Ashmore Group plc · LSE:ASHM
Ashmore — Merger or Acquisition (February 2011)
11 slides from Ashmore's merger presentation, Feb 24, 2011
Slide 1: Acquisition of Emerging Markets Management, L.L.C.
Ashmore Group plc Acquisition of Emerging Markets Management, L.L.C. 24 February 2011
Slide 2: Highlights
Highlights • Acquisition of majority stake in Emerging Markets Management, L.L.C. ("EMM") by Ashmore − Dedicated emerging markets equity manager with approximately US$10.4bn in AuM(1) − Established investment platform with proven investment process • In line with Ashmore's strategy − Specialist emer
Slide 3: Overview of EMM
Overview of EMM AuM: US$10.4bn • Established in 1987 • Dedicated to emerging markets equities • Approximately US$10.4bn of AuM (at 31 Jan 2011) − Global EM active (85%): separate, commingled − Regional and Small Cap Strategies (15%): Africa, Middle East, South Asian, Latin Small Cap, Frontier, Latin
Slide 4: Strategic rationale
Strategic rationale In line with Ashmore’s strategy to grow its equity investment theme 1 Diversifies Ashmore’s product offering and revenue streams 2 Provides pure emerging markets equities investment capability 3 Expands and diversifies client base by geography and client type 4 Delivers value and
Slide 5: Pro forma AuM
Pro forma AuM Ashmore AuM: US$46.7bn Total Pro Forma AuM: US$57.1bn(1) …enhances overall balance of Ashmore’s business Notes: (1) Based on US$10.4bn pro forma AuM for EMM as at 31-Jan-11 and US$46.7bn AuM for Ashmore as at 31-Dec-10. (2) Other includes commingled funds where underlying investors are
Slide 6: Transaction structure
Transaction structure • Ashmore to acquire a 62.9% stake in EMM, with the remaining shares owned by key employees and founders Structured to • Restructured shareholder structure: increase in employee ownership and reduction in ownership align interests of founders and exit of Amundi • Existing arran
Slide 7: Key EMM financials
Key EMM financials • AuM of US$10.4bn as at 31 January 2011 • Net management fee margin of c. 65bps • Majority of revenues currently derived from management fees • Low fixed cost base, comparable operating margins • 2010 PBT of US$48.1m¹ • Variable compensation structure to be aligned with Ashmore …
Slide 8: Operational structure
Operational structure • EMM Board to be majority Ashmore • EMM CEO Felicia Morrow to be responsible for day to day operational Governance management and will become Co-CIO with founder and Chairman Antoine van Agtmael • Ashmore to provide on-the-ground operational input • No change to EMM investment
Slide 9: Conclusion
Conclusion • Clear strategic fit • Scarce opportunity to add specialist EM equities business of scale • Interests aligned through attractive transaction structure • Good cultural fit • Enhances diversification • Potential for distribution upside • Financially compelling, creates shareholder value 8
Slide 10: Disclaimer
Disclaimer IMPORTANT INFORMATION This document does not constitute an offer to sell or an invitation to buy shares in Ashmore Group plc or any other invitation or inducement to engage in investment activities. Certain statements, beliefs and opinions in this document are forward-looking, which refle
Slide 11: Ashmore
Ashmore
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