Regal Partners Global Investments Limited · ASX:RG1
Regal Partners Global Investments — VGI Partners Global Investments — Investor Presentation (April 2024)
39 slides from Regal Partners Global Investments's investor presentation, Apr 11, 2024
Slide 1: VGI Partners Global Investments Limited (ASX: VG1)
VGI Partners Global Investments Limited (ASX: VG1) April 2024
Slide 2: Welcome
Welcome Charlie Aitken Investment Director, Regal Partners 2
Slide 3: Disclaimer
Disclaimer This document (Information) is provided by Regal Partners Marketing Services Pty Ltd (ACN 637 448 072) (Regal Partners Marketing), a corporate authorised representative of Attunga Capital Pty Ltd (ABN 96 117 683 093) (AFSL 297385) (Attunga). Regal Partners Marketing and Attunga are busine
Slide 4: Speakers
Speakers Philip Simon Marco Glen Shannon King Birrell Anselmi Barnes McConaghy Co-Founder & Portfolio Manager Portfolio Manager Head of Asian Senior Analyst, Chief Investment VGI Partners VGI Partners Equities Asia Officer, Regal 4
Slide 5: Strong performance across all listed investment vehicles
Strong performance across all listed investment vehicles Fund Launch Description 1 yr portfolio Total share price return index2 return1 135 PGF VG1 RF1 RG8 Global L/S PGF 2013 Equities 29.6% 130 129 125 125 120 121 Global L/S High VG1 2017 Conviction 19.9% 115 110 Multi-strategy 105 105 RF1 2019 alt
Slide 6: Key summary
Key summary 1 Bull market is still young and starting to broaden 2 Valuation foundations remain very strong, especially outside the US. Valuation dispersion creating good opportunities for shorting too 3 VG1 performance improving with shorting and diversification providing downside protection over t
Slide 7: US and Europe markets hit new highs
US and Europe markets hit new highs 190 S&P 500 Euro Stoxx MSCI Asia Pacific 185 180 170 160 150 152 140 130 120 110 110 100 90 80 70 60 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 Source: Bloomberg as at 29 March 2024 (weekly data). Index levels rebased to 100. Past
Slide 8: S&P 500's gains have been driven by mega cap US tech stocks
S&P 500’s gains have been driven by mega cap US tech stocks 'Magnificent 7' Remaining 493 S&P 500 110% 100% 99% 90% 80% 70% 60% 50% 40% 37% 30% 20% 22% 10% 0% -10% Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 Source: Bloomberg as at 29 March 2024. ‘Magnificent 7’ include Apple, Microsoft,
Slide 9: 'Magnificent 7' no longer magnificent
‘Magnificent 7’ no longer magnificent 2023 – Oct lows1 to 31 Dec 2024 March quarter 82% 37% 26% 27% 23% 23% 20% 19% 14% 15% 12% 8% -11% -29% Tesla Apple Alphabet Microsoft Amazon Meta NVIDIA Alphabet Apple Microsoft Meta NVIDIA Tesla Amazon Source: Bloomberg. Past performance is not a reliable indic
Slide 10: 'Magnificent 7' ex Tesla delivering
‘Magnificent 7’ ex Tesla delivering 80x NVIDIA Tesla 'Magnificent 5' 70x 60x 55x 50x 40x 35x 30x 28x 20x 10x Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 Source: Bloomberg as at 29 March 2024. ‘Magnificent 7’ include Apple, Microsoft, Alphabet, Amazon, NVIDIA, Tesla and Meta. ‘Magnificent 5’ for
Slide 11: Market rally is broadening out
Market rally is broadening out 19% 19% 19% 19% 16% 17% 13% 2023 – 10% Oct lows1 to 31 Dec NASDAQ S&P 500 NASDAQ EURO NASDAQ Nikkei NASDAQ Russell 3000 21% 12% 2024 March 10% 10% 9% 9% 9% 9% quarter NASDAQ S&P 500 NASDAQ EURO NASDAQ Nikkei NASDAQ Russell 3000 Source: Bloomberg. Past performance is no
Slide 12: US equity risk premium over the last 20 years
US equity risk premium over the last 20 years 8% Equity risk premium Average 7% 6% 5% 4% 3% 2% 1% 0% 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 Source: Bloomberg as at 29 March 2024 (weekly data). Past performance is not a reliable indicator of future performance. It should not be relied
Slide 13: Best opportunities outside of the US
Best opportunities outside of the US 10.0% 9.0% 8.6% 8.0% 7.0% 6.0% 5.1% 5.3% 5.0% 4.6% 4.0% 3.0% 1.9% 2.0% 1.0% 0.4% 0.0% US Australia Japan Hong Kong Germany UK P/E 22.0x 17.1x 17.2x 8.2x 13.2x 11.7x Corporate earnings yield 4.6% 5.9% 5.8% 12.3% 7.6% 8.5% 10 year government yield 4.2% 4.0% 0.7% 3.
Slide 14: Larger Regal/VGI team has enabled greater diversification of the portfolio
Larger Regal/VGI team has enabled greater diversification of the portfolio North America 62% North America 38% June March Location UK/Europe 28% UK/Europe 34% 2022 2024 Asia 10% Asia 28% eCommerce & Internet 29% eCommerce & Internet 24% Information & Medical Technology 23% Energy 18% Exchanges & Fin
Slide 15: Increase in net exposure to take advantage of equity markets
Increase in net exposure to take advantage of equity markets 180% Gross gearing Net gearing 160% 140% 120% 100% 80% 60% 40% 20% 0% Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Source: VGI Partners. Past performance is not a reliable indicator of future performance. It should not be relied
Slide 16: Attribution (last six months)
Attribution (last six months) Long/Short Alpha Regional Attribution Sector Attribution1 18% 11% 8% 6% 3% 4% 4% 3% 3% 3% 0% Long Short North America Europe Asia Communication Industrials Materials Health Care Consumer Other Services Discretionary Source: VGI Partners. Asia includes Australia and New
Slide 17: Shorts working well in difficult environment
Shorts working well in difficult environment S&P 500 up S&P 500 down 3.8% 2.5% -1.3% -2.9% S&P 500 VG1 S&P 500 VG1 Source: VGI Partners. Average of monthly returns over the last 12 months. Past performance is not a reliable indicator of future performance. It should not be relied upon as (and is not
Slide 18: VG1 portfolio contributors calendar YTD
VG1 portfolio contributors calendar YTD Long Contributors to Net Portfolio Return Short Contributors (Sector) Unprofitable Resources Tech AMZN US DIS US Electric Vehicle Concepts META US RHM GY Source: Citco Fund Services, VGI Partners. Past performance is not a reliable indicator of future performa
Slide 19: High conviction ideas
High conviction ideas 1 1. Disney 6 6. Toyota Industries 2 2. Amazon 7 7. NexGen 3 3. London Stock Exchange Group 8 8. Teck Resources 4 4. GE HealthCare 9 9. Tesla (Short) 5 5. Samsung 19
Slide 20: Long idea: The Walt Disney Company
Long idea: The Walt Disney Company Share price performance (US$) 130 Share price (US$) 122.36 Market cap (US$) 224.4bn NTM P/E 24.1x 120 • World leading media conglomerate • Experiences (Parks and Resorts) business is 110 high quality with strong returns and ability to invest further capital • Scarc
Slide 21: Long idea: The Walt Disney Company (cont'd)
Long idea: The Walt Disney Company (cont’d) Direct-to-consumer (DTC) operating profit (US$m) Annual EPS 5,000 $10.0 4,000 $9.0 3,000 $8.0 2,000 $7.0 1,000 $6.0 0 -1,000 $5.0 -2,000 $4.0 -3,000 $3.0 -4,000 $2.0 -5,000 $1.0 FY2021 FY2022 FY2023 FY2024E FY2025E FY2026E FY2027E $- DTC margin -11% -19% -
Slide 22: Long idea: Amazon
Long idea: Amazon Share price performance (US$) 190 Share price (US$) 180.38 Market cap (US$) 1.9tn 180 NTM P/E 33.8x • Collection of scale advantaged, strong moat 170 businesses – Amazon Web Services (AWS) – a leader in 160 cloud services 150 – Retail –global eCommerce leader 140 • Higher margin se
Slide 23: Long idea: Amazon (cont'd)
Long idea: Amazon (cont’d) Revenue by segment 4Q FY18 vs 4Q FY23 Retail capex (US$m) LTM Retail margins 180,000 CAGR 8.0% 60,000 160,000 140,000 High 6.0% 50,000 Margin 120,000 27% 4.0% 40,000 100,000 2.0% 80,000 30,000 60,000 Lower - Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23 Se
Slide 24: Long idea: London Stock Exchange Group
Long idea: London Stock Exchange Group Share price performance (GBp) 10,000 Share price (GBp) 9,490 Market cap (GBP) 50.8bn NTM P/E 25.5x 9,500 • The London Stock Exchange (LSE) is different to the London Stock Exchange Group (LSEG) 9,000 • Transformed from a traditional transactional exchange into
Slide 25: Long idea: London Stock Exchange Group (cont'd)
Long idea: London Stock Exchange Group (cont’d) Evolution Towards Recurring Revenue Annual Subscription Growth LSEG Margin Differential vs Peers 100% 90% 7.6% 80% 7.1% 6.9% 6.7% 70% 6.2% 60% 5.8% 5.4% 50% 4.9% 4.6% 40% 3.9%4.0% 30% 20% 3.0% 10% 0% 2008 2014 2020 2023 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q
Slide 26: Long idea: London Stock Exchange Group (cont'd)
Long idea: London Stock Exchange Group (cont’d) Re-Rating Opportunity as LSEG Valuation Depressed vs Peers P/E (FY25) EV/EBITDA (FY25) Morningstar 37.1x MSCI 25.6x • Improved business mix + growth acceleration + Gartner 36.5x Gartner 23.3x better execution = yet to be reflected in LSEG valuation mul
Slide 27: Long Idea: GE HealthCare
Long Idea: GE HealthCare Share price performance (US$) 100 Share price (US$) 90.91 Market cap (US$) 41.4b NTM P/E 20.6x • Best-in-class medtech franchise still flying under 90 the radar due to recent spin-off and unproven management team • Thesis: 80 1. Renewed focus & investment will support market
Slide 28: Long idea: GE HealthCare (cont'd)
Long idea: GE HealthCare (cont’d) GE HealthCare vs Siemens Healthineers Margin GE HealthCare Free Cash Flow yield vs medtech peers 4.7% 21.7% 4.5% 4.4% 4.2% 3.8% 3.6% 13.9% 2.6% 2.4% 2.1% 1.8% 1.8% 1.1% 0.6% SHL Imaging GEHC Imaging & BAX HOLX MDT GEHC BDX ZBH ABT SYK SHL BSX ALC EW ISRG Ultrasound
Slide 29: Memory market
Memory market The memory market has entered a new upcycle, led by AI related memory Memory price (US$) 180 • After a prolonged downcycle, memory prices have bottomed and have entered a new upcycle 170 160 • The upcycle is being driven by: 150 140 – Strong demand for leading edge memory products, par
Slide 30: Long idea: Samsung
Long idea: Samsung Share price performance (KRW) 85,000 Share price (KRW) 82,400 Market cap (KRW) 491.9tn NTM P/E 16.2x • Major Korean technology company specialising in consumer electronics. Also a major memory 80,000 manufacturer • Attractive valuation 75,000 • Memory market is rebounding after a
Slide 31: Long idea: Toyota Industries Corporation
Long idea: Toyota Industries Corporation Share price performance (JPY)1 18,000 Share price (JPY) 15,650 16,000 Market cap (JPY) 5.1tn • Global leader in materials handling and logistics NTM P/E 18.5x 14,000 automation equipment 12,000 – Labour shortages driving demand for higher 10,000 margin wareho
Slide 32: Long idea: NexGen Energy
Long idea: NexGen Energy Share price performance (CAD) 12.00 Share price (CAD) 10.53 Market cap (CAD) 5.7bn • Uranium developer whose flagship asset is the 10.00 Rook 1 Project in Saskatchewan, Canada • The Project hosts the Tier 1 Arrow Deposit – 2021 feasibility study demonstrated Arrow as a tier
Slide 33: Long idea: Teck Resources
Long idea: Teck Resources Share price performance (US$) 50.00 Share price (US$) 45.78 48.00 Market cap (US$) 23.7b 46.00 • Canada’s largest diversified mining company with operations and projects in Canada, the US, 44.00 Chile and Peru 42.00 • Produces base metals (copper and zinc) and steelmaking c
Slide 34: Short idea: Tesla
Short idea: Tesla Share price performance (US$) 340.00 Share price (US$) 175.79 320.00 Market cap (US$) 559.9b NTM P/E 55.5x 300.00 • Manufactures and sells electric vehicles (EVs) 280.00 and energy generation & storage systems 260.00 • EV volume and revenue growth has disappointed due to weak produ
Slide 35: Questions
Questions Submit your questions via the side menu on the webcast player
Slide 36: Appendix
VGI PARTNERS Global Investments Appendix
Slide 37: Key pillars of a successful listed investment vehicle
Key pillars of a successful listed investment vehicle Investment Performance Investor Engagement Capital Management & Communication Initiatives • Deliver attractive risk- • Experienced sales and • Defined dividend policy adjusted absolute returns marketing team over the medium term • Buy-back utilis
Slide 38: VG1 investment guidelines
VG1 investment guidelines Exposure Number of Long Investments Typically 10-25 (10-15 Core) Single Security Long Investment Limit 15% at purchase; maximum of 20% Number of Short Equity Positions Typically 10-35 Single Security Short Equity Position Limits 5% at purchase; maximum of 7.5% Net Equity Ex
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