Pinnacle Investment Management Group Limited · ASX:PNI
Pinnacle Investment Management — Wilson's Advisory Rapid Insights Conference 2016
37 slides from Pinnacle Investment Management's conference presentation, Nov 9, 2016
Slide 1: ASX cover letter - Presentation
Level 35 60 Margaret Street Sydney, NSW 2000 For personal use only www.pinnacleinvestment.com.au 9 November 2016 By Electronic Lodgement The Manager Company Announcements Office ASX Ltd 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam Pinnacle Investment Management Group Limited – Presentation Pinnac
Slide 2: Wilson's Advisory – Rapid Insights Conference
For personal use only Pinnacle Investment Management Group Limited Wilson’s Advisory – Rapid Insights Conference 10 November 2016
Slide 3: Agenda
Agenda For personal use only Corporate reorganisation complete FY16 financial performance and financial statements Shareholder returns Pinnacle and affiliated investment managers – Pinnacle model, philosophy and investment styles of affiliates and update on affiliates’ performance Aggregat
Slide 4: Corporate reorganisation completed
Corporate reorganisation completed For personal use only Transaction review - Transaction closed on 25 August 2016 - Issue of ~37m shares to acquire the remaining 25% of Pinnacle - Ian Macoun announced as Managing Director on 17 August 2016 following Alexander Grant’s resignation - Deborah Beale,
Slide 5: New corporate structure – 100% ownership via PNI
New corporate structure – 100% ownership via PNI For personal use only 4
Slide 6: Board and Committee Structure
Board and Committee Structure For personal use only Board Member Classification Equity Committees Ownership Audit, Remuneration Compliance and and Risk Nominations Alan Watson (Chair) Independent, Yes (Chair) Non-executive Ian Macoun (MD) Executive Yes Deborah Beale Independent, Yes Non-execut
Slide 7: Financial summary – FY16
Financial summary – FY16 For personal use only (A$m) Year ending 30 Jun 2016 30 Jun 2015 Strong growth in Pinnacle earnings Pinnacle (100%) 10.6 7.4(1) Principal Investments 0.7 0.1 Increase in group overhead Priority Funds 0.5 (0.3) Next Financial (0.6) (0.7) includes one off costs Wilson Group
Slide 8: Pinnacle financial highlights – FY16
Pinnacle financial highlights – FY16 For personal use only (A$m) Year ending 30 Jun 2016 30 Jun 2015 Variance Strong FUM and revenue growth for FUM ($bn; end of year) 19.8 16.1 23.0% affiliated investment managers Total Affiliated Investment 92.8 72.0 28.9% Managers revenues Total Affiliated Inv
Slide 9: Balance sheet – June 2016
Balance sheet – 30 June 2016 For personal use only A$m – 30 June 2016 Current assets Cash and Principal Investments of $24.5 Cash and equivalents 13.6 Excludes post balance date impacts Financial assets 10.9 including: Total cash and financial assets 24.5 Other current assets 8.3 special divid
Slide 10: Pinnacle continues to grow
Pinnacle continues to grow For personal use only Pinnacle NPAT of $10.6 million in FY16, up 43% from $7.4 million Pinnacle’s share of NPAT of $15.9 million from Pinnacle Affiliates in FY16, up 34% from $11.9 million FUM of $21.8 billion as at 30 September 2016 Antipodes LIC listed on ASX in
Slide 11: Pinnacle continues to grow (2)
Pinnacle continues to grow (2) For personal use only Outlook for superannuation and managed funds remains strong: • 4th largest domestic system • $2 trillion under management • Estimated $8 trillion by 2035* Prospects for investment markets less certain • Political uncertainty – Brexit, Post US
Slide 12: Total shareholder returns – 1 year
Total shareholder returns – 1 year, value of $1 For personal use only 130.26% total return 11
Slide 13: Total shareholder returns – 3 years
Total shareholder returns – 3 years, value of $1 For personal use only 64.72% total return 12
Slide 14: Total shareholder returns – 5 years
Total shareholder returns – 5 years, value of $1 For personal use only 36.49% total return 13
Slide 15: Australia's leading investment house of affiliated investment managers
Australia’s leading investment “house of affiliated investment managers” (IM) For personal use only Structure promotes independence, accountability, focus and longevity • Executives of both Pinnacle and affiliated IM have significant equity interests • Equity ownership enhances alignment with shareh
Slide 16: Overview of Affiliated IM
Overview of Affiliated IM For personal use only » Hyperion Asset Management (49% owned by Pinnacle) – a specialist manager of Australian equities following a growth style. » Palisade Investment Partners (35% owned by Pinnacle) – a specialist manager of unlisted infrastructure assets with both pooled
Slide 17: Pinnacle and affiliates continue to win major industry awards
Pinnacle and affiliates continue to win major industry awards For personal use only Zenith – Professional Planner Fund Manager of the Year Awards, September 2016: • Pinnacle – Fund Distributor of the Year • Resolution Capital – Global REIT Fund Manager of the Year • Antipodes – International Equit
Slide 18: Hyperion Asset Management
Hyperion Asset Management For personal use only Hyperion’s long term track record remains outstanding. Hyperion Australian Growth Companies Fund produced absolute performance of 24.2% after fees (10.7% above the S&P ASX 300 Accumulation Index) on 12 months to 30 September 2016 Hyperion Small G
Slide 19: Palisade Investment Partners
Palisade Investment Partners For personal use only Specialist manager of unlisted infrastructure assets : • Palisade’s Diversified Infrastructure Fund - diversified portfolio of assets • Palisade’s Australian Social Infrastructure Fund - assets with Government availability-based revenue streams •
Slide 20: Plato Investment Management
Plato Investment Management For personal use only FUM has risen to $3.2 billion (end Sept, including FUA $3.5 billion). Beta one strategies continue to outperform over the past three years, with the income strategies delivering on their income targets. Plato Australian Shares Income Fund has d
Slide 21: Solaris Investment Management
Solaris Investment Management For personal use only FUM has risen to $4.8 billion as at 30 September 2016 Solaris’ clients benefited from solid investment out-performance in the year to 30 September, with the Core strategy outperforming the S&P/ASX200 by 1.52%. Solaris’ core strategy has outperf
Slide 22: Resolution Capital
Resolution Capital For personal use only Funds under management grew to $4.7 billion to 30 Sep 2016, up strongly over the past year. Zenith – Professional Planner Global REIT Fund Manager of the Year Award in September 2016 (third consecutive year). Long term out-performance remains pleasing.
Slide 23: Antipodes Investment Partners
Antipodes Investment Partners For personal use only Pragmatic value manager of global and Asian equities (long only and long-short) founded in 2015 by Jacob Mitchell, formerly Deputy Chief Investment Officer of Platinum Asset Management, together with a number of former colleagues and like-minded
Slide 24: Spheria Asset Management
Spheria Asset Management For personal use only Commenced operations in April 2016. Launched Spheria Micro Cap Fund in May 2016 Appointed as investment manager to Priority Growth Fund (now Spheria Australian Smaller Companies Fund) and Priority Core Fund (now Spheria Australian Mid Cap Fund) in
Slide 25: Progress to Date – FY17
Progress to Date – FY17 For personal use only FUM net inflows strong – $1.2 billion for FY17 to 30 Sep Retail net inflows of $411 million for FY17 to 30 Sep (not including $313 million for Antipodes LIC received in Oct 2016) Shareholder discussions – benefits of multi affiliate model well unde
Slide 26: Consistent growth in FUM
Consistent growth in FUM For personal use only Pinnacle funds under management ($bn) Excludes Antipodes LIC 24.00 21.8 22.00 19.8 20.00 18.00 16.1 16.00 14.00 12.3 12.00 10.9 10.3 10.0 10.00 7.9 8.00 6.00 4.4 4.00 3.5 1.7 2.00 - 30 Jun 07 30 Jun 08 30 Jun 09 30 Jun 10 30 Jun 11 30 Jun 12 30 Jun 13 3
Slide 27: Consistent growth in affiliated IM revenues
Consistent growth in affiliated IM revenues For personal use only Total Affiliated IM revenues ($m at 100%) – 12 month periods and FY17 YTD 100.00 92.8** 90.00 80.00 72.0* 70.00 60.00 55.7 Q1 revenues 50.00 47.1 only. No performance 37.9 38.6 fees included 40.00 30.00 28.0 24.2*** 20.00 16.0 14.4 10
Slide 28: Affiliates' performance fee revenue and prospects for 1H2017 and FY17
Affiliates’ performance fee revenue to September 2016 and prospects for 1H2017 and FY17 For personal use only Performance fees for affiliates are typically earned half yearly or annually, 31 December or 30 June Only included in PNI’s financial statements once ‘definitely earned’ – on ‘beyond any
Slide 29: Affiliated IM investment performance (to Sep 2016)
Affiliated IM investment performance (to 30 Sep 2016) For personal use only 1Y 3Y 5Y 10Y Inception Inception date Pinnacle Investment Management - Gross Performance Hyperion Asset Management Hyperion Australian Growth Companies Fund 25.35% 12.53% 19.02% 10.03% 13.18% 1/10/2002 Alpha 11.85% 6.50% 8.0
Slide 30: Affiliated IM investment performance (to Sep 2016)
Affiliated IM investment performance (to 30 Sep 2016) For personal use only 1Y 3Y 5Y 10Y Inception Inception Date Pinnacle Investment Management - Gross Performance Resolution Capital Resolution Capital Core Plus Property Securities Fund 21.31% 18.12% 20.31% 9.25% 30/09/2008 Alpha 0.43% 0.46% 0.76%
Slide 31: Outlook – remainder of FY2017
Outlook – remainder of FY2017 For personal use only • FUM and revenue continue to grow – both retail and institutional • We are expanding our distribution team to cope with ongoing growth including new strategies and markets • Legacy cost impact substantially diminished on FY16 and cost savings have
Slide 32: Strong Medium/Long Term Investment Performance of Affiliates
Strong Medium/Long Term Investment Performance of Affiliates – 5 year period to 30 Sep 2016 For personal use only Reporting on consistency of investment performance for the first time – will report this measure routinely in the future 100% of Pinnacle Affiliated Investment Manager strategies and
Slide 33: Broad Strategy Principles
Broad Strategy Principles For personal use only Keep existing Protect the businesses Core strong and growing Be open to Recognise possibilities without feeling the 3 pressure to Growth undertake Horizons Horizon 2 and 3 initiatives Convey Deliver on consistent and reasonable reasonable growth growth
Slide 34: Growth Horizons Framework
Growth Horizons Framework For personal use only Horizon 3 • Must not place the company at risk Horizon 2 • Only consider if low risk and high return • New affiliated on invested capital boutiques and Horizon 1 ‘non-capital’ parent • Exercise great care growth initiatives and careful due • Sustain or
Slide 35: Priorities for FY17
Priorities for FY17 For personal use only Continue to provide high quality distribution, Responsible Entity and infrastructure services Support the affiliated investment managers in their maintenance of high standards Investment managers to remain focused on investing to enable continued stron
Slide 36: Pinnacle Group - Contacts
Pinnacle Group - Contacts For personal use only Ian Macoun, Managing Director ian.macoun@pinnacleinvestment.com.au 35
Slide 37: Disclaimer
Disclaimer For personal use only • This presentation has been prepared by Pinnacle Investment Management Group Limited (PNI). The information in this presentation is current as at 14 November 2016. • This presentation is not an offer or invitation for subscription or purchase of securities or a reco
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