B.p. Marsh & Partners Plc · LSE:BPM

B.p. Marsh & Partners — H1 2012 Earnings Presentation

29 slides from B.p. Marsh & Partners's earnings presentation, October 2012

1. Slide 1: Interim Results for the six months to 31 July 2012

   B.P. Marsh & Partners Plc Interim Results For the six months to 31 July 2012 Brian Marsh OBE, Chairman Jonathan Newman, Group Finance Director Camilla Kenyon, Investment Director Dan Topping, Investment Director October 2012

2. Slide 2: Overview

   Overview  Niche Venture Capital provider focused on minority investments in financial services businesses, typically taking an equity stake of between 15% and 45%  Geographic focus on UK, but also considers opportunities in EU and North America  Established in 1990 with funding of £2.5m – 31 inve

3. Slide 3: Financial Highlights – Period Ended 31 July 2012

   Financial Highlights – Period Ended 31 July 2012  NAV of £52.0m (31 January 2012: £50.1m, 31 July 2011: £48.5m)  NAV per share of 178p (31 January 2012: 171p, 31 July 2011: 166p)*  Currently trading at a 51% discount to NAV (at close of 22 October 2012)  Consolidated profit after tax £2.2m (31 J

4. Slide 4: Other Key Developments – Cash Position

   Other Key Developments – Cash Position  Cash Position  Cash at 1 Feb 2012 £0.7m  + £4.5m sale of Hyperion shares  + £0.3m sale of Besso shares (option triggered by Besso’s management)  - £1.3m repayment of Directors’ Loan  - £0.8m loans granted to investee companies for acquisitions  - £0.3m

5. Slide 5: Performance: Net Asset Value (NAV)

   Performance: Net Asset Value (NAV) 52.0 48.5 50.1 50 46.5 43.9 40.6 40 £ Millions 30 22.1 20 8.7 10 4.7 2.5 0 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31st Jan 31st July 31st Jan 31st July 90 95 99 05 07* 09 11 11 12 12 YEAR ENDED YEAR ENDED SIX MONTHS ENDED NET OF DEFERRED TAX * NB: Th

6. Slide 6: 2007-2012: Resilient Net Asset Value (NAV)

   2007-2012: Resilient Net Asset Value (NAV) Source: Datastream 6

7. Slide 7: Investments at July 2012

   Investments at 31 July 2012 Consolidated Cash Flow Investment Activity Cost of Fair market Equity % Year Movement equity value initially in period investment 31.07.12 invested to 31.07.12 (£’000) (£’000) (£’000) Besso Insurance Group Limited Insurance broker 1,838 4,292 30% 1995 387 The Broucour Gro

8. Slide 8: Key Portfolio Valuation Movements – Hyperion Insurance Group

   Key Portfolio Valuation Movements in Period – Hyperion Insurance Group Ltd (“Hyperion”)  Acquisition of Windsor Partners Limited (“Windsor”)  On 3 July 2012 Hyperion completed the acquisition of Windsor, the international Lloyd's broking group which provides insurance and reinsurance broking servi

9. Slide 9: Key Portfolio Valuation Movements – Hyperion continued

   Key Portfolio Valuation Movements in Period – Hyperion Insurance Group Ltd Continued  Sale of CFC  In June 2012 Hyperion sold its majority holding in CFC Underwriting Group Ltd, the specialist IT-focused D&O and PI underwriting agency for SMEs, to a team of investors  The proceeds from the sale w

10. Slide 10: Key Portfolio Valuation Movements – Besso Insurance Group

    Key Portfolio Valuation Movements in Period – Besso Insurance Group Limited (“Besso”)  The Group originally invested in Besso in 1995; since then Besso has grown from a company that produced revenues of £2.2m (31 December 1995) to £25m (31 December 2011)  Group’s valuation increased by £0.4m to £4

11. Slide 11: Key Portfolio Valuation Movements – Summa Insurance Brokerage

    Key Portfolio Valuation Movements in Period – Summa Insurance Brokerage, S. L. (“Summa”)  In 2005 the Group invested in Summa, a Madrid based insurance intermediary  The outlook in Spain remains a concern, however the Group remains confident in Summa’s prospects through this period of economic unr

12. Slide 12: Key Portfolio Valuation Movements – US Risk (UK) Limited

    Key Portfolio Valuation Movements in Period – US Risk (UK) Limited (“US Risk (UK)”)  Acquisition of James Hampden International Insurance Brokers Limited (“JHI”) and Abraxas Insurance AG (“Abraxas”)  On 5 March 2012, US Risk (UK), in which the Group invested in June 2010, acquired the specialist i

13. Slide 13: Other Key Developments – Investment Opportunities

    Other Key Developments – Investment Opportunities  39 prospective new investments received in the period to 31 July 2012, this was compared to 50 in the period 31 January 2011 to 31 July 2011  Sourcing of new opportunities:  Long-term introducer relations  Active networking  BVCA membership  R

14. Slide 14: Other Key Developments – Investment Opportunities Continued

    Other Key Developments – Investment Opportunities Continued  Some of the opportunities reviewed by the Company during the period:  US-Based specialty lines insurance broker and underwriter management company  Specialist research & M&A boutique  Specialist MGA, seeking new backer  Provider of pe

15. Slide 15: Minority Investor Protections

    MinorityInvestor Minority InvestorProtections Protections The Group’s position is well protected and portfolio investments are actively monitored. The Group has the following investor safeguards in place:  Board meetings are held frequently and at least every three months;  Timely management accou

16. Slide 16: Adding Value

    Adding Value  We believe in building strong relationships with the businesses we partner and using our expertise and experience in assisting them to achieve their growth targets and maximise shareholder value. We do so as follows:  Representation at Board level  Provision of follow-on funding  G

17. Slide 17: Exit Strategy

    Exit Strategy  Exit considered on entry  Patient development to achieve full earning potential  Recognise and act on opportunistic situations  Deal size favours acquisition by large financial services firms 17

18. Slide 18: Other Key Developments – Outlook

    Other Key Developments – Outlook  Continue to seek investment opportunities in high growth businesses  Continue to seek attractive realisation opportunities for our current portfolio  Climate of continuing economic uncertainty necessitates a prudent approach  Focus on maximising value in existin

19. Slide 19: Summary

    Summary Summary  NAV proving to be resilient even in uncertain economic conditions  89.5% of portfolio by value in insurance broking or related activities  BP Marsh is not subject to the limitations of a closed fund, such as asset redemption pressures  £3.3m cash at 31 July 2012  Net cash after

20. Slide 20: Appendices

    Appendices  Management Team  Board Members  Current Portfolio  Financials  Major Shareholders  Contacts 20

21. Slide 21: Management Team

    Management Team 50 years’ experience in insurance broking and Executive Chairman underwriting. 1979-1990 was chairman of the Nelson Hurst & Marsh Group. More than 30 years’ experience Brian Marsh OBE building, buying and selling financial services businesses particularly in the insurance sector. Cha

22. Slide 22: Board Members

    Board Members Over 17 years’ experience in the financial services Non-Executive Director industry. Having joined the Company in 1994 she was made Managing Director in March 2002 before Natasha Dunbar becoming a Non- Executive Director in 2008. Natasha is still involved in aspects of the operational

23. Slide 23: Current Portfolio

    Current Portfolio Besso Insurance Group Limited- 30%  February 1995 the Group assisted a specialist team departing from Jardine Lloyd Thompson Group in establishing Besso Holdings Limited, which specialises in insurance broking for the North American wholesale market  Besso Holdings Limited change

24. Slide 24: Current Portfolio cont.

    Current Portfolio cont. Paterson Squared LLC - 22.5%  Founded in September 2008 after its separation from Paterson Martin Limited  The team use sophisticated modelling techniques to assess risk, with a view to providing counter-party risk and transaction advice Portfolio Design Group International

25. Slide 25: Consolidated Statement of Financial Position (IFRS)

    Consolidated Statement of Financial Position (IFRS) Consolidated at 31 July 2012 Balance Sheet Unaudited 6 Audited Unaudited 6 months to Year to months to 31 July 2012 31 Jan 2012 31 July 2011 £’000 £’000 £’000 Tangible assets 10 14 24 Investments at fair value 47,998 50,624 48,692 Debtors / Loans r

26. Slide 26: Consolidated Statement of Comprehensive Income (IFRS)

    Consolidated Statement Consolidated of Comprehensive Income StatementIncome (IFRS) (IFRS) at 31 July 2012Income Statement to 31 July 2007 Unaudited 6 Audited Unaudited 6 months to Year to months to 31 July 2012 31 January 31 July 2011 £’000 2012 £’000 £’000 Gains on Investments (Realised and Unreali

27. Slide 27: Consolidated Statement of Cash Flows (IFRS)

    Consolidated Statement of Cash Flows (IFRS) at 31 Consolidated Cash Flow July 2012 Unaudited 6 Audited Unaudited 6 months to 31 Year to months to 31 July 2012 31 Jan 2012 July 2011 £’000 £’000 £’000 Net cash from / (used by) operating activities 146 215 (51) Taxation - - - Purchase of Property, plan

28. Slide 28: Key Shareholders

    Key Shareholders  Directors  Brian Marsh OBE - 59.2%  Natasha Dunbar - 4.9%  Major Shareholders (>3%)  SVM Asset Management Limited  Henderson Global Investors  AXA Framlington  Helium Special Situations Fund  The Stephen Crowther Trust 28

29. Slide 29: Contacts

    Contacts Contacts B. P. Marsh & Partners Plc 2nd Floor 36 Broadway London SW1H 0BH Telephone: 020 7233 3112 Website: www.bpmarsh.co.uk Nominated Adviser & Broker Panmure Gordon & Co Telephone: 020 7886 2500 Financial PR Redleaf Polhill Telephone: 020 7566 6720 29

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