Westwood Holdings Group Inc · NYSE:WHG
Westwood — Investor Presentation (May 2014)
48 slides from Westwood's investor presentation, May 2, 2014
Slide 1: Westwood Holdings Group, Inc. Investor Presentation
Westwood Holdings Group, Inc. May 2, 2014 Investor Presentation Mark R. Freeman, CFA Chief Investment Officer, Senior Portfolio Manager
Slide 2: Slide 2
Slide 3: Agenda
Agenda I. Firm Overview II. Growth Opportunities III. Financial Highlights IV. Westwood Income Opportunity Strategy V. Disclosures
Slide 4: Firm Overview
WESTWOOD* Firm Overview
Slide 5: Westwood at a Glance
Westwood at a Glance Firm Overview • Asset management firm focused on Value & Income, Global & Emerging Markets strategies • Serving institutional, private client, and mutual fund investors since 1983 • Publicly traded since 2002 (NYSE : WHG) Financial Profile • 2013 Revenue: $92 million (1) • No de
Slide 6: Organization & Product Distribution
Organization & Product Distribution Westwood Holdings Group, Inc. Westwood International Westwood Management Westwood Trust Westwood Funds • Separately managed • Separately managed • Enhanced Balanced TM • Capped expense ratios portfolios portfolios asset allocation model • Institutional share class
Slide 7: Westwood Offerings
Westwood Offerings Product Mix Expanding with Non-U.S. & Specialized Offerings Total Firm Assets Under Management as of 3/31/14: $19.1B Domestic Equity Strategies SMidCap SmallCap SMidCap LargeCap AllCap Dividend Value * Value Value Plus+ Value Value Growth 1/1/02 1/1/04 7/1/10 1/1/87 7/1/02 11/1/93
Slide 8: Investment Product Performance
Investment Product Performance Delivered Excess Returns with Lower than Benchmark Risk Since Inception Returns Through 3/31/14 25% Westwood (Gross) Westwood (Net) Benchmark 20% 15% 10% 5% 0% LargeCap Value SMidCap Value* SmallCap Value AllCap Value Income Opportunity MLP Infrastructure Renewal Bench
Slide 9: Growth Opportunities
WESTWOOD* Growth Opportunities
Slide 10: Growth Opportunities
Growth Opportunities • Significant capacity remains in seasoned products • Private Wealth - Opportunity for substantial operating leverage - Cultivate new products - Expand private wealth platform • Subadvisory mandates in new markets - Access to broad distribution infrastructure & - Acquisition opp
Slide 11: Growth Opportunities Sub-Advisory Brands
Growth Opportunities Sub-Advisory Brands Required Disclosure: It is not known whether the listed clients approve or disapprove of the advisor or the advisory services provided. This is a list of clients whose investment management is a matter of public record, or have given us permission to use thei
Slide 12: Growth Opportunities – Westwood Funds
Growth Opportunities – Westwood Funds Mutual Funds Now Represent 16% of AUM Domestic Value & Income Strategies LargeCap SMidCap SmallCap Income Short Duration SMidCap Dividend Growth Value Plus+ Value Opportunity High Yield WHGMX WHGDX WHGLX WHGPX WHGSX WHGIX WHGHX International Strategies Emerging
Slide 13: Westwood Trust – Private Wealth
Westwood Trust – Private Wealth Focused on Organic Growth and Selective Acquisitions Comprehensive Allocation Strategy Continuity of Leadership Trust Services • Low cost, efficient solution • Randy Root, President Westwood Trust • Establishes long-term trust relationship Dallas (20 yrs) • Capable of
Slide 14: Westwood International Advisors
Growth Opportunities Westwood International Advisors Diversity • Internationally diverse team – 12 languages spoken fluently • Collectively lived or worked in 14 countries Experience • Global research coverage of all GICS sectors – developed and emerging economies • Average 18 years of industry expe
Slide 15: Westwood International Advisors Investment Team
Westwood International Advisors Investment Team Global Team with Impressive Track Record Team Members1 Sector Coverage Industry Experience Patricia Perez-Coutts, CFA – Senior Vice President, Portfolio Manager Lead Portfolio Manager 28 Years Thomas Pinto Basto, CFA – Vice President, Portfolio Manager
Slide 16: Westwood International Advisors Team
Westwood International Advisors Team Global Team with Impressive Track Record Portfolio Management – Implementation and Monitoring Patricia Perez-Coutts, CFA Thomas Pinto Basto, CFA Portfolio Manager – Emerging Markets, Global Equity Portfolio Manager – Global Dividend, Global Equity 28 Years Experi
Slide 17: WIA Portfolio Attributes
WIA Portfolio Attributes Emerging Emerging Global Global Emerging Markets Markets Plus Dividend Equity Markets SMid Target number of holdings 70-90 50-70 65-90 65-85 70 - 90 # of Holdings* 80 64 73 72 75 Positions at initiation 1.2 - 1.5% 1.6 - 1.8% 1.0 - 1.2% 1.2 - 1.5% 1.1 – 1.4% 30 countries 30 c
Slide 18: UCITS Fund
UCITS Fund (Undertakings for Collective Investment in Transferable Securities) • A Dublin-based UCITS fund was created to satisfy client demand from several UK based institutional clients • UCITS structure is similar to a mutual fund and can be marketed across the European Union and beyond • Our fir
Slide 19: Financial Highlights
WESTWOOD* Financial Highlights
Slide 20: 1Q14 Review
1Q14 Review Sequential Quarters Year over Year $19.1 $18.9 $19.1 $15.3 (1) AUM ($ in billions) 4Q13 1Q14 1Q13 1Q14 $25.3 $25.9 $25.9 $20.1 Total Revenues ($ in millions) 4Q13 1Q14 1Q13 1Q14 $8.9 $9.1 $8.9 Pretax Income $4.7 ($ in millions) 4Q13 1Q14 1Q13 1Q14 $0.76 $0.75 $0.75 GAAP EPS $0.38 (Dilute
Slide 21: Q1 2014 Highlights
Q1 2014 Highlights Assets Under • AUM increased 24% to $19.1 billion from $15.3 billion at March 31, 2013 Management • Westwood Funds TM AUM reached a record $3.0 billion AUM • Income Opportunity strategy, with its focus on producing a positive total return with lower Investment Strategies volatilit
Slide 22: Growth in Assets Under Management
Growth in Assets Under Management $19.1 Billion AUM at 3/31/14 Five-Year AUM Growth vs. S&P 500 $12.5 $10.0 AUM ($ billions) 300 $7.5 WHG AUM S&P 500 $5.0 250 Values Indexed to 100 at Mar 31, 2009 $2.5 Institutional $0.0 200 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 $4.5 $4.0 150 AUM ($ billions) $3
Slide 23: Financial Trends
Financial Trends Annual Asset-based Fees Annual Dividend & EPS ($ millions) $100.0 Annual Fee Revenue (1) $2.60 Earnings and Dividends $2.40 $90.0 $2.20 $80.0 $2.00 $70.0 $1.80 $1.60 $60.0 $1.40 $50.0 $1.20 $40.0 $1.00 $30.0 $0.80 $0.60 $20.0 $0.40 $10.0 $0.20 $0.0 $0.00 2009 2010 2011 2012 2013 200
Slide 24: Shareholder Value Creation
Shareholder Value Creation WHG vs. S&P 500 Market Capitalization Annual Dividends (1) 700 $14 600 $12 WHG Special Dividends S&P Quarterly Dividends 500 $10 Indexed to 100 at 7/31/02 400 $8 300 $6 200 $4 100 $2 - $0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2002 2003 2004 2005 2006
Slide 25: Track Record of Shareholder Value Creation
Track Record of Shareholder Value Creation Total Return Since 2002 WHG Spin-off Diamond Hill Investment Group, Inc. 3565% Virtus Investment Partners, Inc. 1805% WHG 690.1% Cohen & Steers, Inc. 358.8% Waddel & Reed Financial, Inc. 307.1% Eaton Vance Corp. 259.7% GAMCO Investors, Inc. 221.9% Artisan P
Slide 26: Westwood Income Opportunity Strategy
Westwood Income Opportunity Strategy
Slide 27: Income Opportunity Highlights & Differentiators
Income Opportunity Highlights & Differentiators Strategy Highlights Established January 1, 2003 Risk Focus Throughout Over $3 billion AUM Process Diversified portfolio of 40 – 70 securities Security selection Utilizes income securities from up to eight asset classes Portfolio 10% annualized return s
Slide 28: WMC Income Opportunity Return/Risk
WMC Income Opportunity Return/Risk January 1, 2003 to March 31, 2014 WMC Income 10-Year 3-Month NAREIT S&P 500 HFRI Equity Opportunity Treasury T-Bill Hedge Annualized Return 10.3% 4.5% 1.5% 11.5% 9.2% 6.5% Annualized Standard 8.17 8.73 0.87 24.83 16.12 10.24 Deviation Annualized Excess Return 8.7%
Slide 29: Income Opportunity Strategy Asset Allocation
(Includes Previous Qtr) Income Opportunity Strategy Asset Allocation 100% 5% 3% 5% 5% 5% 4% 7% 7% 7% 7% Cash 4% 5% 7% 13% 13% 90% 12% 6% 5% 14% 12% 8% 8% 3% 3% REITs 80% 7% 5% 17% 28% 17% 16% 14% 16% Fixed 70% 15% 39% 31% 2% 18% 37% Income 39% 11% 13% 9% % of Portfolio 60% 2% 15% Royalty 16% Trusts
Slide 30: Income Opportunity: MPT Statistics
Income Opportunity: MPT Statistics Since Inception As of March 31, 2014 Income 25/25/25/25 Opportunity Benchmark Annualized Rate of Return 10.3% 7.3% Returns Standard Deviation 8.26 9.11 Annualized Return: Annualized Return: Quarterly Maximum Return 12.8% 12.4% Up Quarters Down Quarters Returns 25 M
Slide 31: Disclosures
WESTWOOD* Disclosures
Slide 32: Forward – Looking Statements
Forward – Looking Statements Statements in this presentation that are not purely historical facts, including statements about our expected future financial position, preliminary estimates, results of operations or cash flows, as well as other statements including words such as “anticipate,” “believe
Slide 33: LargeCap Value Fund Disclosure
LargeCap Value Fund Disclosure This material must be preceded or accompanied by a current prospectus. Investors should read it carefully before investing or sending money. To determine if this Fund is an appropriate investment for you, carefully consider the Fund’s investment objectives, risk factor
Slide 34: LargeCap Value Disclosure Information
LargeCap Value Disclosure Information PERFORMANCE RESULTS: LARGECAP EQUITY COMPOSITE LARGECAP EQUITY January 1, 2001 through March 31, 2014 COMPOSITE RETURNS Reporting Currency: USD Creation Date: January 1994 Gross Net Russell 1000 Russell 1000 Return Return Value S&P 500 ANNUALIZED RETURNS Number
Slide 35: SMidCap Disclosure Information
SMidCap Disclosure Information* PERFORMANCE RESULTS: SMIDCAP COMPOSITE January 1, 2000 through March 31, 2014 Reporting Currency: USD Creation Date: July 1997 SMIDCAP EQUITY Russell COMPOSITE RETURNS Number Composite Russell 2500 2500 Value Composite Percentage Firm Gross Net Russell Russell of Inte
Slide 36: SMidCap Plus+ Disclosure Information
SMidCap Plus+ Disclosure Information PERFORMANCE RESULTS: SMIDCAP PLUS+ COMPOSITE July 1, 2010 through March 31, 2014 Reporting Currency: USD Creation Date: July 2010 SMIDCAP PLUS+ Russell Russell 2500 MidCap COMPOSITE RETURNS Russell Russell Number Composite Value Value Composite Percentage Firm Ru
Slide 37: SmallCap Value Disclosure Information
SmallCap Value Disclosure Information PERFORMANCE RESULTS: SMALLCAP VALUE COMPOSITE SMALLCAP VALUE January 1, 2004 through March 31, 2014 Reporting Currency: USD Creation Date: January 2004 COMPOSITE RETURNS Russell Number Composite Benchmark Composite Percentage Russell Gross Net 2000 of Internal 3
Slide 38: AllCap Value Disclosure Information
AllCap Value Disclosure Information PERFORMANCE RESULTS: ALLCAP VALUE COMPOSITE July 1, 2002 through March 31, 2014 ALLCAP VALUE Reporting Currency: USD Creation Date: July 2002 COMPOSITE RETURNS Russell Composite Benchmark Composite Percentage Firm Gross Net 3000 Value Number of Internal 3-Yr 3-Yr
Slide 39: Dividend Growth Disclosure Information
Dividend Growth Disclosure Information DIVIDEND GROWTH PERFORMANCE RESULTS: DIVIDEND GROWTH COMPOSITE COMPOSITE RETURNS January 1, 2001 through March 31, 2014 Reporting Currency: USD Creation Date: February 2003 Gross Net DJ US Select DJ US Return Return S&P 500 Dividend Dow Jones Number Composite S
Slide 40: LargeCap Socially Responsible Disclosure Information
LargeCap Socially Responsible Disclosure Information PERFORMANCE RESULTS: LARGECAP- SOCIALLY RESPONSIBLE COMPOSITE January 1, 2000 through March 31, 2014 SOCIALLY RESPONSIBLE COMPOSITE Reporting Currency: USD Creation Date: March 2008 COMPOSITE RETURNS Russell Percentage Composite Benchmark Composit
Slide 41: Income Opportunity Disclosure Information
Income Opportunity Disclosure Information PERFORMANCE RESULTS: INCOME OPPORTUNITY January 1, 2003 through March 31, 2013 INCOME OPPORTUNITY Reporting Currency: USD Creation Date: January 2003 COMPOSITE RETURNS 10 Yr Custom Custom Gross Net Libor 3 Mo Treas 10 Yr Number Composite Benchmark Libor Comp
Slide 42: MLP Disclosure Information
MLP Disclosure Information PERFORMANCE RESULTS: MLP INFRASTRUCTURE RENEWAL FUND COMPOSITE January 1, 2003 through March 31, 2014 Reporting Currency: USD Creation Date: July 2007 MLP COMPOSITE RETURNS Number Composite Benchmark Percentage Composite Percentage Firm Gross Net Alerian of Internal 3-Yr 3
Slide 43: Emerging Markets Disclosure Information
Emerging Markets Disclosure Information PERFORMANCE RESULTS: EMERGING MARKETS July 1, 2012 through March 31, 2014 Reporting Currency: USD Creation Date: July 2012 MSCI Emerging Number Composite Benchmark Composite Percentage Firm Gross Net Markets of Internal 3-Yr 3-Yr Assets of Firm Assets EMERGING
Slide 44: Emerging Markets Plus Disclosure Information
Emerging Markets Plus Disclosure Information PERFORMANCE RESULTS: EMERGING MARKETS PLUS July 1, 2012 through March 31, 2014 EMERGING MARKETS PLUS Reporting Currency: USD Creation Date: July 2012 COMPOSITE RETURNS MSCI Emerging Number Composite Benchmark Composite Percentage Firm MSCI Gross Net Marke
Slide 45: Emerging Markets SMid Disclosure Information
Emerging Markets SMid Disclosure Information PERFORMANCE RESULTS: EMERGING MARKETS SMID September 1, 2013 through March 31, 2014 EMERGING MARKETS SMID Reporting Currency: USD Creation Date: September 2013 COMPOSITE RETURNS MSCI Emerging Number Composite Benchmark Composite Percentage Firm MSCI Gross
Slide 46: Global Equity Disclosure Information
Global Equity Disclosure Information PERFORMANCE RESULTS: GLOBAL EQUITY July 1, 2012 through March 31, 2014 Reporting Currency: USD Creation Date: July 2012 Composite 3- Benchmark 3- Composite GLOBAL EQUITY Gross Net MSCI ACWI Number of Internal Yr Yr St Assets Percentage of Firm Assets Year Return
Slide 47: Global Dividend Disclosure Information
Global Dividend Disclosure Information PERFORMANCE RESULTS: GLOBAL DIVIDEND July 1, 2012 through March 31, 2014 Reporting Currency: USD Creation Date: July 2012 MSCI Number Composite Benchmark Composite Percentage Firm Gross Net ACWI of Internal 3-Yr 3-Yr Assets of Firm Assets Year Return Return Ind
Slide 48: www.westwoodgroup.com
www.westwoodgroup.com 200 Crescent Court • Suite 1200 • Dallas, Texas • 75201 T. 214.756.6900
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