Slide 1: Pacific Current Group Full Year Results
33° 51' 50.457" S, 151° 12' 23.437" E Level 29, 259 George Street, Sydney NSW 2000 T: +61 2 8243 0400 // F: +61 2 8243 0410 31 August 2018 PACIFIC CURRENT GROUP FULL YEAR RESULTS Year ended 30 June 2018 HIGHLIGHTS • Underlying NPBT of A$18.6m for the full year, up 7.5% compared to A$17.3m in FY17; •
Slide 2: Portfolio Company Highlights
33° 51' 50.457" S, 151° 12' 23.437" E Level 29, 259 George Street, Sydney NSW 2000 T: +61 2 8243 0400 // F: +61 2 8243 0410 PORTFOLIO COMPANY HIGHLIGHTS Total funds under management (FUM) at 30 June 2018 was A$75.2bn, up 45% from the end of FY17, mainly due to strong inflows at GQG Partners (GQG) an
Slide 3: Investments and Outlook
33° 51' 50.457" S, 151° 12' 23.437" E Level 29, 259 George Street, Sydney NSW 2000 T: +61 2 8243 0400 // F: +61 2 8243 0410 In July 2018, the Company announced a new strategic investment in Victory Park Capital (Victory Park), a Chicago-based alternative investment firm focused on providing flexible
Slide 4: Conference Call
33° 51' 50.457" S, 151° 12' 23.437" E Level 29, 259 George Street, Sydney NSW 2000 T: +61 2 8243 0400 // F: +61 2 8243 0410 CONFERENCE CALL Investors and analysts are invited to participate in a conference call at 11:00am AEST on Monday, 3 September 2018 to be hosted by Pacific Current Group’s Chair
Slide 5: FY2018 Results
F Y 2 0 1 8 R E S U LT S For the full-year ended 30 June 2018 PRESENTERS: Paul Greenwood, Managing Director & CEO and Global CIO Joseph Ferragina, CFO & COO ASX : PAC Tony Robinson, Executive Director
Slide 6: Disclaimer
Disclaimer The information in this presentation is general information about Pacific Current Group (‘Pacific Current’ or ‘PAC’) and is current only at the date of this presentation. In particular, this presentation: ❯ is not an offer or recommendation to purchase or subscribe for securities in Pacif
Slide 7: Agenda
Agenda 1. Overview 2. Portfolio Update 3. Financials 4. Q & A 5. Appendix // 3
Slide 8: Overview
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Slide 9: Overview – FY18 Highlights
Overview – FY18 Highlights ❯ Financial Strength – Improved operating results ❯ Structural Simplification – Cleaned up and simplified corporate structure ❯ Portfolio Growth – Exceptionally rapid FUM growth, with mixed investment performance during the year ❯ Portfolio Management – A very active year
Slide 10: Overview – FY18 Highlights
Overview – FY18 Highlights ❯ Financial Strength • Underlying net profit after tax of A$17.8m compared to A$16.6m in FY17 • Statutory profit of A$93.2m compared to a loss of A$70.1m in FY17 • Dividend of A$0.22 per share, which compares to A$0.18 per share in FY17 • Underlying EPS of 37.4c vs 53.3c i
Slide 11: Overview – FY18 Highlights
Overview – FY18 Highlights ❯ Portfolio Management • Sale of 40% stake in Investors Mutual Limited (IML) for approximately A$120m • Increased equity stake in EAM Global Investors from 15% to 18.75% to facilitate management’s repurchase from an outside shareholder • Exited nine-year investment in Good
Slide 12: Overview – FY18 Highlights
Overview – FY18 Highlights ❯ Investment Opportunities • PAC is involved in multiple late-stage discussions with potential investment targets • The number and quality of these discussions make us confident that the Aperio proceeds can be deployed in a timely manner to increase earnings and improve di
Slide 13: FY18 Financial Results Summary
FY18 Financial Results Summary 3% » Total FUM of boutiques reaches A$75.2bn 35% Core boutiques: A$46.7bn A$75.2bn* FUM Growth boutiques: A$26.5bn 62% Other boutiques: A$2.1bn A$17.8m** » Underlying Net Profit After Tax of A$17.8m, NPAT 7.2% up 7.2% from A$16.6m in FY17 A$93.2m statutory A$18.6
Slide 14: Overview of PAC
Overview of PAC Aurora Trust Core Boutiques Growth Boutiques Other Boutiques Diversified China ETF International equity real assets index provider International and Australian Customised tax emerging markets small cap managed equity small cap Australian REIT & unlisted property Global listed Global
Slide 15: Boutique Results – Core Boutiques
Boutique Results Core Boutiques Key Metrics Diversified real assets FY17 FY18 Customised tax FUM as at 30 June A$45.3b A$46.7b managed equity Global listed Revenue for the full year A$154.6m A$129.6m infrastructure US equities Earnings to the Group* A$33.7m A$21.4m » PAC sold its interests in IML on
Slide 16: Boutique Results – Growth Boutiques
Boutique Results Growth Boutiques Key Metrics FY17 FY18 International equity International and emerging markets FUM as at 30 June A$14.2b A$26.5b small cap Global and Revenue for the full year A$22.1m A$59.3m emerging markets equity Earnings to the Group* A$0.3m A$4.6m Private equity and real assets
Slide 17: Boutique Results – Other Boutiques
Boutique Results Other Boutiques Key Metrics China ETF index provider FY17 FY18 Australian small cap FUM as at 30 June A$2.5b A$2.1b Australian REIT & unlisted property Revenue for the full year A$16.8m A$18.6m Private equity and hedge fund placement agent Earnings to the Group* A$1.3m A$3.9m Altern
Slide 18: Portfolio Update
P O R T F O L I O U P D AT E
Slide 19: Portfolio – Highlights
Portfolio Company Update – Highlights ❯ Portfolio Company Developments • 11 out of 12 portfolio companies managing assets grew FUM during the year • GQG and Aperio collectively had approximately A$20B of net inflows • EAM and ROC also made solid FUM progress • Performance strong among Growth compani
Slide 20: Portfolio FUM June 2017 vs June 2018
Portfolio Company Update FUM 30 June 2017 vs. 30 June 2018 (in each manager’s home currency) Core Boutiques Growth Boutiques Other Boutiques 30 16 1.5 +33% 14 +127% 25 30-Jun-17 30-Jun-17 30-Jun-17 1.2 30-Jun-18 30-Jun-18 30-Jun-18 12 20 10 0.9 15 8 +122% +32% +6% +21% 0.6 6 10 +15% 4 0.3 5 -4.4% 2
Slide 21: Summary of Boutique Economics
Summary of Boutique Economics Core Boutiques Growth Boutiques Other Boutiques Traditional Economics Economics to PAC are broadly correlated with their equity ownership in the funds Non-Traditional Economics Economics to PAC are leveraged to revenue and FUM growth of the funds. ❯ PAC earnings from Co
Slide 22: Core Boutiques
Core Boutiques Boutique: Equity Ownership: 100% 23.4% (Sale of all ownership pending.) PM / CIO: Sean Goodrich and Troy Schell Patrick Geddes (CEO) Economics: 100% of excess management fee* Equity share FUM (30 June 18): US$1.3bn US$25.7bn State of NJ announced SMA of US$135m in Jan Fund Flows: 2018
Slide 23: Core Boutiques
Core Boutiques Boutique: Equity Ownership: 100% preferred equity, 50% common equity 10% (Sale of remaining ownership pending.) PM / CIO: Gerald Seizert, David Collon and Edward Eberle Richard Elmslie and Nick Langley Preferred profit share, reduced to pro rata after Economics: Equity certain milesto
Slide 24: Growth Boutiques
Growth Boutiques Boutique: Equity Ownership: 25% 20% PM / CIO: Dan Kim Andrew Charlesworth Economics: Equity share Equity and revenue share FUM (30 June 18): US$774m £0 FUM inflows slowed in FY18; promising Intends to launch both private and listed Fund Flows: developments with consultants infrastru
Slide 25: Growth Boutiques
Growth Boutiques Boutique: Equity Ownership: 18.75%* 5% PM / CIO: Travis Prentice and Josh Moss Rajiv Jain Economics: Equity and revenue share Revenue share FUM (30 June 18): US$865m US$13.6bn Rapid FUM growth in FY18 with strong pipeline Fund Flows: Growing exceptionally rapidly since launch of opp
Slide 26: Growth Boutiques
Growth Boutiques Boutique: Equity Ownership: 17.6% PM / CIO: Michael Lukin and Shaw Ng Economics: Equity share FUM (30 June 18): A$5.9bn Fund Flows: Significant uptick in 1H18 First Investment: Supported management buyout in 2014 Specialised investment firm offering both Commentary: pooled and custo
Slide 27: Other Boutiques
Other Boutiques » Provides direct exposure to Chinese markets primarily through a series of China indexes » Revenue generated through an index licensing agreement » Equity ownership: 36%, June-18 FUM: US$574m » Australian small cap fund providing above-benchmark returns over the medium to long term
Slide 28: Financials
FINANCIALS
Slide 29: Underlying Financial Results of PAC
Underlying Financial Results of PAC Pro forma PAC P&L on a ‘look-through’ basis adjusted for one-off/non-cash items PAC ❯ Excludes non-recurring and/or non-cash P&L Highlights (A$m) Pro Forma* FY18 items to show underlying business performance Revenue 7.8 Share of earnings from boutiques 29.9 ❯ Aeth
Slide 30: Q&A
Q&A
Slide 31: Appendix
APPENDIX
Slide 32: PAC – Statutory P&L
PAC – Statutory P&L PAC PAC Statutory Statutory ❯ Results for FY18 are P&L Highlights (A$m) FY17* FY18 % Change consolidated with Seizert, Revenue 42.1 46.4 10.2% Aether, SCI and Midco Net gains on investments 3.5 103.0 nm ❯ Final dividend of A$0.22 Employee expenses 22.2 22.6 1.8% declared by the b
Slide 33: PAC – Underlying P&L
PAC – Underlying P&L Underlying P&L (A$m) FY18 ❯ Impairment of investment relates to NLAA Statutory Net Profit After Tax 93.2 Impairment of investments 4.9 ❯ Gain on sale of investment Loss on revaluation of investment held at FVTPL 1.2 reflects sale of IML and Amortisation of identifiable intangibl
Slide 34: PAC – Balance Sheet
PAC – Balance Sheet ❯ Reflects consolidation of Aether, Seizert, Balance Sheet – PAC (A$m) FY18 Midco and its subsidiaries Current Assets 141.2 Non-Current Assets ❯ Carrying values have been tested and/or adjusted for impairment Other financial assets 78.8 Investments in associates 46.0 ❯ Deferred t