Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — Investor Presentation (March 2024)
23 slides from Virtus Investment Partners's investor presentation, Mar 31, 2024
Slide 1: Virtus KAR Small-Cap Value Fund
VIRTUS KAR SMALL-CAP VALUE FUND March 31, 2024
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. Industrial Concentration Because
Slide 3: Virtus Investment Partners Multi-Asset Manager Key Facts
VIRTUS INVESTMENT PARTNERS MULTI-ASSET MANAGER KEY FACTS $179.3 Billion in AUM 2 2 35 2 Funds Rated 4 or 5 Stars1 Past performance is not indicative of future results. As of 3/31/24. 1Based on INST class or I shares. Please see page 19 for additional Morningstar disclosure. Strong ratings are not in
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: $65.3 billion*
Slide 5: Small-Cap Quality Team
SMALL-CAP QUALITY TEAM Research KAR Start Portfolio Manager/Analyst Responsibility Sector Coverage Start Date Date Julie Kutasov Portfolio Manager and Senior Research Analyst Materials 2001 2001 Industrials Utilities Craig Stone Portfolio Manager and Senior Research Analyst Real Estate 1990 2000 Con
Slide 6: 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 7: Kayne Anderson Rudnick Sources of Quality
KAYNE ANDERSON RUDNICK SOURCES OF QUALITY EXAMPLES OF HIGH-QUALITY BUSINESS MODELS Network Effect Cost Advantage High Customer Brand Franchise Switching Costs Source: Kayne Anderson Rudnick The trademarks shown are the property of their respective owners. Percent of Virtus KAR Small-Cap Value Fund a
Slide 8: High-Quality Universe Development
HIGH-QUALITY UNIVERSE DEVELOPMENT KAYNE ANDERSON RUDNICK SOURCES ITS INVESTMENT UNIVERSE IN A NUMBER OF WAYS Quantitative Screens: Other Resources for Names are: – High return on capital – Research on existing portfolio over a full economic cycle holdings Small Cap – Meetings with companies – Long a
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 Purpose: Determine if competitive advantage Purpose: Evaluate source, level, and sustainability exists and evaluate its strength. o
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 KARs investment strateg
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 20-35 holdings Significant premium to intrinsic value Maximum Initial position is 5% (at cost) Expected annual return insufficient Maximum position size is 10% (at market) Portfolio Upgrade Sec
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: An Emphasis on Quality Characteristics
AN EMPHASIS ON QUALITY CHARACTERISTICS NET MARGIN* ROA* 11.33% 11.05% 7.36% 8.82% 3.41% 1.14% Percentile Rank in Category (%) 28 6 ROE* ROIC* 18.24% 13.31% 11.63% 6.52% 6.04% 2.45% Percentile Rank in Category (%) 8 6 ■ Virtus KAR Small-Cap Value Fund (PXQSX) ■ Russell 2000® Value Index ■ Combined Mo
Slide 15: Characteristics
CHARACTERISTICS 10 YEARS Standard Sharpe Upside Downside Alpha Beta Deviation % Ratio Capture Ratio Capture Ratio 2.74 20.79 0.40 1.00 20.11 100.00 100.00 0.95 95.19 18.05 93.27 0.32 87.12 0.80 76.82 0.26 0.75 0.00 Percentile Rank in Category (%) 23 13 9 16 83 12 ■ Virtus KAR Small-Cap Value Fund (P
Slide 16: Portfolio Characteristics
PORTFOLIO CHARACTERISTICS Virtus KAR Russell Small-Cap 2000® Quality Value Fund Value Index Description† Return on Equity—Past 5 Years 21.8% 9.2% In a market of average businesses, KAR seeks to own protected proprietary businesses that generate Total Debt/EBITDA* 1.6 x 3.0 x exceptional returns on s
Slide 17: Sector Allocations
SECTOR ALLOCATIONS Virtus KAR Small-Cap Value Fund (PXQSX) Russell 2000® Value Index 38.5% 26.2% 25.8% 14.8% 14.1% 11.1% 9.7% 10.1% 9.3% 6.4% 6.2% 5.9% 5.0% 3.7% 3.7% 2.2% 2.6% 2.4% 2.4% 0.0% 0.0% 0.0% Industrials Financials Consumer Consumer Materials Health Care Information Real Estate Energy Util
Slide 18: Top Holdings
TOP HOLDINGS Top Ten Holdings Sector % of Fund Watsco Inc. Industrials 6.8 Houlihan Lokey Inc. Financials 5.4 Construction Partners Inc. Industrials 5.3 Thor Industries Inc. Consumer Discretionary 4.6 Hillman Solutions Corp. Industrials 4.4 Primerica Inc. Financials 4.3 Armstrong World Industries In
Slide 19: Performance Review
PERFORMANCE REVIEW AS OF MARCH 31, 2024 (%) PXQSX Index MORNINGSTAR RATINGSTM 20.60 Small I Share Growth 18.75 Time Period # of Stars # of Funds Overall ★★★★ 552 3 Year ★★★ 552 5 Year ★★★★ 520 10.07 8.67 10 Year ★★★★ 400 8.17 8.87 6.87 7.05 Morningstar ratings are based on risk-adjusted returns. Str
Slide 20: 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 21: Definitions
DEFINITIONS QUALITY MARKET CHARACTERISTICS Return on Equity - Past 5 Years—relates how well the company is using the money $ Weighted Average Market Cap - 3 Year Average—The sum of each security’s weight invested in it so that it can bring a return to its investors. A high portfolio ROE indicates wi
Slide 22: Index Definitions
INDEX DEFINITIONS The Russell 2000® Value Index is a market capitalization-weighted index of value- The Russell 1000® Growth Index is a market capitalization-weighted index of growth- oriented stocks of the smallest 2,000 companies in the Russell Universe, which oriented stocks of the 1,000 largest
Slide 23: About Virtus
Virtus (NYSE: 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 philos
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