Gresham House Energy Storage Fund Plc GBP · LSE:GRID
Gresham House Energy Storage Fund Plc GBP — Gresham House — H1 2019 Earnings Presentation
41 slides from Gresham House Energy Storage Fund Plc GBP's earnings presentation, September 2019
Slide 1: Gresham House plc Interim Report and Accounts
GRESHAM HOUSE PLC INTERIM REPORT AND ACCOUNTS Six months to 30 June 2019 September 2019
Slide 2: Presentation Team
PRESENTATION TEAM TONY DALWOOD, CHIEF EXECUTIVE KEVIN ACTON, FINANCE DIRECTOR ▪ Leads the Group and is Chairman of ▪ Oversees the Group finance function the Investment Committee, overseeing for Gresham House plc, including balance sheet capital allocation divisional entities ▪ Background in fund man
Slide 3: Contents
CONTENTS INTRODUCTION ……………………………………………………………………………………………………. 4 ▪ SPECIALISTS IN ALTERNATIVES ▪ INTERIMS SUMMARY ▪ ASSET ALLOCATION TO ALTERNATIVES 2019 INTERIM RESULTS…………………………………………………….…………………………………….. 8 ▪ FINANCIAL HIGHLIGHTS ▪ INCOME STATEMENT - CONTINUED PROFITABILITY ▪ BALANCE SHEET - SIGNIF
Slide 4: Introduction
INTRODUCTION
Slide 5: Specialists in Alternatives
SPECIALISTS IN ALTERNATIVES Gresham House is an AIM-quoted specialist alternative asset management group (GHE.LN), providing funds, direct investments and tailored investment solutions, including co-investment. ▪ Specialist in five areas of alternative investment ▪ Growing organically and through ac
Slide 6: Interims Summary
INTERIMS SUMMARY SIX MONTHS TO 30 JUNE 2019 ▪ Organic growth in AUM of £183m to £2.5bn “Continued organic growth and (2018: £2.3bn) integration alongside significant strategic investment in our platform.” ▪ Revenue growth of 209% to £15.3m (H1 2018: £4.9m) ▪ Adjusted operating profit grown to £4.4m
Slide 7: Asset Allocation to Alternatives
ASSET ALLOCATION TO ALTERNATIVES Last 3 years Strong growth expected for Next 3 years most alternative asset classes. Gresham House specialism Average annual growth rate (%) Changes in broad strategic asset allocation for UK Pension Plans 2003-2019. 26% Alternatives and Real Estate 1% Chart 1 https:
Slide 8: 2019 Interim Results
2019 INTERIM RESULTS
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS 2019 INTERIMS ASSETS UNDER ▪ 8% AUM increase to £2.5bn MANAGEMENT (£M AS AT) £2,450M – 2018: £2.3bn 30 JUN 2019 2,450 +8% ▪ 31 DEC 2018 2,268 209% revenue growth to £15.3m – H1 2018: £4.9m ▪ Adjusted operating profit1 REVENUE increased to £4.4m (£M FOR THE SIX MONTHS TO JUNE) £1
Slide 10: Income Statement
INCOME STATEMENT CONTINUED PROFITABILITY Income Statement 2019 2018 ▪ Revenue growth of 209% for six months to 30 June £m £m ▪ First full period of revenues from Income 15.3 4.9 FIM and Livingbridge businesses Administrative overheads (excl. Amortisation, Depreciation and Exceptional items) (10.6) (
Slide 11: Balance Sheet
BALANCE SHEET SIGNIFICANT CASH & REALISABLE ASSETS Balance Sheet Jun-19 Dec-18 ▪ Strong gross cash position of as at end of month £m £m £15.8m Assets ▪ Tangible and realisable assets of Investments1 20.4 17.8 - 1.0 £36.3m, well-positioned for growth Accrued income - Persimmon Cash 15.8 14.0 ▪ Partia
Slide 12: Growth & Strategic Priorities
GRESHAM HOUSE GROWTH & STRATEGIC PRIORITIES
Slide 13: 2019 Strategic Priorities Update
2019 STRATEGIC PRIORITIES UPDATE Strategic priority Status Progress to date GRID - £50m new placing of shares (30 June 2019) and £15m ✔ post-period end ➖ BSIF - continued portfolio deployment and fundraising in H2 Forestry - delivery of £94m acquisition and fundraising, plus ✔ international expansio
Slide 14: Brexit and Beyond
BREXIT AND BEYOND BREXIT HAS BOTH POSITIVE AND NEGATIVE IMPACTS ON THE GROUP Positive ▪ Brexit has led to a weakening of sterling, which has benefited UK timber prices for UK growers ▪ Potential trade tariffs with a ‘hard’ Brexit would further increase the pricing of UK timber ▪ Gresham House equity
Slide 15: Conclusion
CONCLUSION POSITIONED FOR CONTINUED GROWTH ✅ Organic growth and capitalisation of acquisitions driving shareholder value ✅ Profitability on track, margins improving towards medium to long-term targets ✅ Identified synergies of over £1m captured ✅ Strong balance sheet - £16m cash and debt fully repai
Slide 16: Appendix
APPENDIX 16
Slide 17: Gresham House plc Shareholdings
GRESHAM HOUSE PLC SHAREHOLDINGS Board / Management / Directors / Investment Committee & Advisory Group members circa 9%1 The Royal County of Berkshire Pension Fund 16.3 Lion Trust Asset Management 7.9 Majedie Asset Management 7.8 Mr Richard C Dawson 5.4 Aberdeen Standard Investments 5.0 Schroder Inv
Slide 18: Management Committee
GRESHAM HOUSE MANAGEMENT COMMITTEE Tony Dalwood Kevin Acton Chief Executive Officer, Gresham House plc Finance Director, Gresham House plc Tony is an experienced investor and adviser to public and private equity Kevin is Finance Director for Gresham House plc and has over 17 businesses. Tony establi
Slide 19: Investment Committee
GRESHAM HOUSE INVESTMENT COMMITTEE Tony Dalwood Bruce Carnegie-Brown Investment Committee (Chairman) Investment Committee Tony is an experienced investor and adviser to public Bruce is Chairman of Moneysupermarket.com and private equity businesses. Tony established SVG Group plc and of Lloyd’s of Lo
Slide 20: Key Managers
GRESHAM HOUSE KEY MANAGERS Graham Bird Ken Wotton Managing Director, Strategic Public Equity Managing Director, Quoted Investment Graham leads the Strategic Public Equity strategy alongside Ken joined in November 2018, having spent 11 years Tony Dalwood. He is experienced in fund management and lead
Slide 21: Non-Executive Board
GRESHAM HOUSE NON-EXECUTIVE BOARD Anthony Townsend Simon Stilwell Non-Executive Director (Chairman) Non-Executive Director Anthony has spent over 40 years working in the City and was chairman Simon joined the Company as non-executive director on 18 of the Association of Investment Companies (2001-20
Slide 22: Advisory Group
GRESHAM HOUSE ADVISORY GROUP Sir Roy Gardner Sir Laurie Magnus Sir Roy is Chairman of Serco plc and Senior Independent Sir Laurie Magnus is a Senior Advisor to Evercore Director of Mainstream Renewable Power Ltd. Previously, Europe investment banking. Sir Laurie was previously he was Chairman of Mai
Slide 23: Growth Timeline
GROWTH TIMELINE DELIVERED AUM GROWTH THROUGH A COMBINATION OF ORGANIC AND ACQUISITION GROWTH Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Organic Acquisition December 2014: New management buy-in team appointed. November 2015: Acquired Aitchesse Ltd. the UK leading forestry a
Slide 24: Investment Capabilities
INVESTMENT CAPABILITIES Target IRR / Target Distribution Inflation Contractual Investment Investment capability Structure Total Return income % cycle linkage cash flows term Real Assets Housing & Infrastructure (BSIF) LP 8-10% Total Return 5.0-6.0% Quarterly2 ✔ - 12 years Forestry LP 7.0% IRR 2.1%1
Slide 25: Gresham House plc - The Growth Story
GRESHAM HOUSE PLC - THE GROWTH STORY 2018 Results AUM £2.3bn and maiden dividend announced 2017 Results AUM £649m Run-rate profitable Sale of final legacy property AUM £1.6bn GRID Placing asset - Newton-le Willows. Programme Qualify for IHT relief £65m raised May-July First close of Strategic Propos
Slide 26: Strategic Equity
STRATEGIC EQUITY
Slide 27: Strategic Public Equity
GRESHAM HOUSE STRATEGIC PUBLIC EQUITY Targets investment opportunities in which the manager Relative performance vs FTSE small cap and All-Share1 believes there are value-creation opportunities through strategic, management and operational changes and 15% IRR over the medium term. Key characteristic
Slide 28: LF Gresham House UK Micro Cap Fund
LF GRESHAM HOUSE UK MICRO CAP FUND A high-conviction, concentrated fund, seeking to deliver Total Return Bid-Bid line chart (from 31 December 2013 to 30 June risk-adjusted returns with low correlation to its peer group 2019), of LF Gresham House UK Micro Cap Fund (A) and IA UK Smaller Companies Sect
Slide 29: LF Gresham House UK Multi Cap Income Fund
LF GRESHAM HOUSE UK MULTI CAP INCOME FUND Seeking risk-adjusted returns and low correlation to its Total Return Bid-Bid line chart (from 31 December 2017 – 30 June peers through a focus on income yield and fundamentals- 2019), of LF Gresham House UK Multi Cap Income Fund and IA UK Equity Income Sect
Slide 30: Private Assets
GRESHAM HOUSE PRIVATE ASSETS LMS Capital plc is targeting equity total returns on new Valuation opportunity capital invested over the long term of between 12% and 15% per annum after running costs. 1. NAV per share is 73.3p1. LMS Capital share price trades at c.33.3% discount2 Key characteristics 2.
Slide 31: Real Assets
REAL ASSETS
Slide 32: Housing & Infrastructure
GRESHAM HOUSE HOUSING & INFRASTRUCTURE Providing investors with exposure to structurally Current target portfolio sub-sector mix2 important sectors to the UK economy. Key characteristics 1. Our strategy targets an 8-10% annual net return including an income yield of 5-6% p.a.1 2. Focus on sub £50m i
Slide 33: Forestry
GRESHAM HOUSE FORESTRY The UK’s leading commercial forestry investment Market opportunity manager with c.130,000 hectares of managed forests. 1. UK a captive market for timber, importing c.80% of total timber requirement Key characteristics 2. UK Timber industry valued at over £8.5 billion by Office
Slide 34: New Energy
GRESHAM HOUSE NEW ENERGY Targets generation of sustainable financial returns for Market opportunity investors while supporting the shift from finite resources to a clean energy world. ▪ Renewables increasingly dominant, with declining need for subsidies Key characteristics ▪ Decarbonisation of econo
Slide 35: Energy Storage
GRESHAM HOUSE ENERGY STORAGE Compelling investment opportunity in a fast-growing Market opportunity sector. ▪ Demand for energy storage is accelerating as Key characteristics deployment of renewables continues and coal and gas- fired generation are retired 1. Gresham House Energy Storage Fund plc gi
Slide 36: Onshore Wind
GRESHAM HOUSE ONSHORE WIND Sustainable real asset with an attractive return and low Market opportunity financial risk. The UK is one of the best locations for wind power in the world. Key characteristics Decarbonisation of the economy drives the need for a reliable electricity supply based on renewa
Slide 37: Solar
GRESHAM HOUSE SOLAR Low risk, asset backed investment providing robust Market opportunity revenues with a strong degree of inflation protection. Solar is an established power generation source in the UK and Key characteristics still growing. UK demand for clean energy will increase substantially as
Slide 38: Co-Investment
CO-INVESTMENT What is Co-Investment? ▪ Alongside financial returns, many of our clients and investors look for opportunities to increase their investment into specific sectors and regions of their choice on a deal-by-deal basis. ▪ We aim to provide our clients with access to co-investment opportunit
Slide 39: Our Client Portal
OUR CLIENT PORTAL We believe our approach to asset management is differentiated by looking at new ways to adapt and share what we do with investors. This is evidenced, in part, through our investment into digital services. We understand that key investor objectives in addition to financial returns a
Slide 40: Recognition
RECOGNITION WINNERS ▪ Professional Pensions UK Pensions Awards 2019 - Alternative Investment Manager of the Year ▪ The Grant Thornton Quoted Company Awards - Fund Manager of the Year 20191 ▪ Wealth Briefing European Awards 2019 - Alternative Investment Manager ▪ Wealth Briefing European Awards 2018
Slide 41: Disclaimer
DISCLAIMER This presentation (the “Presentation”) is issued on a confidential basis by Gresham Statements contained in this Presentation that are not historical facts are based on House Plc (“Gresham House”) for information purposes only. This Presentation, its current expectations, estimates, proje