Polar Capital Holdings Plc · LSE:POLR
Polar Capital — H1 2016 Earnings Presentation
23 slides from Polar Capital's earnings presentation, December 2015
Slide 1: Interim Results Presentation December 2015
Interim Results Presentation December 2015 Tim Woolley (CEO) John Mansell (COO) This presentation is for one-on-one use with non-US professional investors only www.polarcapital.co.uk
Slide 2: Contents
Contents Section I • Business Review Section II • Financial Review For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 2
Slide 3: Financial Review Highlights
Financial Review Highlights • AUM – AUM at 30 September 2015 US$10.9bn from US$13.4bn at September 2014 – AUM at 30 November 2015 US$12.0bn • Profitability – Pre-tax (pre SBP) profits £13.3m (2014: £12.7m) – Core operating profit excluding performance fees £12.4m (2014: £13.9m) • EPS and Dividend –
Slide 4: Polar Capital AUM: Significant AUM growth but not linear
Polar Capital AUM Significant AUM growth but not linear $bn 16 14 $13.4 $13.2 $12.3 $12.0 12 $11.4 $10.9 10 8 $7.2 6 $5.1 $5.3 $3.9 $3.9 4 $3.1 $2.5 $1.9 2 $1.5 0 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Nov-15 Source: Polar Capital, 30 Septem
Slide 5: AUM Growth Analysis
AUM Growth Analysis 30 Sep 2014 30 Sep 2015 % Increase US$’m US$’m Year on Year Japan 5,300 3,034 (42.8%) Long Only (ex Japan) 7,139 6,759 (5.3%) Technology 1,899 1,866 (1.7%) Healthcare 1,170 1,452 24.1% Financials 979 1,033 5.5% GEMs 972 504 (48.1%) North America 2,024 1,761 (13%) Global Alpha 95
Slide 6: AUM Flows
AUM Flows AUM at 31 March 2014 $13.2bn Gross inflows Total [long 3,989 hedge 475] $4,464m Gross outflows Total [long 6,216 hedge 290] $(6,506)m Net flows $(2,042)m Performance and currency movements $1,049m AUM at 31 March 2015 $12.3bn Gross inflows quarter 1 [long 805 hedge 69] $874m quarter 2 [lon
Slide 7: AUM Analysis
AUM Analysis AUM split by strategy Investor mix by geography UK 61.3% Long Only 89.6% Europe 32.1% Alternative 10.4% USA 3.8% Other 2.8% AUM split by business unit Investor mix by holdings Japan 27.8% Bank 27.5% Technology 17.1% Private Wealth Manager 16.5% North American 16.1% Polar Investment Comp
Slide 8: Product Concentration
Product Concentration March March March September 2013 2014 2015 2015 Technology 17% 14% 17% 17% Japan 33% 43% 31% 28% North America - 13% 16% 16% Europe 10% - - - Total of top 3 strategies 60% 70% 64% 61% Number of teams 11 9 11 11 Number of teams with assets > 7 7 7 7 $500m Number of teams with as
Slide 9: Fund Capacity
Fund Capacity Strategies AUM 30 September 2015 Capacity Technology $1.9bn $2bn+ Japan $3.0bn $5bn+ Europe $0.7bn $1bn+ Healthcare $1.5bn $5bn+ Financials $1.0bn $2bn+ Convertibles $0.4bn $1bn+ Emerging Markets $0.5bn $2bn+ North America $1.8bn $3bn+ Global Equity $0.1bn $5bn+ UK Equity ARF - $1bn+ E
Slide 10: Investment Teams: The original vision still holds true
Investment Teams The original vision still holds true Ten to twelve world class investment teams Pre 2010 2010 2011 2012 2013 2014 2015 Technology Technology Technology Technology Technology Technology Technology Japan Japan Japan Japan Japan Japan Japan Europe Europe Europe Europe Europe Europe Eur
Slide 11: Product Overview
Product Overview Long only Alternative UCITS Cayman Global Technology European Forager Japan Japan Alpha European Conviction Healthcare Opportunities ALVA Global Convertible Asian Financials Financial Opportunities Income Opportunities UCITS Global Insurance Global Convertibles Emerging Markets Grow
Slide 12: Lipper Figures
Lipper Figures 6 months 1 year 3 years 5 years Since inception % Growth to % Growth to % Growth to % Growth to % Growth to universe position/ universe position/ universe position/ universe position/ universe position/ universe total Quartile universe total Quartile universe total Quartile universe t
Slide 13: Alternative Strategies September 2015
Alternative Strategies 30 September 2015 Annualised returns Strategies Inception date YTD 3 years 5 years Inception Forager (AX EUR) 1 August 2003 -1.48% 5.67% 7.28% 9.99% Conviction (EUR) 1 April 2006 -13.17% -1.73% 1.08% 3.84% ALVA (A USD) 1 November 2010 1.38% 4.97% n/a 5.14% Global Convertibles
Slide 14: Sales & Marketing
Sales & Marketing Head of Distribution Secretarial Support Iain Evans Charlotte Keane Head of International Business Development James Brandt North America EMEA Global Banks Institutional UK Third Party Distributor Sales Manager, Sales Manager Capital Growth Advisors Institutional Consultant Head of
Slide 15: Goals and Strategy
Goals and Strategy Goals • To be a leading global investment management boutique • To be a strong dependable partner to our clients offering them a range of interesting and differentiated investment products • To deliver first quartile performance over the investment cycle • To maintain a robust ope
Slide 16: Profitability – by period
Financial Review Profitability – by period 6 months 6 months Year 6 months to September 14 to March 15 to March 15 to September 15 Average AUM US$13.5bn US$12.9bn US$13.1bn US$11.8bn Core operating profit £13.9m £13.8m £27.7m £12.4m Performance fee profit - £5.2m £5.2m - Interest and similar income
Slide 17: Financial Review Costs
Financial Review Costs 6 months 6 months Year 6 months to September 14 to March 15 to March 15 to September 15 Salaries and bonuses £8.5m £8.2m £16.7m £8.4m Core distributions £9.2m £10.3m £19.5m £9.2m Core compensation costs £17.7m £18.5m £36.2m £17.6m NIC on options £0.5m £1.4m £1.9m £0.3m Other o
Slide 18: Financial Review Other operating costs
Financial Review Other operating costs 6 months 6 months Year 6 months Comments to Sep 14 to March 15 to March 15 to Sep 15 IT £2.1m £1.8m £3.9m £2.0m Rent and rates £0.8m £0.9m £1.7m £1.4m Professional fees £0.4m £0.3m £0.7m £0.4m Insurance £0.3m £0.2m £0.5m £0.2m Travel and entertainment £0.7m £0.
Slide 19: Financial Review Cash and investments
Financial Review Cash and investments September 2014 March 2015 September 2015 £m £m £m Cash £23.0m £41.4m £25.1m Available for sale investments Alternative fund seed £20.6m £21.2m £22.5m Long only seed £ 19.8m £30.5m £27.5m £40.4m £51.7m £50.0m Total cash and investments £63.4m £93.1m £75.1m Source
Slide 20: Financial Review Dividend
Financial Review Dividend • First dividend of 5.5p payable January 2016 (2015: 5.5p) – Dividend half of first half’s core earnings – Total dividend will be predicated on total core earnings and performance fees received in the year – Company considering bringing forward July 16 dividend to March 16
Slide 21: Shareholder analysis at 30 September 2015
Financial Review Shareholder analysis at 30 September 2015 Holding Percentage Directors, founders and staff 27.9m 31% Caledonia 7.8m 9% XL 7.0m 8% EBT 1.2m 1% Blackrock 6.4m 7% Hargreave Hale 6.4m 7% Liontrust 3.3m 4% Standard Life 2.8m 3% Free Float = 51% Artemis 2.8m 3% Rathbone 2.6m 3% Others 21.
Slide 22: Summary: Well positioned for long-term growth
Summary Well positioned for long-term growth Funds and • Expanded and differentiated product offering performance • Good performance across a wide range of funds • Significant potential for further growth Fund capacity • Total current capacity in the funds of > US$29 billion, of which only US$12.0 b
Slide 23: Important Information
Important Information Polar Capital 16 Palace Street London SW1E 5JD House View This document has been produced based on Polar Capital research and analysis and represents our house view. All sources are Polar Capital unless otherwise stated. Important Information The information provided in this pr
Polar Capital Holdings — H1 2016 Earnings Presentation on 6ix