Gresham House Energy Storage Fund Plc GBP · LSE:GRID
Gresham House Energy Storage Fund Plc GBP — Gresham House — FY2020 Earnings Presentation
48 slides from Gresham House Energy Storage Fund Plc GBP's earnings presentation, February 2021
Slide 1: Specialists in sustainable alternatives
Specialists in sustainable alternatives Gresham House plc Annual Results Presentation 31 December 2020
Slide 2: Disclaimer
DISCLAIMER This presentation (the Presentation) is issued on a confidential basis by Gresham House for No representation is being made that any investment will or is likely to achieve profits or losses similar information purposes only. This Presentation, its contents and any information provided or
Slide 3: Presentation Team
PRESENTATION TEAM Tony Dalwood Kevin Acton Chief Executive Officer Chief Financial Officer ▪ Leads the Group and is Chairman of the Investment ▪ Oversees the Group finance function for Gresham Committee, overseeing balance sheet capital allocation House plc, including divisional entities ▪ Backgroun
Slide 4: 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 5: Contents
CONTENTS 2020 ANNUAL RESULTS 6 GRESHAM HOUSE TODAY 13 STRATEGIC PRIORITIES 17 2021 PRIORITIES & CONCLUSION 23 APPENDIX 26 5
Slide 6: 2020 Annual Results
2020 ANNUAL RESULTS
Slide 7: Full Year Results Highlights
FULL YEAR RESULTS HIGHLIGHTS £bn 4.0 AUM 2.8 £bn as at 31 December 2020 £4.0bn +42% → AUM growth of £1.2bn an increase of 42% 2020 2019 £m → Organic AUM growth of £1.0bn an increase of 35% Net core income 40.8 £m for the year to 31 December → Net core income increased by 29% 31.7 £40.8m +29% → Inves
Slide 8: 2020 AUM Update
2020 AUM UPDATE as at 31 December 2020 AUM Net Fund Funds AUM £ millions Performance Total Growth Dec-19 Flows1 Acquired/Won2 Dec-20 Public Equity 283 35 42 148 508 80% Strategic Equity Private Equity 425 37 5 (55) 412 (3)% Subtotal 708 72 47 93 920 30% Forestry 1,333 85 393 - 1,811 36% New Energy &
Slide 9: 2020 AUM Update
2020 AUM UPDATE AUM progression for the year to 31 December 2020 Strategic Equity ▪ AUM growth of £212m (+30%) ▪ Robust net fund inflows of £72m from open ended funds and Baronsmead VCTs ▪ Portfolio value increased by £47m despite COVID-19 impact ▪ SEC mandate adds £148m to AUM Real Assets ▪ AUM gro
Slide 10: Income Statement
INCOME STATEMENT Resilience growth in a challenging environment Income Statement 2020 2019 for the 12 months to 31 December £m £m ▪ Net core income +29% Net core income 40.8 31.7 Administrative overheads (28.7) (21.0) ▪ Long-term revenue streams - weighted average length of (excl. Amortisation, Depr
Slide 11: Balance Sheet
BALANCE SHEET A strong balance sheet Balance Sheet as at Dec 2020 Dec 2019 ▪ Tangible / realisable assets comprise cash and £m £m investments totalling £45.1m (2019: £41.3m) Assets Investments1 23.2 21.9 ▪ Cash of £21.9m (2019: £19.4m) Deferred receivables - - ‒ Zero debt Cash 21.9 19.4 Tangible / r
Slide 12: Investments Aligned with Clients
INVESTMENTS ALIGNED WITH CLIENTS Strategic investment to align with clients and grow the business 2020 2019 Investment Portfolio £m £m ▪ GHS: 23% holding (20% ROIC) Investment in associates ▪ GRID: 0.7% holding (11% ROIC) Gresham House Strategic plc (GHS) 8.4 8.8 ▪ DevCo Projects are battery storage
Slide 13: Gresham House Today
GRESHAM HOUSE TODAY
Slide 14: Supported by Strong Market Trends
SUPPORTED BY STRONG MARKET TRENDS ESG considerations 2019 2020 Change ▪ Interest in and active involvement with Sustainable Investment set to Investors considering ESG 55% 89% increase further Investors complying with regulation 56% 84% ▪ Gresham House well positioned at Plans integrating ESG into i
Slide 15: Creating Shareholder Value
CREATING SHAREHOLDER VALUE Continuing 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 understanding of our client
Slide 16: Adding Value Through Acquisitions
ADDING VALUE THROUGH ACQUISITIONS ▪ Achieving ROIC of 15% or greater in the medium term ▪ Delivering enhanced AUM growth as part of the Gresham House platform Date of AUM at AUM AUM Acquisition ROIC acquisition acquisition Dec 2020 growth Aitchesse Limited (Forestry) Nov 2015 £192m £583m £391m 17% H
Slide 17: Strategic Priorities
STRATEGIC PRIORITIES
Slide 18: 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 outperforming → EBITDA margins 40%+ → Significant market share in specialist products → ROCE 15%+ → Build on internati
Slide 19: Sustainable Investing
SUSTAINABLE INVESTING Significant progress made in objective of being a market leader in Sustainable Investment in 2025 2018 2020 Became a PRI signatory Jan July November – Included SI-related objectives – Awarded top ratings from the PRI – Submitted our Stewardship in all staff annual appraisals Co
Slide 20: 2020 Investment Performance
2020 INVESTMENT PERFORMANCE Forestry as an asset class continues to show very strong performance, with forestry funds generating an average return of 15% in the last 12 months Gresham House Energy Storage Fund plc: the portfolio now includes 13 operational sites across the UK with a total capacity o
Slide 21: Strong Market Positions
STRONG MARKET POSITIONS UK’s No.1 commercial forestry manager UK’s largest operational, utility-scale battery storage fund Acquired the UK’s first subsidy free wind farm, a significant milestone in the energy transition to help reduce emissions Brought 171 new shared ownership properties into the af
Slide 22: International Growth, Brand Recognition & Clients
INTERNATIONAL GROWTH, BRAND RECOGNITION & CLIENTS International Client diversification ▪ Appian acquisition in Ireland - European AIFM1 ▪ Won new business across all of our divisions highlighting diversity in our offering ▪ Forestry - Carbon credits opportunities (New ▪ 13 UK LGPS as investors, with
Slide 23: 2021 Priorities and Conclusion
2021 PRIORITIES AND CONCLUSION
Slide 24: Growth and 2021 Priorities
GROWTH AND 2021 PRIORITIES Fundraising for Gresham House UK Forestry Growth and Sustainability Fund LP and acquisition of forests for clients Launch New Zealand Carbon Credit opportunity in 2021 Continue to grow GRID in 2021 to fund acquisition of further utility-scale battery storage projects Devel
Slide 25: Conclusion
CONCLUSION → Strong period of AUM growth in challenging conditions - AUM increased by 42% to £4.0bn → Fundraising success across all divisions to deliver strategic ambitions of GH25 → Appian Asset Management acquisition will accelerate our significant ambitions to build an international presence → W
Slide 26: Appendix
APPENDIX
Slide 27: Managing the Impact of COVID-19
MANAGING THE IMPACT OF COVID-19 Areas of real resilience in our asset base and a philosophy based on long term investment horizons → Prioritising the health and safety of our team and stakeholders → No employees furloughed → Robust IT infrastructure has enabled ‘business as usual’ while remote worki
Slide 28: Our Purpose
OUR PURPOSE Deliver effective and alternative investment solutions to ensure clients achieve their financial objectives whilst making a meaningful contribution to advancing the world’s transition to a more sustainable way of life. Our commitment to integrating sustainable investment practices across
Slide 29: Management Committee
MANAGEMENT COMMITTEE Tony Dalwood Kevin Acton Chief Executive Chief Financial Officer Tony is an experienced public and private equity investor and adviser. He Kevin has over 19 years’ finance and operational experience in private established SVG Investment Managers (part of SVG Capital plc), acting
Slide 30: 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 Association of Richard is a chartered accountant who was appointed to the Board of the Investment Companies (2001-2003).
Slide 31: Sustainable Investing Committee
SUSTAINABLE INVESTING COMMITTEE Rebecca Craddock-Taylor Bozkurt Aydinoglu Peter Bachmann Heather Fleming Matthew Giles Director, Sustainable Investment & Investment Director, New Energy Managing Director, Head of Institutional Business Investment Director, Forestry Chair of the SIC Sustainable Infra
Slide 32: Investment Capabilities
INVESTMENT CAPABILITIES Capability Structure Target IRR / Total Return Target income Distribution cycle Inflation linkage Contractual cash flows Investment term Real Assets Infrastructure (BSIF) LP 8-10% Total Return 5.0-6.0% Quarterly2 ✔ - 12 years Housing (ReSI plc) Listed > 8% Total Return 5.0% Q
Slide 33: Recognition
RECOGNITION Winners Finalists ✓ Investment Week - Specialist Investment Awards - Boutique of the Year (£1bn-£5bn ✓ Investment Company of the Year 2020 – Nominee - UK Smaller Companies2 AUM) 2020 ✓ Pensions for Purpose Strategy Thought Leadership Award - Strategy Thought Leadership Award - for our pi
Slide 34: 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 35: The Growth Story
THE GROWTH STORY GRID share 870 GRID Placing issuance Programme raised £120m 2019 Results £107m raised AUM £2.8bn May-Oct 770 Acquisition of TradeRisks (Social Housing) 2017 Results AUM £649m 2018 Results Run-rate AUM £2.3bn 670 Berkshire Pension Fund takes profitable Maiden dividend Announced 20% s
Slide 36: Organic Growth Timeline
ORGANIC GROWTH TIMELINE Gresham House appointed Gresham House British £25m top-up fundraising for Gresham House British investment manager of SPARK c.£100m placement of new Strategic Investment Fund LP Baronsmead VCTs closed in Strategic Investment Fund LP Ventures plc (rebranded Gresham equity in G
Slide 37: Acquisition Growth Timeline
ACQUISITION GROWTH TIMELINE Acquired Hazel Capital LLP, a Acquired the fund and investment Acquired Aitchesse Ltd. the leading new energy infrastructure management businesses of Livingbridge VC UK’s leading forestry asset business. Gresham House New LLP. Including two Baronsmead VCTs and manager c.£
Slide 38: Real Assets £3,050m
REAL ASSETS Our Real Assets strategy invests in tangible assets, seeking to provide clients with sustainable yield and long term capital growth. Division AUM1 £3,050m 1. As at 31 December 2020
Slide 39: Gresham House Real Assets Team
GRESHAM HOUSE REAL ASSETS TEAM Housing (team of 20) Forestry (team of 25) Alex Pilato Olly Hughes Managing Director, Housing & Capital Markets Managing Director, Forestry ▪ 33 years’ industry experience ▪ 26 years’ industry experience ▪ Previously TradeRisks and JP Morgan ▪ Previously Head of Infras
Slide 40: Forestry
FORESTRY Diversifies an investment portfolio and provides exposure to timber and underlying land value growth with strong inflation linkage. ▪ A real asset class that both diversifies an investment portfolio and provides exposure to both timber and underlying land value growth ▪ The team seeks attra
Slide 41: New Energy
NEW ENERGY Returns are supported by strong asset backing, a sustainable income yield, and the potential for capital growth. ▪ Supporting the shift from reliance on finite resources to a new energy world powered by renewables, with the aim of generating sustainable long term returns ▪ Investments are
Slide 42: Sustainable Infrastructure
SUSTAINABLE INFRASTRUCTURE A defensive asset class, providing downside protection from asset backing, an attractive income stream that is often inflation-linked and providing positive impact. ▪ Targeting mid market (sub £50m) investments in local/regional projects where there is less competition to
Slide 43: Housing
HOUSING Secure, asset-backed, inflation linked income, aiming to deliver social dividend and wider positive social impact. ▪ The BSI Housing Fund invests in modern methods of construction, Help to Buy mortgages, and affordable private rented sector accommodation ▪ ReSI REIT focuses on independent re
Slide 44: Strategic Equity £920m
STRATEGIC EQUITY An investment philosophy applying a private equity approach to investing in both public and private companies. Division AUM1 £920m 1. As at 31 December 2020
Slide 45: Strategic Equity Team
STRATEGIC EQUITY TEAM Private Equity Public Equity Bevan Duncan Ken Wotton Managing Director, Strategic Equity Managing Director, Public Equity ▪ 16 years’ industry experience ▪ 19 years’ industry experience ▪ Previously Livingbridge and KPMG ▪ Previously Livingbridge and Commerzbank Steve Cordiner
Slide 46: Public Equity
PUBLIC EQUITY Takes a private equity approach to quoted smaller companies to deliver superior long-term returns. ▪ Targeting superior long-term returns in a range of public equity investments, engaging rigorous due diligence and developing a deep understanding of each investment ▪ Applies a private
Slide 47: Private Equity
PRIVATE EQUITY Access to entrepreneurial, high growth, earlier stage and lower mid- market private companies. ▪ Building on the spin-out of Baronsmead from Livingbridge to Gresham House, the investment team includes eleven investment professionals with specialist partners in talent and technology -
Slide 48: Gresham House plc Shareholders
GRESHAM HOUSE PLC SHAREHOLDERS Board / Management / Directors / Investment Committee & Advisory Group members c.8.0%1 The Royal County of Berkshire Pension Fund 14.6% Liontrust Asset Management 9.6% Aberdeen Standard Investments 4.1% Aviva Investors 4.0% Franklin Templeton Investments 3.8% Hargreave