Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — Investor Presentation (March 2023)
21 slides from Virtus Investment Partners's investor presentation, Mar 31, 2023
Slide 1: Virtus KAR Emerging Markets Small-Cap Fund
VIRTUS KAR EMERGING MARKETS SMALL-CAP FUND March 31, 2023
Slide 2: Important Risk Considerations
IMPORTANT RISK CONSIDERATIONS Equity Securities The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small, medium, or large-sized companies may enhance that risk. Foreign & Emerging Investing in f
Slide 3: Virtus Investment Partners Multi-Asset Manager
VIRTUS INVESTMENT PARTNERS MULTI-ASSET MANAGER KEY FACTS AFFILIATED $154.8 Billion in AUM1 3 3 3 30 Funds Rated 4 or 5 Stars2 UNAFFILIATED 4 Past performance is not indicative of future results. As of 3/31/23. 1Excludes AUM of AlphaSimplex, which the company acquired on April 1, 2023. 2Based on inst
Slide 4: Kayne Anderson Rudnick Profile
KAYNE ANDERSON RUDNICK PROFILE At a Glance Originally established to manage founder capital Year Founded: 1984 Over three decades of experience Headquarters: A differentiated “business analyst” investment approach focusing on Los Angeles, CA high-quality businesses** AUM: $51.4 billion*
Slide 5: Emerging Markets Small-Cap Team
EMERGING MARKETS SMALL-CAP TEAM Portfolio Manager/Analysts Responsibility Research Experience Years with KAR Douglas S. Foreman, CFA Chief Investment Officer 37 Years 12 Years Hyung Kim Portfolio Manager & Senior Research Analyst 19 Years 6 Years Craig Thrasher, CFA Portfolio Manager & Senior Resear
Slide 6: Why Emerging Markets Small Cap?
WHY EMERGING MARKETS SMALL CAP? True Emerging Markets Exposure More Inefficient Within large cap EM, KAR sees many companies that generate Large and less efficient opportunity set the majority of its revenue outside of emerging markets. In addition, there is a high concentration of companies tha
Slide 7: Kayne Anderson Rudnick Tenets of Quality
KAYNE ANDERSON RUDNICK TENETS OF QUALITY QUALITATIVE BUSINESS ASSESSMENT Competitive Protection Owner-Oriented Management Brand/Reputation Cultivates Competitive Advantage Network Effect Rational Capital Allocation Scale/Cost Advantage Considers Stakeholder Interests Benchmarking Stand
Slide 8: High-Quality Universe Development
HIGH-QUALITY UNIVERSE DEVELOPMENT Kayne Anderson Rudnick develops its For every company KAR looks at, a business high-quality universe in a number of ways quality score from 1- 4 is assigned Quantitative Screens Criteria High return on capital over a full economic cycle Competitive protection
Slide 9: Intensive Fundamental Research
INTENSIVE FUNDAMENTAL RESEARCH KAR Research Analysts and Portfolio Managers Work Together to Develop In-depth Business Knowledge Qualitative Analysis Financial Analysis ESG Analysis* Purpose: Determine if competitive Purpose: Evaluate source, level, and Purpose: Evaluate financially material advanta
Slide 10: Investment Process: ESG Principles
INVESTMENT PROCESS ESG PRINCIPLES Policy KAR believes that responsible investment practices which incorporate the consideration of environmental, social, and governance (ESG) topics add sustainable value for its investors and are consistent with its fiduciary duty. Philosophy KAR’s investment strate
Slide 11: Investment Process: ESG Principles
INVESTMENT PROCESS ESG PRINCIPLES KAR uses a proprietary ESG ratings framework to generate ESG scores for businesses in its portfolios as well as portfolio scores. ESG research is conducted by each member of the investment team Five key issues identified that KAR believes are the most material a
Slide 12: Portfolio Construction
PORTFOLIO CONSTRUCTION Investment Guidelines Sell Discipline Position Weights Extended Valuation Typically 30-60 holdings Significant premium to intrinsic value Expected annual return insufficient Maximum initial position size is 5% (at cost) Maximum position size is 10% (at market) Portfo
Slide 13: Risk Management and Portfolio Monitoring
RISK MANAGEMENT AND PORTFOLIO MONITORING Risk Management Portfolio Monitoring Investment Philosophy CIO/PM Meetings Focus on “high-quality” companies Chief Investment Officer and the Portfolio Managers Company’s “business risk” is primary risk control factor meet to review, discuss, and explai
Slide 14: Portfolio Characteristics
PORTFOLIO CHARACTERISTICS Virtus KAR MSCI Emerging Emerging Markets Markets Small Small-Cap Cap Index Quality Fund (net) Return on Equity—Past 5 Years 19.6% 12.8% In a market of average businesses, KAR seeks to own protected proprietary businesses that generate exceptional Total Debt/EBITDA* 0.6 x 1
Slide 15: Sector Allocations
SECTOR ALLOCATIONS Virtus KAR Emerging Markets Small-Cap Fund (VIESX) MSCI Emerging Markets Small Cap Index (net) 36.1% 17.3% 17.6% 16.3% 14.3% 13.9% 10.1% 10.5% 10.3% 9.3% 9.2% 7.1% 6.7% 6.5% 4.0% 3.9% 3.1% 2.0% 2.0% 0.0% 0.0% 0.0% Industrials Communication Information Consumer Consumer Financials
Slide 16: Country Allocations
COUNTRY ALLOCATIONS Virtus KAR Virtus KAR Emerging MSCI Emerging MSCI Markets Emerging Markets Emerging Small-Cap Markets Small Small-Cap Markets Small Country Fund Cap Index (net) Difference Country Fund Cap Index (net) Difference Brazil 13.6 5.0 8.6 Russia 0.0 0.0 0.0 Poland 12.7 1.1 11.6 Saudi Ar
Slide 17: Top Ten Holdings
TOP TEN HOLDINGS Holding Sector Country % of Portfolio Grupa Pracuj SA Industrials Poland 5.7 Boa Vista Servicos SA Industrials Brazil 4.6 Tegma Gestao Logistica SA Industrials Brazil 4.4 Baltic Classifieds Group PLC Communication Services United Kingdom 4.3 Union Auction PCL Consumer Discretionary
Slide 18: Performance Review
PERFORMANCE REVIEW AS OF MARCH 31, 2023 (%) MORNINGSTAR RATINGSTM Diversified Emerging VIESX Index I Share Markets 20.68 Time Period # of Stars # of Funds Overall ★★★★★ 744 12.22 3 Year ★★★★ 744 6.67 6.67 5.19 3.96 5 Year ★★★★★ 654 3.87 3.87 3.31 1.80 Morningstar ratings are based on risk-adjusted r
Slide 19: Virtus KAR Equity Funds
VIRTUS KAR EQUITY FUNDS Quality-Driven Strategies Across Market Caps and Borders Kayne Anderson Rudnick’s investment philosophy is rooted in quality, with a focus on wealth preservation. Decades of management experience has yielded a rigorous definition of quality, which guides where the firm invest
Slide 20: Definitions
DEFINITIONS QUALITY Return on Equity - Past 5 Years—relates how well the company is using the money invested in it so that it can bring a return to its investors. A high portfolio ROE indicates that the portfolio is invested in historically profitable companies. Total Debt/EBITDA—is calculated by di
Slide 21: About Virtus
Virtus (NASDAQ: VRTS) is a distinctive partnership of boutique investment managers, singularly committed to the long-term success of individual and institutional investors. We are not constrained by a single investment approach; rather, we provide access to independent, specialized investment phil
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