Polar Capital Holdings Plc · LSE:POLR
Polar Capital — FY2007 Earnings Presentation
21 slides from Polar Capital's earnings presentation, June 2007
Slide 1: Polar Capital Holdings Plc Results Presentation June 2007
POLAR CAPITAL HOLDINGS PLC Results Presentation June 2007
Slide 2: Contents
Contents • Overview of Polar Capital • Asset flows and Performance • Summary of Financial Information • Strategy for Growth • Appendix 1 POLAR CAPITAL HOLDINGS PLC
Slide 3: Introduction
Introduction Mark Kary – Chief Executive Mark joined Polar Capital in April 2005 as Chief Executive Officer. He began his career in finance at Chemical Bank in 1982 before joining Morgan Stanley’s UHNW Private Wealth Management Group in 1986 where he advised UK and European family offices, charities
Slide 4: Overview of Polar Capital
Overview of Polar Capital • Founded in December 2000 • Specialist asset management group, building a broad family of funds diversified by asset Polar Capital class, geography and sector specialisation and structure • Backed by Caledonia Investments and XL Capital • Aim to combine the best of the ins
Slide 5: Overview of Polar Capital
Overview of Polar Capital AuM split by strategy (15 June 2007) AuM split by business unit (15 June 2007) Utilities 1% Macro Managed and Advisory 1% Emerging Markets Investment Trust 8% 10% 18% Technology 28% Long Only Global Opportunities 20% 14% European 13% UK Japan 3% 30% Hedge Funds 54% 4 POLAR
Slide 6: Growth in assets under management
Growth in assets under management 4000 $3,803 $3,406 7% 3500 of 2 GR CA 3000 $2,458 2500 $2,269 $2,037 $ millions 2000 1500 $922 1000 $811 500 0 31 Mar 02 31 Mar 03 31 Mar 04 31 Mar 05 31 Mar 06 31 Mar 07 31 May 07 Technology Japan UK Europe Development Funds Advisory 5 POLAR CAPITAL HOLDINGS PLC
Slide 7: Gross inflows and outflows
Gross inflows and outflows Analysis by generation of assets Long Hedge Managed & Total Advisory Brought forward 31.3.2006 $1,470 $685 $303 $2,458 Performance and Currency Movements $50 $207 ($37) $220 Net subscriptions redemptions $43 $661 $25 $729 Total AUM at 31.03.2007 $1,563 $1,553 $291 $3,407 A
Slide 8: Investment performance
Investment performance 2006 Calendar 2007 Year to Date Launch Fund Size Potential ($ millions) Capacity Return Index Volatility Return Index Volatility Target PCT Oct 2001 692 700 -1.5% -3.4 14.8% 4.5% 7.1% 12.5% Tech UCITS Oct 2001 131 400 11.6% 13.3% 18.4% 6.1% 10.7% 14.6% Long Only Japan UCITS Oc
Slide 9: Revenues
Revenues Year to 31 March 2006 2007 £’000 £’000 • 2006 – 2007 management fee Hedge funds 5,154 9,505 revenues: 84% increase in Gross Management Long only 9,033 10,358 hedge funds and 14% Fees Managed accounts & increase in long only. 978 811 Advisory fees Distribution (1,766) (2,160) cost • Increase
Slide 10: Summary financial information
Summary financial information Year to 31 March • Reminder of existence and effect of Minority Interest. Financial Year 2006 2007 £'000 £’000 AuM at period end ($m) 2,458 3,406 • Pre tax core profitability up 42%. Net Core Revenues 13,398 18,514 Salary costs and other staff benefits (4,181) (5,932) B
Slide 11: Earnings
Earnings • PBT of £11.7m above market Year Ending 31 March expectations of April 2007 (£11.45m). 2006 2007 £’000 £’000 • Tax charge distorted by IPO non Profit before tax 11,700 10,687 deductibility and EMI options Taxation (3,977) (2,537) deductibility. Profit after tax 7,723 8,150 Dividends • PAT
Slide 12: Balance Sheet
Balance Sheet As at As at 31 March 2006 31 March 2007 £’000 £’000 Fixed assets Tangible assets 595 537 Investments 1,001 3,709 1,596 4,246 Current assets Debtors 4,780 4,230 Cash and short-term deposits 19,403 31,403 24,183 35,633 Total assets 25,779 39,879 Creditors – amounts falling due within one
Slide 13: Cash Flow Statement
Cash Flow Statement Year Ended Year Ended 31 March 2006 31 March 2007 £’000 £’000 Operating activities Operating profit for the year 26,547 25,224 Depreciation charge 160 228 (Increase)/decrease in trade and other receivables (2,524) 554 Increase/(decrease) in trade and other payables (174) (160) Sh
Slide 14: Cash and Dividend
Cash and Dividend • The group has £31m of cash and £4m of investments on its balance sheet • Commitment at the IPO relating to the dividend policy; to distribute “ …….a material proportion of net profits before performance fees together with the majority of net performance fees” Post tax core profit
Slide 15: Growth strategy
Growth strategy Achievements against strategy • XL seeding agreement of $175mm to enhance capacity to launch new funds. • Successful IPO in February 2007 to provide visibility to value of shares, enhance profile and attract investment teams. Three cornerstones to the growth strategy • Investment per
Slide 16: Appendix
Appendix 15 POLAR CAPITAL HOLDINGS PLC
Slide 17: Overview of Polar Capital
Overview of Polar Capital Polar Capital Total Assets Under Management $3.8bn As at 15th June 2007 MANAGEMENT PLATFORM STRUCTURE Ben Rogoff 4 funds Technology Craig Mercer US$1.063bn Charles Hale Non-Executive Chairman Sales & Marketing James Salter 3 funds Japan Celia Farnon US$1.106bn Mark Kary Ris
Slide 18: Polar Capital's Positioning in the Industry
Polar Capital's Positioning in the Industry • Growing polarisation between alpha and beta strategies • Trend to seek smarter risk return strategies around a lower tracking error core portfolio → Growth in innovative, niche and alternative investment products. Polar positioned in this space. Market G
Slide 19: Business unit ownership structure
Business unit ownership structure • Business unit structure designed to provide entrepreneurial environment for fund managers whilst aligning interests of all Polar Capital’s stakeholders. • Fund management teams organised in separate business units with access to central platform for Sales and Mark
Slide 20: Illustration of crystallisation calculation
Illustration of crystallisation calculation • Percentage of new equity issued = [ A * B * 0.66 / C ] * D (please see below for details) • The following table illustrates how the calculation is performed and its impact on the number of shares in issue and Group earnings Year 1 Year 2 Year 3 Year 4 £m
Slide 21: Disclaimer
Disclaimer IMPORTANT INFORMATION This document does not constitute an offer to sell or an invitation to buy shares in Polar Capital Holdings plc or any other invitation or inducement to engage in investment activities. Certain statements, beliefs and opinions in this document are forward-looking, wh
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