Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — Investor Presentation (September 2021)
21 slides from Virtus Investment Partners's investor presentation, Sep 30, 2021
Slide 1: Virtus KAR Mid-Cap Growth Fund
VIRTUS KAR MID-CAP GROWTH FUND September 30, 2021
Slide 2: Important Risk Considerations
IMPORTANT RISK CONSIDERATIONS Equity Securities The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk. Market Volatility Local, regional, or glo
Slide 3: Virtus Investment Partners: Multi-Boutique, Multi-Strategy Model
VIRTUS INVESTMENT PARTNERS MULTI-BOUTIQUE, MULTI-STRATEGY MODEL Key Facts: Virtus affiliates2 Select external subadvisers $177.3 Billion in AUM1 AFFILIATE 10 SHARED SUPPORT Affiliates2 OPERATIONS AND IT HUMAN RESOURCES FUND SERVICES + 7 Select LEGAL AND COMPLIANCE Subadvisers FINANCE PRODUCT MANAGEM
Slide 4: Kayne Anderson Rudnick (KAR) Profile
KAYNE ANDERSON RUDNICK (KAR) PROFILE At a Glance Originally established to manage founder capital Year Founded: 1984 Over three decades of experience Headquarters: A differentiated “business analyst” investment approach focusing on Los Angeles, CA high-quality businesses AUM: $62.0 billi
Slide 5: KAR Growth Equity Team
KAR GROWTH EQUITY TEAM Research Years Portfolio Manager/Analyst Responsibility Sector Coverage Experience with KAR Douglas S. Foreman, CFA Chief Investment Officer Technology 35 Years 10 Years Portfolio Manager Chris Armbruster, CFA Portfolio Manager Consumer Discretionary 16 Years 8 Years Senior Re
Slide 6: Why Mid Cap? An Underutilized Space
WHY MID CAP? AN UNDERUTILIZED SPACE $2.4 T Russell 3000® Index 3,000 largest U.S. stocks 12% of U.S. Equity 98% of the U.S. equity Mutual Fund Assets* market cap LARGEST 12% $2.4 T 8% $69.6 B Russell Midcap® 80% Index 24% of the 24% of the Russell 3000® Index U.S. Equity Market Small Mid Large $1.6
Slide 7: Why Mid Cap?
WHY MID CAP? Stronger historical returns than large caps… …with less volatility than small caps TOTAL RETURN (ANNUALIZED) STANDARD DEVIATION 20 years ended 9/30/2021 20 years ended 9/30/2021 11.41% 19.57% 16.88% 9.51% S&P 500® Russell Russell 2000® Russell Index Midcap® Index Index Midcap® Index Pas
Slide 8: KAR's Tenets of Quality
KAR’S TENETS OF QUALITY QUALITATIVE BUSINESS ASSESSMENT Competitive Protection Owner-Oriented Management Brand/Reputation Cultivates Competitive Advantage Network Effect Rational Capital Allocation Scale/Cost Advantage Considers Stakeholder Interests Benchmarking Standard High Custom
Slide 9: KAR's Sources of Quality
KAR’S SOURCES OF QUALITY EXAMPLES OF HIGH-QUALITY BUSINESS MODELS Network Effect Cost Advantage High Customer Brand Franchise Switching Costs Source: Kayne Anderson Rudnick The trademarks shown are the property of their respective owners. Percent of Virtus KAR Mid-Cap Growth Fund as of 9/30/21: Merc
Slide 10: Development of High-Quality Universe
DEVELOPMENT OF HIGH-QUALITY UNIVERSE KAR SOURCES ITS INVESTMENT UNIVERSE IN A NUMBER OF WAYS Qualitative Methods MID-CAP UNIVERSE Investment conferences Meetings with companies Industry reviews Research on existing portfolio holdings Third-party research KAR Universe Quantitative Screens
Slide 11: KAR's Intensive Fundamental Research
KAR’S INTENSIVE FUNDAMENTAL RESEARCH KAR research analysts and the portfolio managers work side-by-side to develop an information advantage Qualitative Analysis Financial Analysis Valuation Analysis Purpose Purpose Purpose Evaluate sustainability of business Assess the potential for superior Determi
Slide 12: Portfolio Construction
PORTFOLIO CONSTRUCTION Investment Guidelines Sell Discipline Position Weights Negative Company or Industry Changes 25-50 holdings Position review when: Maximum initial position size is 5% (at cost) – Stock price declines 20% or more in a short time period absent a broad market decline Maximu
Slide 13: Risk Management and Portfolio Monitoring
RISK MANAGEMENT AND PORTFOLIO MONITORING Risk Management Portfolio Monitoring Investment Philosophy CIO/PM Meetings Focus on “high-quality” companies Chief Investment Officer and the Portfolio Managers Company’s “business risk” is primary risk control factor meet to review, discuss, and explai
Slide 14: Portfolio Characteristics
PORTFOLIO CHARACTERISTICS Virtus KAR Russell S&P Mid-Cap Midcap® 500® Quality Growth Fund Growth Index Index Description† Return on Equity—Past 5 Years 22.3% 18.9% 21.6% In a market of average businesses, KAR seeks to own protected proprietary businesses that Total Debt/EBITDA 3.7 x 4.9 x 2.9 x gene
Slide 15: Sector Allocations
SECTOR ALLOCATIONS Virtus KAR Mid‐Cap Growth Fund Russell Midcap® Growth Index 40.1% 34.3% 19.6% 17.8% 16.3% 14.4% 11.4% 9.6% 9.0% 8.8% 5.0% 4.9% 1.8% 1.6% 1.9% 1.8% 1.6% 0.0% 0.0% 0.0% 0.0% 0.1% Information Consumer Health Industrials Consumer Financials Communication Real Materials Energy Utilitie
Slide 16: Portfolio Attributes
PORTFOLIO ATTRIBUTES VIRTUS KAR MID-CAP GROWTH FUND TOP TEN HOLDINGS Sector % of Portfolio Bill.com Holdings Inc. Information Technology 6.3 MercadoLibre Inc. Consumer Discretionary 5.8 SiteOne Landscape Supply Inc. Consumer Discretionary 3.8 Avalara Inc. Information Technology 3.5 DocuSign Inc. Inf
Slide 17: Performance Review
PERFORMANCE REVIEW As of September 30, 2021 (%) PICMX Index MORNINGSTAR RATINGSTM Mid-Cap 30.45 I Share Growth 27.64 27.90 Time Period # of Stars # of Funds 23.35 Overall ★★★★★ 549 20.41 3 Year ★★★★★ 549 19.14 19.27 17.54 5 Year ★★★★★ 495 12.09 11.59 10 Year ★★★★★ 386 9.60 Morningstar ratings are ba
Slide 18: Virtus KAR High-Quality Equity Funds
VIRTUS KAR HIGH-QUALITY EQUITY FUNDS Quality-Driven Strategies Across Market Caps and Borders Kayne Anderson Rudnick’s investment philosophy is rooted in quality, with a focus on wealth preservation. Decades of management experience has yielded a rigorous definition of quality, which guides where th
Slide 19: Definitions
DEFINITIONS QUALITY Free Cash Flow Yield—An overall return evaluation ratio of a stock, which standardizes Return on Equity - Past 5 Years—relates how well the company is using the money the free cash flow per share a company is expected to earn against its market price per invested in it so that it
Slide 20: Index Definitions
INDEX DEFINITIONS The Russell 2000® Value Index is a market capitalization-weighted index of value- The MSCI ACWI ex U.S. Small Cap Index (net) is a free float-adjusted market oriented stocks of the smallest 2,000 companies in the Russell Universe, which capitalization-weighted index that measures s
Slide 21: About Virtus Investment Partners
Virtus (NASDAQ: VRTS) is a distinctive partnership of boutique investment managers, singularly committed to the long-term success of individual and institutional investors. We are not constrained by a single investment approach; rather, we provide access to independent, specialized investment phil
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