Polar Capital Holdings Plc · LSE:POLR
Polar Capital — FY2013 Earnings Presentation
25 slides from Polar Capital's earnings presentation, June 2013
Slide 1: Results Presentation June 2013
Results Presentation June 2013 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 An S&P Capital IQ Fund Award represents an opinion only and should not be relied on when making an investment decision. S&P Capital IQ Fund Awards are not a financial promotion and are not intended to predict future results nor do th
Slide 3: Financial Review Highlights
Financial Review Highlights • AUM – AUM at 31 March 2013 increased 41% to US$7.20bn from US$5.08bn at March 2012 • Profitability – Pre-tax (pre SBP) profits up 59% to £15.3m (2012: £9.6m) – Core operating profit excluding performance fees £10.0m (2012: £7.1m) • EPS and Dividend – Adjusted diluted EP
Slide 4: Business Review – AUM Flows
Business Review – AUM Flows AUM at 31 March 2012 US$5.08bn Gross inflows quarter 1 [long 599 hedge 16] $615m quarter 2 [long 404 hedge 35] $439m quarter 3 [long 732 hedge 58] $790m quarter 4 [long 1,140 hedge 37] $1,177m US$3,021m Gross outflows quarter 1 [long 232 hedge 9] $(241)m quarter 2 [long 3
Slide 5: AUM Analysis
AUM Analysis AUM split by strategy Investor mix by geography Hedge Funds 11.6% UK 63.2% Long Only 88.4% Europe 27.6% USA 4.5% Other 4.7% AUM split by business unit Investor mix by holdings Japan 33.1% Banks 29.0% Technology 17.4% Polar Capital Investment Companies 14.1% European 9.7% 13.9% Private W
Slide 6: Is Our Diversification Strategy Working?
Is Our Diversification Strategy Working? March 2010 March 2011 March 2012 March 2013 Technology 32% 36% 29% 17% Japan 27% 27% 30% 33% Europe 20% 15% 12% 10% Total 79% 78% 71% 60% Number of teams 6 8 10 11 Number of teams with assets > $500m 3 3 3 7 For non-US professional investor use only. Please r
Slide 7: 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 Technology Technology Technology Technology Technology Japan Japan Japan Japan Japan UK UK UK UK UK Europe Europe Europe Europe Europe Healthcare Healthcare Healthcare Health
Slide 8: Depth Of Global Expertise
Depth Of Global Expertise • 678 years of collective investment experience Global Technology European Long/Short Global Healthcare Japan team (2001) UK team (2001) team (2003) Globalteam (2007)team Global team (2001) team Technology Japan team UK team European team Healthcare 6 investment professiona
Slide 9: Product Overview
Product Overview Long only Hedge and absolute return UCITS Cayman Global Technology European Market Neutral Japan European Forager Japan Alpha – launched in Q4 2012 European Conviction Healthcare Opportunities Asian Financials ALVA Global Convertible Financial Opportunities Financials Income UCITS G
Slide 10: Lipper Figures For UCITS Strategies 28 March 2013
Lipper Figures For UCITS Strategies 28 March 2013 3 months 6 months 1 year 3 years 5 years % Growth to % Growth to % Growth to % Growth to % Growth to universe position/ universe position/ universe position/ universe position/ universe position/ Strategies universe total Quartile universe total Quar
Slide 11: Hedge/Absolute Return Strategies March 2013
Hedge/Absolute Return Strategies 28 March 2013 Annualised returns Strategies Inception date YTD 3 years 5 years Inception UK Absolute Return (Class I GBP) 1 3 June 2008 -2.10% -4.33% n/a -0.29% European Market Neutral (EUR) 2 4 May 2010 -0.66% n/a n/a -1.11% European Market Neutral (Class I EUR) 1 8
Slide 12: Distribution
Distribution November 2009 CEO 1 2 3 4 5 Direct 5 1 2 Support 2 November 2012 CEO Head of UK Head of North America Head of International 1 2 3 4? 1? 2? 1 2 3? Direct 8 Marketing Manager Client Support Manager 3rd Party 3rd Party 2 1 2 1 2 3 4? Germany Scandinavia ? Support 7 June 2013 CEO Head of UK
Slide 13: Polar Capital AUM: Good recovery since crisis
Polar Capital AUM Good recovery since crisis 9 $8.8 8 $7.2 7 $6.0 Billion (US$) 6 $5.3 $5.1 $5.1 5 $4.4 $4.2 $3.9 $3.9 4 $3.5 $3.1 3 $2.5 $2.6 $2.2 $1.9 2 $1.5 $1.5 1 0 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 May-13 Sourc
Slide 14: Fund Capacity
Fund Capacity Strategies AUM 31 March 2013 Capacity Technology $1.2bn $2bn+ Japan $2.4bn $3bn+ UK $0.3bn $1bn+ Europe $0.7bn $1bn+ Healthcare $0.6bn $1bn+ Financials $0.7bn $2bn+ Convertibles $0.1bn $1bn+ Emerging Markets $0.6bn $2bn+ North America $0.6bn $3bn+ European Market Neutral <$0.1bn $1bn+
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 maintain a robust operational infrastructure • To maintain high levels of client servic
Slide 16: Financial Review Highlights
Financial Review Highlights • AUM – AUM at 31 March 2013 increased 41% to US$7.20bn from US$5.08bn at March 2012 • Profitability – Pre-tax (pre SBP) profits up 59% to £15.3m (2012: £9.6m) – Core operating profit excluding performance fees £10.0m (2012: £7.1m) • EPS and Dividend – Adjusted diluted EP
Slide 17: Profitability – by year
Financial Review Profitability – by year Year Year Year to March 11 to March 12 to March 13 Average AUM US$3.1bn US$4.3bn US$5.7bn Core operating profit £3.6m £7.1m £10.0m Performance fee profit £5.7m £4.1m £5.5m Interest and similar income £0.9m £0.1m £1.3m PBT pre S.B.P. & Pre Goodwill £10.2m £11.
Slide 18: Margin analysis – 6 month periods
Financial Review Margin analysis – 6 month periods 6 months 6 months 6 months to March 12 to September 12 to March 13 Average AUM US$4.4bn US$5.2bn US$6.2bn Change (relative) +18% +19% Core operating profit £3.6m £4.2m £5.8m Change (relative) +17% +38% Core operating margin 25% 26% 30% Change (absol
Slide 19: Costs
Financial Review Costs Year Year Year to March 11 to March 12 to March 13 Comments Salaries and bonuses £8.9m £11.0m £13.5m Increase in staff numbers Core distributions £3.5m £3.3m £4.8m Increase in core profits Core compensation costs £12.4m £14.3m £18.3m Other operating costs £6.1m £6.9m £7.0m See
Slide 20: Other operating costs
Financial Review Other operating costs Year Year Year to March 11 to March 12 to March 13 Comments IT £2.0m £2.1m £2.5m Increased product Rent and rates £1.1m £1.2m £1.2m Professional fees £0.7m £0.9m £0.7m Insurance £0.4m £0.4m £0.4m Travel and entertainment £0.7m £0.8m £0.9m Other £1.2m £1.5m £1.3
Slide 21: Dividend
Financial Review Dividend • Total dividend for the year 13.0p (2012: 9.0p) – Implies second dividend payable 11.0p (2012: 7.5p) • Dividend reflects: – Improved profitability of the company – Health and strength of the company’s balance sheet – Quiet optimism regarding the company’s prospects • Polic
Slide 22: Cash and investments
Financial Review Cash and investments March 2012 March 2013 £m £m Cash £22.6m £30.9m Available for sale investments Hedge fund investments £ 1.1m - Hedge fund seed £15.2m £16.4m Long only seed £ 9.1m £ 14.8m £25.4m £31.2m Long only protection and cash collateral £ 1.0m - £26.4m £31.2m Total cash and
Slide 23: Shareholder analysis at March 2013
Financial Review Shareholder analysis at 31 March 2013 Holding Percentage Directors, founders and staff 28.5m 35% Caledonia 8.0m 10% XL 8.0m 10% EBT 1.7m 2% Blackrock 8.0m 10% Artemis 4.7m 6% Free Float = 43% Liontrust 2.9m 4% AXA Framlington 2.3m 3% Others 18.4m 20% Total shares in issue 82.5m 100%
Slide 24: Summary: Well positioned in challenging times
Summary Well positioned in challenging times 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$20 billion of which at the end of M
Slide 25: Important Information
Important Information Polar Capital 4 Matthew Parker Street London SW1H 9NP 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
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