Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — Keefe, Bruyette & Woods Investment Management & Specialty Finance Conference 2011
28 slides from Virtus Investment Partners's conference presentation, Jun 8, 2011
Slide 1: Keefe, Bruyette & Woods Investment Management & Specialty Finance Conference
Keefe, Bruyette & Woods Investment Management & Specialty Finance Conference June 8, 2011 Exhibit 99.1
Slide 2: Forward-looking statements
VIRTUS | INVESTMENT PARTNERS This presentation contains statements that are, or may be consideredto be, forward-looking statements. All statements that are not historical acts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The Private
Slide 3: Speakers
Speakers George R. Aylward President and Chief Executive Officer Michael A. Angerthal Executive Vice President and Chief Financial Officer
Slide 4: Introduction
Introduction LISTING NASDAQ: VRTS COMMENCED TRADING January 2, 2009 FIRST TRADE $9.00 CLOSING PRICE, JUNE 6, 2011 $57.01 COMMON SHARES OUTSTANDING (DILUTED) 6.9 million SERIES B CONVERT. PREF. 35,217 (Convertible to 1.3MM Common) MARKET CAPITALIZATION $471 million Fully converted, as of June 6, 2011
Slide 5: Virtus Value Proposition
Virtus Value Proposition Business Model • Multi-boutique manager, multi-strategy model • Broad investment capabilities from affiliates and subadvisers • Shared distribution and support services • Platform model that allows for new teams and firms Products • Diversified and balanced product set • Act
Slide 6: Business Model
Business Model Product Distribution Financial and Operating Attributes Multi-boutique manager, multi-strategy model Broad investment capabilities from affiliates and subadvisers Shared distribution and support services Platform model that allows for new teams and firms Business Model Products Distri
Slide 7: Virtus Brand
Virtus Brand We are unconstrained by a single investment approach. Rather, we provide access to independent, specialized investment philosophies through our multi-discipline, multi-strategy approach. We have the flexibility, agility and responsiveness of a boutique asset management firm with the pro
Slide 8: Multi-Boutique, Multi-Strategy Model
Multi-Boutique, Multi-Strategy Model Affiliates that comprise Virtus External subadvisers
Slide 9: Business Model: Products
Business Model Products Distribution Financial and Operating Attributes Diversified and balanced product set Active product management Strong relative performance Competitive mutual fund offerings
Slide 10: Diversified Product Set
Diversified Product Set Total AUM $31.9 billion $ in billions As of March 31, 2011
Slide 11: Active Product Management
Active Product Management Monitor performance and change or replace managers when needed Identify investment needs of clients and introduce new offerings Identify strong performing product capabilities that can benefit from our distribution Enhance and expand capabilities through fund adoptions
Slide 12: Strong Relative Performance
Strong Relative Performance PERFORMANCE AS OF MARCH 31, 2011 Mutual funds and institutional products All analysis excludes closed-end funds and money market products % of AUM Exceeding Benchmarks % of AUM in Top Half of Peer Category
Slide 13: Competitive Mutual Fund Offerings
Competitive Mutual Fund Offerings Load Waived Morningstar as of May 31, 2011 U.S. EQUITY Quality Small-Cap AlphaSector™ Rotation Core Equity Small-Cap Core Value Equity Growth & Income Mid-Cap Value Quality Large-Cap Value Small-Cap Sustainable Growth Strategic Growth Mid-Cap Growth ASSET ALLOCATION
Slide 14: Business Model: Distribution
Business Model Products Distribution Financial and Operating Attributes Multi-market distribution Broad and balanced retail distribution reach Well-defined value proposition Experienced retail sales force and effective strategy
Slide 15: Multi-Market Distribution
ATTRIBUTES CHANNELS RETAIL Segmentation Well-defined value proposition Diagnostic sales approach Metric driven accountability Wirehouse Regional Planners RIA DCIO / VIT INSTITUTIONAL Affiliate-centric Consultative approach Consultants Direct Multi-Market Distribution
Slide 16: Broad and Balanced Reach
Broad and Balanced Reach As of March 31, 2011 * Figures include both long-term mutual funds and sponsored managed accounts AUM BY FIRM* YTD SALES BY FIRM* $15.3 billion $2.3 billion
Slide 17: Well-Defined Value Proposition
Well-Defined Value Proposition One point access to a number of differentiated and diverse high quality boutique managers Assist financial advisors to gather, place and retain assets Utilize a consultative approach to help financial advisors better manage their book of business
Slide 18: Business Model: Financial Attributes
Business Model Products Distribution Financial and Operating Attributes Significant growth in assets, sales and net flows Bottom-line growth and margin expansion Solid balance sheet and capital flexibility Significant tax attributes
Slide 19: Assets Under Management
ASSETS UNDER MANAGEMENT $ in billions TOTAL CAGR – Reflects compound annual growth rate for Long-Term and Cash AUM from 12/31/08 to 3/31/11 LT CAGR – Reflects compound annual growth rate for Long-Term AUM from 12/31/08 to 3/31/11 Financial and Operating Attributes AUM DRIVERS Sales - $3.9 $5.8 $2.6
Slide 20: Revenues (in millions)
$ in millions Annualized Financial and Operating Attributes
Slide 21: Operating Income, As Adjusted
Financial and Operating Attributes OPERATING INCOME, AS ADJUSTED $ in millions See Appendix for Reconciliation from GAAP to Non-GAAP Reporting. Percentage of Revenues, as adjusted
Slide 22: Working Capital Trend
Financial and Operating Attributes Working Capital divided by annualized quarterly operating expenses $ in millions WORKING CAPITAL TREND 12/31/08 12/31/09 12/31/10 3/31/11 % of Spend 27% 25% 28% 27% Cash $51.1 $28.6 $43.9 $33.0 Debt $20.0 $15.0 $15.0 $15.0 Stockholders’ equity $36.6 $29.7 $48.3 $50
Slide 23: Federal Deferred Tax Asset Inventory
Financial and Operating Attributes $ in millions FEDERAL DEFERRED TAX ASSET INVENTORY COMPONENTS DEFERRED TAX ASSETS ORDINARY INCOME TAX SHIELD Net Operating Losses $10.4 $29.6 Intangible Assets 60.0 192.1 Subtotal-Ordinary Income Attributes $70.4 $221.7 Capital Losses $81.5 - Subtotal-Capital Incom
Slide 24: Key Attributes
Financial and Operating Attributes KEY ATTRIBUTES AUM (5/31/11) $5.2B Q1 2011 organic growth rate 49.0% Fee rate on internalized AUM 25 bps Run rate incremental revenue $12.8M Team members Annualized MULTI-SECTOR TEAM
Slide 25: Growth Opportunities
Growth Opportunities Product offerings – New strategies from existing managers – New products from existing strategies – New affiliated subadvisers and teams Distribution capabilities – Institutional market – Further retail penetration outside of wirehouses – Selective resource expansion Operational
Slide 26: Virtus Value Proposition
Virtus Value Proposition Multi-boutique manager, multi-strategy model Diversified and balanced product set Distribution through multiple channels with broad retail access Sales and profitability momentum Improved profitability by leveraging business model
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Slide 28: Appendix
Appendix Q1:09 Q2:09 Q3:09 Q4:09 Q1:10 Q2:10 Q3:10 Q4:10 Q1:11 Revenues, GAAP Basis $26,251 $27,181 $30,395 $33,325 $33,447 $34,788 $35,582 $40,739 $44,121 Less: Distribution and administration expenses 6,838 7,449 7,510 8,142 7,344 7,786 8,217 9,858 11,077 Revenues, as adjusted $19,413 $19,732 $22,