. ✓ Defensive sector focus - the only fund in IA Sterling Strategic Bond sector dedicated to thematic infrastructure investing. ✓ Bond investments seek to reduce volatility whils
Slide 38: Fund Information
Fund Information Key Term Details Distributions: Quarterly in arrears Share Classes: Income & Accumulation available Currency: GBP £5m Founder / Top-up £25 Min Investment: £10,000 Institutional / Top-up £25 Valuation / Trading: Daily Institutional: 0.55% Annual Management Charges “AMC” Founder Class
Slide 39: Contact Information
Contact Information Investment Management Distribution James Robson James.robson@rm-funds.co.uk James Satterthwaite: james.satterthwaite@rm-funds.co.uk Pietro Nicholls Pietro.nicholls@rm-funds.co.uk David Watts: David.watts@rm-funds.co.uk Head Office: 4th Floor, 7 Castle Street, Edinburgh, EH2 3AH L
Slide 40: Registered in Scotland No SC380707 Registered Office: 7 Castle Street, Edinburgh, EH2 3AH RM
Registered in Scotland No SC380707 Registered Office: 7 Castle Street, Edinburgh, EH2 3AH RM Capital Markets Limited is authorised and regulated by the Financial Conduct Authority (Number 562209)
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