RM Infrastructure Income PLC GBP · LSE:RMII
RM Infrastructure Income PLC GBP — RM Funds — Investor Presentation (November 2024)
30 slides from RM Infrastructure Income PLC GBP's investor presentation, November 2024
Slide 1: SVS RM Defensive Capital Fund
SVS RM Defensive Capital Fund SVS RM Defensive Capital Fund Q4 2024 Institutional Investors Only
Slide 2: Disclaimer
Disclaimer Disclaimer All information and opinions contained in this document has been provided by RM Capital Markets Limited ("Company"), which is authorised and regulated by the Financial Conduct Authority, and have not been independently verified as to their accuracy by either the Company or any
Slide 3: In This Presentation
In This Presentation About RM Funds 5 About RM Funds 6 Senior Leadership & Investment Team DCF Overview 8 Fund Objectives 9 How Can DCF Be Utilised? 10 Strategy Performance Fund Investments and Allocation 12 Capital Preservation & Income 13 Capital Growth 14 Diversifiers 15 Dynamic portfolio constru
Slide 4: About RM Funds
SVS RM Defensive Capital Fund About RM Funds ▪ About RM Funds ▪ Firm Senior Leadership ▪ Investment Team 4
Slide 5: About RM Funds
About RM Funds RM Funds is a specialist in alternative investment management ▪ RM currently manages public and private market strategies, including: – Listed Real Assets Strategy: VT RM Alternative Income Fund (“RMAI”) – Infrastructure Debt Strategy: SVS RM Infrastructure Bond Fund (“IBF”) – All-Wea
Slide 6: RM Funds – Leadership
RM Funds – Leadership Fund Management Leadership Dr Niall O’Connor Investment Team Experience Lead Fund Manager ▪ Investment Team focused on Liquid and Illiquid alternative securities/assets ▪ Lead Fund Manager for DCF strategy at Brooks Macdonald since ▪ 360-degree perspective - from lead advisory,
Slide 7: Fund Overview
SVS RM Defensive Capital Fund Fund Overview 7
Slide 8: SVS RM Defensive Capital Fund Objectives
SVS RM Defensive Capital Fund Objectives The Defensive Capital Fund strategy was launched in 2010 and was ▪ All-Weather Diversified Assets acquired by RM Funds in 2024. Fund ▪ Low-Cost Investment Objectives Management Fee: Fund Information 0.55% ▪ Preserve capital ▪ Daily Dealing ▪ Positive absolute
Slide 9: How Can DCF Be Utilised?
How Can DCF Be Utilised? ▪ As a defensive building block and all-weather strategy, given the fund’s lower volatility profile and explicit focus on minimising downside risk. ▪ Well-suited to Defensive/Cautious/Balanced portfolios, and as an alternative to fixed income. ▪ To provide exposure to assets
Slide 10: Strategy Performance
Strategy Performance Defensive Capital Fund Strategy vs Asset Classes Defensive Capital Fund Strategy vs Peer Group 280 220 260 200 240 220 180 200 160 180 160 140 140 120 120 100 100 80 80 SVS Brooks MacDonald Defensive Capital Fund Class C Acc Iboxx Sterling Non-Gilts Overall Total Return Index SV
Slide 11: What assets does the fund invest in?
SVS RM Defensive Capital Fund What assets does the SVS RM Defensive Capital Fund invest in? ▪ Capital Preservation & Income: Convertible Bonds, Preference Shares, Corporate Credit ▪ Capital Growth: Speciality Equity, Discounted Growth Assets, Convertible Bonds ▪ Diversifiers: Commodities, Structured
Slide 12: Capital Preservation & Income
Capital Preservation & Income Assets which are the “backbone” of the fund. Typically, defined Example Investment Themes return investments that provide downside protection and income ▪ Pharmaceuticals & Healthcare returns. Mostly shorter-duration in profile. Innovation: Defensive non-cyclical sector
Slide 13: Capital Growth
Capital Growth Under-explored, under-researched and undervalued assets with Example Investment Themes potential for capital appreciation. ▪ Private Markets: Unlocking Value, beyond traditional public equity (and Investments within this segment will contribute towards the capital growth objective for
Slide 14: Diversifiers
Diversifiers Lower correlation investments which still have potential for Example Investment Themes capital appreciation. Asset prices are driven more by idiosyncratic ▪ Global Macro: Inflation Concerns. characteristics than equity or bond market movements. ▪ Govt Policy: Protectionism, Tariffs, Inv
Slide 15: Dynamic portfolio construction across the three segments
Dynamic portfolio construction across the three segments ▪ The fund is monitored across numerous “factor” exposures (growth vs value, duration etc)… ▪ …so can be tilted to match the prevailing macroeconomic backdrop. Date December 2019 April 2020 February 2021 December 2021 December 2023 September 2
Slide 16: Contribution by Asset Class
Contribution by Asset Class Different asset classes perform well in diverse periods and market conditions. Diversification is provided by the portfolio’s asset mix, contributing towards low volatility and consistent return profile. Asset class 2016 2017 2018 2019 2020 2021 2022 2023 YTD Autocalls 2.
Slide 17: Macro outlook
SVS RM Defensive Capital Fund ▪ Macroeconomic Conditions ▪ Portfolio Allocations ▪ Contribution & Fund Performance ▪ Outlook 17
Slide 18: Macro-economic Conditions
Macro-economic Conditions UK GILTS & US Treasury Yield Curves (%) GDP forecasts 5.80% 5.0 Macro vs Fundamentals 5.60% Sovereign curves 10-110bps 4.5 ▪ Rate cuts still coming, but priced in. 5.40% shift 4.0 5.20% 3.5 ▪ Economic growth, although moderating, 5.00% 3.0 remains solid. 4.80% 2.5 ▪ Many va
Slide 19: Current Portfolio Allocation
Current Portfolio Allocation 1 Largest allocation is towards Capital Allocation Split Preservation and Income investments, given the uncertain macroeconomic backdrop Cash – locking in defined returns and maintaining 2% the fund’s low volatility profile. Historically Diversifiers 14% high equity valu
Slide 20: Performance Contribution: Last 12 Months Cumulative
Performance Contribution: Last 12 Months Cumulative Fund Capital Preservation & Income 12% 12% Performance 10% 10% ▪ YTD Total Return of 6.3%. 8% 8% ▪ Capital Preservation and Income the biggest contributor, but Capital Growth and Diversifiers 6% 6% segments have also delivered positive returns. 4%
Slide 21: Market and Portfolio Outlook
Market and Portfolio Outlook ▪ Q4 2024 Outlook ▪ #1 Monetary Policy & Inflation: CPI softening, unemployment rising, but conflicting with claims, consumer spending and wages > creates a mixed backdrop, but central bankers turning dovish. Narrative remains balanced whilst indicators remain mixed. ▪ #
Slide 22: Appendix
SVS RM Defensive Capital Fund Appendix ▪ Investment Process ▪ Summary ▪ Contact Information 22
Slide 23: Summary Investment Process
Summary Investment Process Rigorous investment process, with a focus on macro- driven asset allocation, and fundamental-driven Macro securities selection. Analysis Inflation / Rates / Policy Portfolio Construction Considerations: • Rate cycle, inflation, valuations ESG Factor • Single stock analysis
Slide 24: Macro Analysis & Review
Macro Analysis & Review Investment Team Time: up to 10% Key Metrics: ▪ GDP ▪ Payrolls ▪ Housing Sales/Starts etc ▪ PMIs ▪ Interest Rate Expectations ▪ Inflation Expectations ▪ Cyclical macro factors Why? ▪ Macro-economic information is an important consideration when considering domestic (fund base
Slide 25: ESG Review
ESG Review Investment Team Time: c.5% Key Metrics: ▪ C.100 metrics ▪ UN Sustainable Development Goals ▪ Specific areas include: suitability management, environmental impact, labour practices, health and safety, diversity and inclusion, supply chain management, leadership and governance and business
Slide 26: Fundamental Analysis
Fundamental Analysis Investment Team Time: Up to c.50% Management Experience, Alignment, Three Key Factors: Transparency ▪ Management: Board, Governance, Transparency and Alignment ▪ Financial Statements: Cash Generation, Revenue Recognition, etc ▪ Assets: Counterparties, Valuation Policy, Capital S
Slide 27: Liquidity, Technical Factors & Portfolio Construction
Liquidity, Technical Factors & Portfolio Construction Investment Team Time: c.5-10% Key Priorities ▪ Liquidity Tree and Ladder ▪ Portfolio and stock metrics (volatility, correlation, beta et al) ▪ Position sizing/weighting Why? ▪ A key focus is ensuring we only invest in liquid public securities, wi
Slide 28: Post-Investment Monitoring
Post-Investment Monitoring Investment Team Time: 20-50% Key Metrics: ▪ Various metrics, driven by sector specific considerations, for example: Renewables: power prices, resource generation, discount rates, OpEx costs, tax, asset life. For Real Estate: psf price, rent free periods, occupancy rates, c
Slide 29: Contact Information
Contact Information Investment Management Distribution Dr Niall O’Connor: 0203 540 4618 / niall.oconnor@rm-funds.co.uk James Satterthwaite: +44 7905 270487 / james.satterthwaite@rm-funds.co.uk David Watts: +44 7402 810068 / david.watts@rm-funds.co.uk Head Office: 4th Floor, 7 Castle Street, Edinburg
Slide 30: Registered in Scotland No SC380707
Registered in Scotland No SC380707 Registered Office: 4th Floor, 7 Castle Street, Edinburgh, EH2 3AH RM Capital Markets Limited is authorised and regulated by the Financial Conduct Authority (Number 562209) 30