Gresham House Energy Storage Fund Plc GBP · LSE:GRID
Gresham House Energy Storage Fund Plc GBP — Gresham House — FY2019 Earnings Presentation
47 slides from Gresham House Energy Storage Fund Plc GBP's earnings presentation, 2020
Slide 1: Specialists in sustainable alternatives
Specialists in sustainable alternatives Gresham House plc Annual Results Presentation 31 December 2019
Slide 2: Disclaimer
DISCLAIMER This presentation (the Presentation) is issued on a confidential basis by Gresham Past performance is not indicative of future results. The value of investments may fall House plc (Gresham House) for information purposes only. This Presentation, its as well as rise and investors may not g
Slide 3: Presentation Team
PRESENTATION TEAM Tony Dalwood Kevin Acton Chief Executive Officer Chief Financial Officer ▪ Leads the Group and is Chairman of the ▪ Oversees the Group finance function Investment Committee, overseeing balance for Gresham House plc, including sheet capital allocation divisional entities ▪ Backgroun
Slide 4: Contents
CONTENTS SUMMARY 5 INTRODUCTION 6 CREATING SHAREHOLDER VALUE 10 ASSET ALLOCATION TO ALTERNATIVES 11 SUSTAINABLE INVESTING 12 2019 ANNUAL RESULTS 14 STRATEGIC PRIORITIES 20 CONCLUSION 24 APPENDIX 25
Slide 5: Gresham House 2019 Summary
GRESHAM HOUSE 2019 SUMMARY AUM → Successfully integrated the FIM and Livingbridge VC £2,797m £m as at 31 December +23% businesses, capturing annualised synergies of £1.0m → Executed the Group’s first international forestry acquisition in Ireland on behalf of AXA Investment Core income Managers - Rea
Slide 6: An Introduction
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Slide 7: Specialists in Alternatives
SPECIALISTS IN ALTERNATIVES Gresham House is a London Stock Exchange-quoted specialist alternative asset management group (GHE.LN), providing funds, direct investments and tailored investment solutions, including co-investment. → Specialists in five areas of alternative investment → Growing organica
Slide 8: Real Assets
REAL ASSETS Protection from inflation through proven, sustainable, asset-backed investments. Division AUM Forestry £1,334m AUM A real asset class that both diversifies an investment portfolio and provides exposure to timber and underlying land value growth £2,089m Housing & Infrastructure £220m AUM
Slide 9: Strategic Equity
STRATEGIC EQUITY Targeting superior long-term returns in a range of public and private equity investments. Division AUM Public Equity £283m AUM Applies a private equity approach to quoted equity. £708m Private Equity £425m AUM +20% Offers access to entrepreneurial, high growth, earlier stage and low
Slide 10: Creating Shareholder Value
CREATING SHAREHOLDER VALUE 2020 will see Gresham House continue to develop through acquisition and organic growth. Successful delivery of our business model creates long-term sustainable management fees and carried interest, creating value for clients and shareholders. Partnership with clients Deep
Slide 11: Asset Allocation to Alternatives
ASSET ALLOCATION TO ALTERNATIVES The trend continues. Whether pension funds, institutional investors or family offices, increasing exposure to alternatives continues apace. Average annual growth rate (%) All alternative investments Hedge funds Private equity Private debt Property Infrastructure Natu
Slide 12: Sustainable Investing
SUSTAINABLE INVESTING We define sustainable investment as “Investment that proactively manages a full range of risks and seeks to make a positive social, economic or environmental impact whilst delivering strong financial returns.” → As a signatory to the UN-supported Principles for Responsible Inve
Slide 13: Sustainable Investing
SUSTAINABLE INVESTING Sustainable Investment Framework SUSTAINABILITY AGENDA Forestry division planted over 4.1m trees in UKWAS-certified forests in 2019. In the year, approximately 1.5m tonnes of CO2 were captured, bringing total carbon storage across the portfolio to over 34m tonnes Our New Energy
Slide 14: 2019 Annual Results
2019 ANNUAL RESULTS . f by
Slide 15: Financial Highlights
FINANCIAL HIGHLIGHTS → Organic growth in AUM of 23% (£529m) 2,797 2,268 AUM £2,797m £m as at 31 December including contributions from all Group +23% divisions 649 2019 2018 2017 → First full year impact of FIM and Livingbridge VC acquisitions 32.9 Core income → Revenue more than doubled to £32.9m £3
Slide 16: Operational Highlights
OPERATIONAL HIGHLIGHTS → Successfully integrated the FIM and Livingbridge VC We have grown the business businesses in the year, capturing annualised organically in 2019, demonstrating synergies of over £1.0m our ability to integrate acquisitions, alongside driving the sustainability → Executed the G
Slide 17: Income Statement
INCOME STATEMENT A year of integration and organic growth. ▪ Organic AUM growth of £0.5bn (23%) to 2.8bn (2018: £2.3bn) Income Statement 2019 2018 ▪ 124% revenue growth to £32.9m (2018: £14.7m) for the year to 31 December £m £m Income 31.6 14.5 ▪ Long-term revenue streams - weighted average length o
Slide 18: Balance Sheet
BALANCE SHEET A strong balance sheet. ▪ Tangible / realisable assets comprise cash Balance Sheet 2019 2018 and investments totalling £41.3m (2018: as at 31 December £m £m £32.8m) Assets Investments1 21.9 17.8 ▪ Cash of £19.4m (2018: £14.0m) Deferred receivables - 1.0 ▪ Zero debt - £10.0m Santander f
Slide 19: Investment Portfolio
INVESTMENT PORTFOLIO Strategic investment to align with clients and grow the business. ▪ GHS: 23% holding Investment Portfolio 2019 2018 £m £m ▪ Noriker: 28% holding and has paid dividend Investment in associates of £1.1m in year Gresham House Strategic plc (GHS) 8.8 8.9 ▪ GRID: 2.5% holding Noriker
Slide 20: Strategic Priorities
STRATEGIC PRIORITIES
Slide 21: 2020 Priorities
2020 PRIORITIES 1 Deliver organic growth 2 Deliver acquisition growth 3 Deliver operating profitability 4 Deliver operational efficiencies 21
Slide 22: Gresham House 5 Year Plan - GH25
GRESHAM HOUSE 5 YEAR PLAN - GH25 Financial targets Strategic targets → Double shareholder value → Leaders in ESG and sustainable investing → AUM £6bn+ → Majority investment products → EBITDA margins 40%+ outperforming → ROCE 15%+ → Significant market share in specialist products → Build on internati
Slide 23: Acquisition Update
ACQUISITION UPDATE TradeRisks Limited Pleased to announce the acquisition of TradeRisks Limited, a fund management business and specialist provider of debt structuring and advisory services to the housing and social infrastructure sectors. The transaction ▪ Initial consideration of £7.0m (£3.5m in c
Slide 24: Conclusion
CONCLUSION → Strong year of organic growth - adding £0.5bn to AUM → Successful focus on integration of 2018 acquisitions → Margin improvement alongside investment in people and platform → Proposed dividend increase to 4.5p → Growth plans across existing platforms → TradeRisks acquisition in social h
Slide 25: Appendix
APPENDIX
Slide 26: Our Purpose
OUR PURPOSE We are creating an “asset to covet”, for our shareholders, clients and employees, by delivering value through financial and non-financial returns alongside high-quality service. Our commitment to integrating sustainable investment practices across our strategies makes an active contribut
Slide 27: Management Committee
MANAGEMENT COMMITTEE Tony Dalwood Kevin Acton Chief Executive Chief Financial Officer Tony is an experienced public and private equity investor and Kevin has over 17 years’ finance and operational experience in adviser. He established SVG Investment Managers (part of SVG private equity and asset man
Slide 28: Investment Committee
INVESTMENT COMMITTEE Tony Dalwood Bruce Carnegie-Brown Investment Committee Chairman Bruce is Chairman of Moneysupermarket.com Group plc Tony is an experienced investor and adviser to public and and the world’s leading insurance market, Lloyd’s of private equity businesses. Tony established SVG Lond
Slide 29: Non-Executive Board
NON-EXECUTIVE BOARD Anthony Townsend Richard Chadwick Non-Executive Director (Chairman) Non-Executive Director Anthony has spent over 40 years in the City and was chairman of the Richard is a chartered accountant who was appointed to the Association of Investment Companies (2001-2003). He is Chairma
Slide 30: Share Price
SHARE PRICE 720 2019 Results AUM £2.8bn 670 TradeRisks acquisition 620 Berkshire Pension Fund takes 20% stake at a premium and 2017 Results 2018 Results British Strategic Investment AUM £649m AUM £2.3bn Run-rate profitable Maiden dividend announced Fund (BSIF) announced 570 AUM £1.6bn 627.5p Propose
Slide 31: Investment Capabilities
INVESTMENT CAPABILITIES Capability Structure Target IRR / Total Return Target income Distribution cycle Inflation linkage Contractual cash flows Investment term Real Assets Housing & Infrastructure (BSIF) LP 8-10% Total Return 5.0-6.0% Quarterly2 ✔ - 12 years Forestry LP 7.0% IRR 2.1%1 Annually ✔ 10
Slide 32: Real Assets
REAL ASSETS Our Real Assets strategy invests in tangible assets, seeking to provide clients with sustainable yield and long term capital growth.
Slide 33: Housing & Infrastructure
HOUSING & INFRASTRUCTURE Key characteristics Investment team ▪ Our strategy targets an 8-10% annual net return including ▪ Executive investment team of six, led by Ben Guest, an income yield of 5-6% p.a.1 leveraging additional resource from the New Energy team ▪ Focus on sub-£50m investments where t
Slide 34: Forestry
FORESTRY Key characteristics Investment team ▪ UK’s leading commercial forestry investment manager with ▪ Nearly 80 years’ combined experience c.135,0001 hectares of managed forests ▪ Oversight and making capital allocation decisions ▪ Target IRR of 7% p.a. and income of 2% p.a. ▪ International Fore
Slide 35: New Energy
NEW ENERGY Key characteristics Investment team ▪ Asset-backed and income-generating investments that ▪ Team with proven capability in originating, acquiring, are becoming (or are already) mainstream constructing and managing the operation of UK renewable energy infrastructure assets ▪ Solar is the c
Slide 36: Energy Storage
ENERGY STORAGE Key characteristics Investment team ▪ Compelling opportunity in fast-growing sector, enhanced ▪ Proven capability in the sector, having developed six by renewables penetration rising faster than forecasted ESS to date3 ▪ Gresham House Energy Storage Fund plc (GRID) gives ▪ Strategic p
Slide 37: Onshore Wind
ONSHORE WIND Key characteristics Investment team ▪ Sustainable real asset with an attractive return and low ▪ Over 100 years’ combined experience, with oversight financial risk. and capital allocation decision-making ▪ Exposure to UK operational onshore wind assets with – Wayne Cranstone, Investment
Slide 38: Solar
SOLAR Key characteristics Investment team ▪ Low risk, asset-backed investment providing robust ▪ Over 80 years’ combined experience, with oversight revenues with a high degree of inflation protection and capital allocation decision-making ▪ Our funds provide exposure to operational solar PV – Wayne
Slide 39: Strategic Equity
STRATEGIC EQUITY An investment philosophy applying a private equity approach to investing in both public and private companies.
Slide 40: Strategic Public Equity
STRATEGIC PUBLIC EQUITY Key characteristics Investment Committee ▪ Applies private equity techniques to investing in mainly ▪ Tony Dalwood, Chairman (CEO, Gresham House) UK public companies, typically below £150m in size ▪ Graham Bird (prev. J.P. Morgan Cazenove, Paypoint) ▪ Highly engaged strategy,
Slide 41: LF Gresham House UK Micro Cap Fund
LF GRESHAM HOUSE UK MICRO CAP FUND Key characteristics Investment team ▪ Daily dealing FCA regulated OEIC ▪ Ken Wotton, Managing Director, Quoted Investments ▪ Internally seeded (2009), grown to £238.2m NAV1 ▪ Brendan Gulston, Investment Director ▪ Focused on UK micro-cap investments (<£250m) ▪ Davi
Slide 42: LF Gresham House UK Multi Cap Income Fund
LF GRESHAM HOUSE UK MULTI CAP INCOME FUND Key characteristics Investment team ▪ Launched in June 2017, grown to £48.3m NAV1 ▪ Ken Wotton, Managing Director, Quoted Investments ▪ Focus on profitable, cash generative growth ▪ Brendan Gulston, Investment Director businesses, with attractive dividends ▪
Slide 43: Private Equity - Baronsmead VCTs
PRIVATE EQUITY - BARONSMEAD VCTS Key characteristics Senior Investment Team ▪ Two Baronsmead VCTs joined Gresham House as part ▪ Bevan Duncan, Managing Director, Strategic Equity of the acquisition of Livingbridge VC ▪ Steve Cordiner, Head of Unquoted Investments ▪ Baronsmead Venture Trust plc and B
Slide 44: Our Client Portal
OUR CLIENT PORTAL We believe our approach to asset management is differentiated by looking at new ways to adapt and share what we do with investors. This is evidenced, in part, through our investment into digital services. We understand that key investor objectives in addition to financial returns a
Slide 45: Recognition
RECOGNITION Winners ✓ Portfolio Adviser Fund Awards - Best Fund in the IA UK Smaller Companies sector 2020 2 ✓ Royal Highland Show Awards - Best New Commercial Woodland 2019 ✓ Funds Europe Awards - European Alternative Investment Manager of the Year 2019 ✓ Grant Thornton Quoted Company Awards - Fund
Slide 46: Gresham House Advisory Group
GRESHAM HOUSE ADVISORY GROUP Sir Roy Gardner Sir Laurie Magnus Sir Roy is Chairman of Serco plc and Senior Independent Sir Laurie is a Senior Advisor to Evercore Europe investment Director of Mainstream Renewable Power Ltd. Previously, he banking. Sir Laurie was previously Chairman of Lexicon was Ch
Slide 47: Gresham House plc Shareholders
GRESHAM HOUSE PLC SHAREHOLDERS Board / Management / Directors / Investment Committee & Advisory Group members c.8% 1 The Royal County of Berkshire Pension Fund 15.9 Liontrust Asset Management 9.0 Majedie Asset Management 5.8 Mr Richard C Dawson 5.3 Aberdeen Standard Investments 4.9 Schroder Investme