Liontrust Asset Management Plc · LSE:LIO
Liontrust Asset Management — H1 FY2023 Earnings Presentation
65 slides from Liontrust Asset Management's earnings presentation, November 2022
Slide 1: Liontrust Asset Management PLC Half Year Results
Liontrust Asset Management PLC Half Year Results November 2022 | John Ions & Vinay Abrol W inner Best Active Investme nt Solut ion Provider
Slide 2: Contents
Contents 1. Trading update 2. Key metrics 3. Strategic objectives 4. Investment strength 5. Flows and AuMA 6. Brand 7. Financials summary 8. Majedie acquisition 9. Outlook 10. Appendices 1
Slide 3: Trading update
» LIONTRUST COURAGE - POWER - PRIDE Trading update
Slide 4: Highlights
Highlights Net outflows of £1.6 billion in the three months ended 30 September 2022 and £2.2 billion for the six months ended 30 September 2022 Assets under management and advice (“AuMA”) were £31.7 billion as at 30 September 2022, a decrease of 5.5% over the financial year Majedie Asset Management
Slide 5: Highlights: AuMA
Highlights: AuMA On 30 September 2022, our AuMA stood at £31,695 million and were broken down by type and investment process as follows: Institutional UK Retail International Accounts & Investment Funds & Alternative Funds & Total Funds Trusts MPS Funds Accounts Process (£m) (£m) (£m) (£m) (£m) (£m)
Slide 6: Highlights: Flows
Highlights: Flows Liontrust recorded net outflows of £1,646m in the three months to 30 September 2022 (2021: net inflows of £1,085m). A reconciliation of fund flows and AuMA over the three months to 30 September 2022 is as follows: Institutional UK Retail International Accounts & Investment Funds &
Slide 7: Highlights: Fund management changes announced July 2022
Highlights: Fund management changes announced July 2022 Global Innovation team – new investment team headed by James Dowey and Storm Uru and supported by Clare Pleydell-Bouverie. The Global Innovation team will be responsible for managing the Liontrust Global Innovation Fund and the Liontrust Global
Slide 8: Key metrics
» LIONTRUST COURAGE - POWER - PRIDE Key metrics
Slide 9: Key metrics – September 2022
Key metrics – 30 September 2022 AuMA by product AuMA by client type* AuMA by process UK Retail Funds & MPS £25,746 81% Financial Adviser 39% Sustainable Investment £11,005m 35% Institutional Accounts & Funds 2,666 8% Wealth Manager 17% Economic Advantage £7,577m 24% International Funds
Slide 10: Key statistics
Key statistics Acquisition timeline ATI Neptune Architas Majedie FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 H1 FY23 AUMA (£bn) 3.0 3.6 4.5 4.8 6.5 10.5 12.7 16.1 30.9 33.5 31.7 % change 20% 25% 7% 35% 62% 21% 27% 92% 8% (5)% Revenue (£m) 20.3 28.4 36.8 44.9 51.6 76.8 84.6 106.6 163.8 231.3 %
Slide 11: Key metrics – November 2022
Key metrics – November 2022 Percentage of NAV by region Percentage of NAV by asset class Americas 19% Bonds 12% Asia 3% Equities 69% Europe ex UK 17% Funds 17% UK 62% Derivatives 2% Bond NAV by region Equity NAV by region Funds of Funds NAV by region 11% 15% 1% 24% 23% 4% 56% 65% 16%
Slide 12: Diversification of AuMA
Diversification of AuMA Visual representation of the 30 September 2022 AuMA Sustainable Future Economic Advantage Multi-Asset Funds Global Fundamental Institutional Funds & Accounts UK Retail Investment Funds Trusts Multi-Asset Portfolios Intl Global Equity Cashflow Solution Global GFI Innovation So
Slide 13: Strategic objectives
» LIONTRUST COURAGE - POWER - PRIDE
Slide 14: Strategy: Six principal objectives
Strategy Six principal objectives 1 2 3 4 5 6 Be a responsible Deliver strong Expand Acquire and Enhance the Ensure strong company and long-term distribution and develop talent investor operations and investor investment products experience infrastructure performance organically and through acquisit
Slide 15: Focus areas for success
Focus areas for success Technology + Added value Growing Sales efficiency products Client Talent experience development Support Outsourcing infrastructure 14
Slide 16: Investment strength
» LIONTRUST COURAGE - POWER - PRIDE Investment strength
Slide 17: Investment performance
Investment performance Over three years to 31 October 2022, 73% of UK-domiciled funds were in the 1st or 2nd quartile of their respective IA sectors* Over five years to 31 October 2022, 86% of UK-domiciled funds were in the 1st or 2nd quartile of their respective IA sectors* At Incisive Media’s Fund
Slide 18: Awards
Awards The Liontrust Cashflow team won Best UK Manager of the Year at the Best Europe ex UK fund category Financial News’ Excellence in with the Liontrust European Dynamic Institutional Fund Management Fund Awards 2022 The Liontrust Economic Advantage Economic Advantage UK Smaller team was highly re
Slide 19: Flows and AuMA
» LIONTRUST COURAGE - POWER - PRIDE Flows and AUMA
Slide 20: Flows and market context
Flows and market context Quarterly flows One month of positive net retail sales of UK funds in 2022 to the end of July £1.1bn £1.0bn Rotation from Growth to Value from autumn £0.8bn 2021 Buyers’ strike in 1st quarter of 2022 Structural outflows from UK institutional mandates in H1 FY23 -£0.4bn -£0.5
Slide 21: Sales momentum – the Pridham Report – Q3 2022
Sales momentum – the Pridham Report – Q3 2022 Top 10 gross retail sales in Q3 2022 Top 10 net retail sales in Q3 2022 £m £m BlackRock £5,779.30 Fidelity £512.50 Legal & General IM £3,574.80 Legal & General IM £487.10 Fidelity £3,572.90 HSBC AM £383.60 HSBC AM £2,449.10 Allianz Global Investors £289.
Slide 22: Opportunities for distribution
Opportunities for distribution The multi-award winning Sustainable Investment team is seen as the market leader among intermediaries and consumers in the UK1 One area of net flows is into global equities; Global Dividend is the 3rd best performer in the IA Global Equity Income sector over 5 years2 S
Slide 23: Brand
» LIONTRUST COURAGE - POWER - PRIDE Brand
Slide 24: Brand
Brand 1 Ranked the 8th best asset management brand in the UK (Source: Broadridge’s annual survey, March 2021) 2 37% of wealth managers/financial advisers and 29% of consumers say Liontrust has the best ESG/sustainable investment team, ranking first among both (source: Research in Finance, July 2022)
Slide 25: Financials summary
» LIONTRUST COURAGE - POWER - PRIDE Financials summary
Slide 26: Half Year results for the 6 months ended 30 September 2022
Half Year results for the 6 months ended 30 September 2022 Half Year results: • Revenues £108.8 million (30 Sep 2021: £108.5 million) up 0.2% • Adjusted PBT of £42.8 million (30 Sep 2021: £39.3 million1) up 9%1 • Adjusted diluted EPS of 53.87p (30 Sep 2021: 51.82p) up 4.0%2 • Adjusted operating marg
Slide 27: Reconciliation of adjusted profit to profit before tax
Reconciliation of adjusted profit to profit before tax for the 6 months ended 30 September 2022 30 Sep 2022 30 Sep 2021 £’000 £’000 Change Profit before tax 14,066 31,063 (61)% Severance compensation and staff reorganisation costs 3,557 118 -% Professional services 4,654 3,255 43% Intangible asset a
Slide 28: Income statement (adjusted)
Income statement (adjusted) 30 Sep 2022 30 Sep 2021 £’000 £’000 Change Gross profit excluding performance fees 108,801 108,545 0.2% Performance fees - - - Gross profit 108,801 108,545 0.2% Net gains 465 50 Member/employee costs (47,530) (53,511) (11)% Depreciation (970) (959) 1% Intangible amortisat
Slide 29: Balance sheet as at 30 September 2022
Balance sheet as at 30 September 2022 30 Sep 2022 31 Mar 2022 £’000 £’000 Assets Non current assets 141,347 106,406 Current assets Trade and other receivables 218,612 235,496 Financial assets 8,461 4,168 Cash and cash equivalents 109,012 120,852 Total current assets 336,085 360,516 Liabilities Non c
Slide 30: Majedie acquisition
» LIONTRUST COURAGE - POWER - PRIDE
Slide 31: Acquisition of Majedie (completed April 2022)
Acquisition of Majedie (completed April 2022) Liontrust acquired Majedie Asset Management for an initial consideration of 3.7 million Liontrust shares (including £5.5 million regulatory capital) plus up to 0.78 million Liontrust shares and up to £23 million in cash for excess NAV and deferred consid
Slide 32: Details of the transaction
Details of the transaction Liontrust acquired the entire issued share capital of Majedie for a Consideration of up to £120 million1 consisting of: • £80 million satisfied through the issue of 3,683,241 new Ordinary Shares to Majedie shareholders at Completion (“Initial Consideration Shares”) • Up to
Slide 33: Outlook
» LIONTRUST COURAGE - POWER - PRIDE
Slide 34: Industry outlook
Industry outlook Mixed flows ESG up front and central Retail investor engagement M&A growing Private markets Solutions 33
Slide 35: Outlook for Liontrust
Outlook for Liontrust Eight investment teams with rigorous and distinct investment processes Strengthening distribution in institutional market – recent LGPS Central win to manage global sustainable equities EIT provides base to build investment trust business Expand international distribution Inves
Slide 36: Appendices
Appendices 1. Board biographies 2. Company information 3. Fund manager teams 4. Momentum of the business 5. Assets under management and advice and performance 6. Alternative Performance Measures
Slide 37: Appendix 1 – Board biographies
Appendix 1 – Board biographies Alastair Barbour – Non-Executive Chairman Joined the Board in April 2011. Alastair is a chartered accountant with 25 years’ experience spent auditing and advising boards and management of public companies in the UK and internationally, principally in the financial serv
Slide 38: Appendix 1 – Board biographies
Appendix 1 – Board biographies Vinay Abrol – Chief Operating Officer and Chief Financial Officer Joined the Board in September 2004. Vinay is responsible for overseeing all finance, information technology, operations, risk and compliance of the Group. After obtaining a first-class degree in computin
Slide 39: Appendix 1 – Board biographies
Appendix 1 – Board biographies George Yeandle – Non-Executive Director, Chairman of the Remuneration Committee Joined the Board in January 2015. George is a chartered accountant with over 30 years’ experience having specialised throughout most of his career in advising clients on executive pay and r
Slide 40: Appendix 1 – Company Secretary team
Appendix 1 – Company Secretary team Mark Jackson – Company Secretary Mark joined as Company Secretary in October 2017. Prior to joining Liontrust Mark spent 9 years at the accountancy firm Mazars where he was a Director in the National Company Secretarial department providing services to listed and
Slide 41: Appendix 2 – Company information and shareholders
Appendix 2 – Company information and shareholders Market capitalisation: £782 million ($919 Top 25 external shareholders* million) as at 14 November 2022 Shares No. Fund Manager 30 Sep 22 % 1 Sanford Deland Asset Management 4,380,000 6.75% Premium listing on the London Stock 2 Hargreaves Lansdown, s
Slide 42: Share price
Appendix 2 – Company information Liontrust Asset Management Plc – share price (pence) 3,000 2,500 2,000 Share price 1,500 1,000 500 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: Bloomberg, data from 31.12.09 to 31.10.22 41
Slide 43: Appendix 3 – Economic Advantage (UK Equity) team
Appendix 3 – Economic Advantage (UK Equity) team Economic Advantage Anthony Cross Julian Fosh Victoria Stevens Head of Economic Advantage Co-Head of Economic Advantage Fund Manager Matt Tonge Alex Wedge Natalie Bell Fund Manager Fund Manager Fund Manager Investment process The process seeks to ident
Slide 44: Appendix 3 – Sustainable Investment team
Appendix 3 – Sustainable Investment team Sustainable Investment Simon Clements Mike Appleby Harriet Parker Kenny Watson Aitken Ross Jack Willis Investment Manager Investment Manager Investment Manager Investment Manager Investment Manager Investment Manager Peter Michaelis Stuart Steven Head of Sust
Slide 45: Appendix 3 – Global Equity team
Appendix 3 – Global Equity team Global Equity Robin Geffen Ewan Thompson Thomas Smith Head of Fund Manager Fund Manager Global Equity Ruth Chambers Chris Taylor William Geffen Fund Manager Fund Manager Deputy Fund Manager Investment process The fund managers believe the key to generating outperforma
Slide 46: Appendix 3 – Cashflow Solution team
Appendix 3 – Cashflow Solution team Cashflow Solution James Inglis-Jones Samantha Gleave Co-Head of Co-Head of Cashflow Solution Cashflow Solution Investment process The fund managers focus on the historic cash flows generated and invested by companies to support their forecast profits growth. As fo
Slide 47: Appendix 3 – Multi-Asset team
Appendix 3 – Multi-Asset team Multi-Asset John Husselbee James Klempster Head of Multi-Asset Deputy Head of Multi-Asset Mayank Markanday Malachi Ferguson Victor Alabrune David Salisbury Senior Investment Manager Analyst Analyst Analyst Investment process There are five key stages to the investment p
Slide 48: Appendix 3 – Global Fixed Income team
Appendix 3 – Global Fixed Income team Global Fixed Income Phil Milburn Donald Phillips SR Sharmin Rahman Emma Veitch Co-Head of Co-Head of Investment Manager Investment Analyst Global Fixed Income Global Fixed Income Investment process The process is designed to take advantage of inefficiencies in f
Slide 49: Appendix 3 – Global Innovation team
Appendix 3 – Global Innovation team Global Innovation James Dowey Storm Uru Clare Pleydell-Bouverie Co-Head of Co-Head of Deputy Fund Manager Global Innovation Global Innovation Investment process Stage 1 Stage 3 We limit the investible universe to equity securities trading in either developed or Th
Slide 50: Appendix 3 – Global Fundamental team
Appendix 3 – Global Fundamental team Global Fundamental James de Uphaugh Chris Field Dan Ekstein Ed Jeans Emily Barnard Head of Global Fundamental Fund Manager Fund Manager Equity Analyst Equity Analyst Hong Yi Chen Imran Sattar John King Matthew Smith Tinger Wen Fund Manager Fund Manager Fund Manag
Slide 51: Appendix 4 – Retail and International Sales
Appendix 4 – Retail and International Sales Ian Chimes Head of Global Distribution Multi-Asset Regional “Whole of Single Strategy International Sales Market” Sales Sales Sales Louis Stevens Jonathan Harbottle Andrew Taylor Mark Wright Stephen Corbett James Beddall 10 strong Multi-Asset Head of Sales
Slide 52: Appendix 4 – Institutional Business team
Appendix 4 – Institutional Business team Harry Steel Head of Institutional Business Jessica Ironside Frank Doyle James Mowat Mark Hepburn Head of Institutional Head of UK Institutional Head of Investment Head of Institutional Client Service Sales Companies International Sales As at 15 November 2022.
Slide 53: Appendix 4 – Awards: 2021
Appendix 4 – Awards: 2021 Professional Pensions Investment Awards 2021 Investment Week Fund Manager of the Year Awards UK Equity Manager of the Year 2021 – Global Growth Liontrust Asset Management Liontrust Sustainable Future Global Growth Fund Financial News Asset Management Awards 2021 Investment
Slide 54: Appendix 5 – AuMA by process and product as at 30 September 2022
Appendix 5 – AuMA by process and product as at 30 September 2022 (£m) By process and product Sustainable Economic Global Global Global Fixed £m Investment Advantage Multi-Asset Equity Global Innovation Cashflow Solution Fundamental Income Total Total AuMA 11,005 7,577 5,893 1,163 535 989 4,089 444 3
Slide 55: Appendix 5 – Liontrust UK fund performance to 31 October 2022
Appendix 5 – Liontrust UK fund performance to 31 October 2022 Since Inception/Manager/ 1 Year 3 Years 5 Years Objective change* % change Fund CBM1 CBM2 Sector Q Fund CBM1 CBM2 Sector Q Fund CBM1 CBM2 Sector Q Fund CBM1 CBM2 Sector Q Date Economic Advantage Liontrust UK Growth I Inc -2.6% -2.8% - -12
Slide 56: Appendix 5 – Global Equity team fund performance
Appendix 5 – Global Equity team fund performance to 31 October 2022 1 Year 3 Years 5 Years Since Inception % change Fund CBM Sector Q Fund CBM Sector Q Fund CBM Sector Q Fund CBM Sector Q Date Liontrust Balanced C Acc* -15.9% -10.5% -10.5% 4 18.0% 6.3% 6.3% 1 31.0% 12.9% 12.9% 1 862.0% 188.9% 188.9%
Slide 57: Appendix 5 – Sustainable Investment team fund performance
Appendix 5 – Sustainable Investment team fund performance to 31 October 2022 1 Year 3 Years 5 Years Since Inception % change Fund CBM Sector Q Fund CBM Sector Q Fund CBM Sector Q Fund CBM Sector Q Date Liontrust Sustainable Future -17.8% -21.3% -17.8% 2 -11.8% -17.6% -13.1% 2 -6.4% -9.0% -5.9% 2 51.
Slide 58: Appendix 5 – Multi-Asset fund performance
Appendix 5 – Multi-Asset fund performance to 31 October 2022 % change 1 Year 3 Years 5 Years Since Inception Fund Fund RBM Q Fund RBM Q Fund RBM Q Fund RBM Q Date Liontrust MA Active Dynamic S Acc -13.2% - - 10.4% - - 15.8% - - 239.0% - - 01/03/2004 Liontrust MA Active Growth S Acc -13.0% - - 6.5% -
Slide 59: Appendix 5 – Global Fundamental (ex Majedie) fund performance
Appendix 5 – Global Fundamental (ex Majedie) fund performance to 31 October 2022 1 Year 3 Years 5 Years Since Inception % change Fund CBM Sector Q Fund CBM Sector Q Fund CBM Sector Q Fund CBM Sector Q Date Liontrust Tortoise Fund C Acc GBP 15.4% - - - 46.9% - - - 31.1% - - - 62.9% - - - 24/02/2012 L
Slide 60: Appendix 5 – Non-UK UCITS performance
Appendix 5 – Non-UK UCITS performance to 31 October 2022 YTD 1 Year 3 Years Since Inception % change Fund CBM1 CBM2 Fund CBM1 CBM2 Fund CBM1 CBM2 Fund CBM1 CBM2 Date Economic Advantage Liontrust GF Special Situations C3 -16.3% -5.0% - -14.1% -2.8% - 5.3% 7.1% - 113.6% 83.3% - 08/11/2012 Inst Acc GBP
Slide 61: Appendix 6 – Alternative Performance Measures (APMs)
Appendix 6 – Alternative Performance Measures (“APMs”) The Group uses the following APMs: Adjusted profit before tax* Definition: Profit before taxation, amortisation, and non-recurring items (which include: professional fees relating to acquisitions; restructuring and severance compensation related
Slide 62: Appendix 6 – APMs (continued)
Appendix 6 – APMs (continued) Gross profit excluding performance fees Definition: Gross profit less any revenue attributable to performance related fees. Reconciliation: Note 4. Reason for use: This is used to present a consistent year on year measure of gross profits within the business, removing t
Slide 63: Appendix 6 – APMs (continued)
Appendix 6 – APMs (continued) Average Assets under Management and Advice Definition: The average of aggregate assets managed or advised by the Group during the financial year Reconciliation: Average AuMA for the year is the average of each month end aggregate AuMA during the period. Reason for use:
Slide 64: Key risks
Key risks Past performance is not a guide to future performance. The value of an investment and the income generated from it can fall as well as rise and is not guaranteed. You may get back less than you originally invested. All Liontrust Funds carry some degree of risk which may have an adverse eff
Slide 65: Disclaimer
Disclaimer Important notice This presentation is issued by Liontrust Asset Management PLC and Liontrust Fund Partners LLP (LFP) (both 2 Savoy Court, London WC2R 0EZ). LFP is authorised and regulated in the UK by the Financial Conduct Authority (FRN 518165) to undertake regulated investment business.
Liontrust Asset Management — H1 FY2023 Earnings Presentation on 6ix