Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — Conference Presentation (June 2013)
38 slides from Virtus Investment Partners's conference presentation, Jun 12, 2013
Slide 1: Broad Capabilities, Combined Strength
Exhibit 99.1 MORGAN JUNE GEORGE President Chief BROAD Executive 12,CAPABILITIES and 2013 R. STANLEY AYLWARD OfficerFINANCIALS | COMBINED CONFERENCE STRENGTH
Slide 2: Important Disclosures
Important This expectations, as and All results Our with Certain discussed The factors. circumstances public modify fees), receive slight applicable) Morningstar Please 4361 Past Mutual 2 “expect,” of uncertainty, company forward-looking business performance presentation the or placing variations ou
Slide 3: Introduction: NASDAQ Listing and Trading
NASDAQ: LISTING Introduction COMMENCED January CLOSING AVERAGE $238.31 COMMON 55,152 8.1 MARKET $1.9 1 2 3 million billion Trailing 2, 2009 CAPITALIZATION PRICE, VRTS SHARES DAILY Fully 30-day TRADING JUNE dilutedTRADING OUTSTANDING2 average 10, 2013 VOLUME1 as of 6/1/2013
Slide 4: Firm Overview
Firm ?Independent – ?Disciplined, brand 1 4 Virtus Variable Closed-end Separately Institutional Overview ?One As Mutual insurance of ofmanaged institutional-quality mutual publicly May accounts the Funds nation’s 31, funds funds accounts traded 2013fastest-growing assetmoney management management as
Slide 5: Virtus Flexible Model
Virtus Flexible Model High Product Effective Capabilities Differentiated Strong and – 5 Attractive Well-diversified Multi-boutique, Shared Disciplined Multi-market Effective Leveragable Flexible Multiple Growth Quality Value Operating Offerings Multi-Boutique distribution Distribution model capital
Slide 6: Multi-Boutique Model
Virtus Multi-boutique, asset Model High Flexible Product access Effective managers Shared support Capabilities Strong and 6 Growth manager Quality Value to Operating distribution services Offerings Multi-Boutique model high-quality Distribution Opportunities Proposition &provides Diverse multi-strat
Slide 7: Benefits of Our Multi-Manager Model
Benefits We Our ?Ability ?Agility ?Multiple – 7 Weare model provide are a of to distinctive highly not growth gives offer aMulti-Manager dependent boutique strategies responsive aus: opportunities broad partnership firm for on array aModel with changing tosingle client ofof product differentiated bo
Slide 8: Affiliated Managers and Subadvisers
Fixed Income Equity Affiliated Alts Global Munis Taxable Int’l Value Core Growth Other Select 8 Subadvisers Managers
Slide 9: Flexible Multi-Boutique Model
Flexible Our ?Our ?Benefits – 9 Affiliated Managers Unaffiliated Expanding Leveraging Providing primary flexible Multi-Boutique ofmanagers in multiple this objective product model distribution subadvisers which approach allows growth capabilities Virtus is Model toand include: provide us has opportu
Slide 10: Shared Distribution and Business Support
Shared Our ?Strong ?Shared – 10Broad Experienced Comprehensive Product Centralized managers Distribution Retail and Business management, deep business focus retail Distribution access marketing Operations and sales onsupport what fund Support inforce multiple and they services including and e-busine
Slide 11: Virtus Flexible Model: Product Offerings
Virtus Flexible Model High Product Attractive Effective Capabilities Strong and 11 Growth Quality Value differentiated Operating Offerings Multi-Boutique Distribution investment Opportunities performance Proposition & Diverse Attributes andstrategies offerings development Disciplined Well-diversifie
Slide 12: Diverse Product Offerings and AUM
Offerings AUM Money Institutional $4.6 Managed Accounts $6.4 Insurance Variable $1.3 Mutual 13% Closed-End Funds $6.6 34% Total $17.6 Equity $ As 12Billions ofDomestic Cash 4% Long-Term $30.6 AUM: March by 3% $15.9 Market Funds 22% Product $1.8 8% are Equity 60% $1.7 $51.2 31, balanced 3% 31% $11.4
Slide 13: Effective Manager Selection and Oversight
Effective Description Manager Selection Partner interest Income Performance Oversight Rigorous quality, investment Product Development Focus differentiated – (1) 9 variable (2) 13 onwith and As consistency Fund Selective selection, Focused emerging Product monitoring distinctive, performance of styl
Slide 14: Diverse Product Strategies and Ratings
Diverse Morningstar U.S. Small-Cap AlphaSector™ Growth Quality Mid-Cap Strategic INTERNATIONAL Emerging ALTERNATIVE Global International REIT Alternatives Dynamic ASSET Tactical Balanced 1Load-Waived 14 EQUITY 2Dividend REIT Global ALLOCATION Small-Cap Large-Cap & Allocation and Growth Value AlphaSe
Slide 15: Virtus Flexible Model: Distribution
Virtus Flexible Model High Product Effective Strong Capabilities and 15 Growth Quality Value distribution Operating Offerings Multi-Boutique sales Distribution Opportunities Proposition &force Diverse Attributes retail reach and strategy markets Differentiated Multi-market and approach broad to
Slide 16: Multi-Market Distribution Channels
Multi-Market Attractive Channels Wirehouse Broad Independent/RIA Area Retirement Opportunity Insurance Provide Institutional Sales 16 of process penetration emerging investment Approach Focus investment Support Sales Products toprimarily Distribution offer on effort Cover growth and national options
Slide 17: Differentiated Approach to Retail Markets
Differentiated Our ?One-point better – 17Alpha-generating Yield Less Better Help differentiated manage reliance navigating global access Approach their reach on the approach equity/fixed toopportunities book amarkets variety to ofRetail business distinguishes of income differentiated Markets ?Assist
Slide 18: Strong Growth Metrics: Sales and Flows
Strong Diverse Gross $4.5 $5.7 $6.4 $9.5 $12.3 2009 $0.5 $1.7 $2.8 $3.6 GROWTH Sales Net Top $ 1 18in Flow EMO Flows billions Selling $5.1 2010 Rate –Sales Growth Compound offerings Rate 41.1% 2011 METRICS Fund Virtus 7.8% in2012 MSB and Fund 50.1% Annual 18.7% Emergingdifferentiated 1QMSB Sales 80.
Slide 19: Effective Distribution: Sales and Flow Rankings
Effective Consistently Gross 12/31/11 % AUM industry Sales Net $ *Sales Change +Annualized 19Rank Millions Rank Flows* Flow Rate* $16,897 Growth Sales* and $in % leading 12/31/12 Rank Distribution Rate* AUM, Rank Net $5,054 80% strong $9,478 43% 54 $Flow 43% % Rank 1Sales $25,827 3/31/13 73% 15 Rank
Slide 20: Virtus Flexible Model: Operating Structure
Virtus Flexible Model High Product sustained Effective Strong Capabilities and 20 Growth Quality Value operating Operating Offerings Multi-Boutique Distribution growth Opportunities Proposition & Diverse structure Attributes Multiple Flexible Leveragable opportunities capital andposition for variabl
Slide 21: Leveragable Operating Structure
Leveragable Our Revenues, Expenses, $111.4 $130.1 $155.1 $211.6 $87.2 2009 $39.4 $64.5 $80.2 KEY Average Employment Other Variable $ 1CAGR 2Variable 21in millions business 2010 METRICS $89.7 Op $111.4 AUM –Cost Expense costs as Compound as 2011 and adjusted Ratio benefits adjusted %2 ($ are 2012 Var
Slide 22: Consistent Operating Income Growth
Consistent Sales Operating $21.7 $43.7 $81.5 2009 $7.0 KEY Margin Capture Fee $ 1CAGR 2Incremental associated 22in Rate millions 2010 METRICS growth $25.1 8.0% Ratio2 –(bps) Income, Compound with Growth 2011 within 19.5% operating 34 N/A payments 2012 37 as in61% leveragable 28.2% 41 Earnings adjust
Slide 23: Flexible Capital Position
‘ Flexible Strong Preferred Debt Stockholder $35.2 $20.0 $244.5 $45.0 $35.9 $15.0 $36.6 12/31/08 KEY Working Available Gross Fully ($ 1Excluding converted 23 andMETRICS Diluted $15.0 $45.9 $29.7 Def. shares cash Capital Capital 12/31/09 Equity Debt basis Tax provision flows $183.2 $48.3 Equity in Sh
Slide 24: Multiple Growth Opportunities: Product
Multiple Our Description Product Flexible Growth Opportunities Broaden – 24Add Identify Model Ownership Offer Introduce Develop Partner model new existing Leverage approach accommodates capabilities Opportunities with emerging additional and teams strategies new Focus structures –new strategy Increa
Slide 25: Multiple Growth Opportunities: Distribution
Multiple Our Description Distribution Opportunity Growth Opportunities Expand – 25Leverage Offer Increase Expand Provide Partner model attractive efforts into Increase Opportunities with sales existing access focus institutional and strength Ability non-U.S. to–new in expand strategy efforts Leverag
Slide 26: Virtus Flexible Model: Sustained Growth
Virtus Flexible High Model Multiple for Strong Capabilities and 26 sustained Growth Quality Value Operating Multi-Boutique opportunities Opportunities Proposition growth & Diverse Attributes Effective Product Distribution Offerings
Slide 27: Appendix
ew INVESTMENT PARTNERS Appendix 27
Slide 28: GAAP Quarterly Trend: Operating Statement
GAAP Quarterly Q1:12 Investment Revenues Administration Employment Distribution Other investment Restructuring Depreciation Amortization Total Operating $ 28in thousands revenues operating income operating Q2:12 Income Trend Expenses income products management and and expenses Q3:12 of and 62,398 St
Slide 29: GAAP Quarterly Trend: Income Statement
GAAP Quarterly Q1:12 Realized consolidated Other Interest sponsored Total Income Noncontrolling Preferred Allocation Net $ 29in Income thousands other interest Income income Q2:12 Income (Expense) expense and Before tax and stockholder Trend investment of income expense Attributable dividend 5,450 s
Slide 30: Non-GAAP Quarterly Trend Schedule
Schedule Quarterly Q1:12 Revenues, Distribution Less: epreciation Stock-based Restructuring Newfleet Consolidated Closed-end Operating $ 30in thousands Q2:12 transition of Trend Expenses, Income, margin, GAAP as and fund Non-GAAP and compensation adjusted Q3:12 sponsored and amortization and adminis
Slide 31: Condensed Quarter-end Balance Sheet Trend: Assets
Condensed Quarter-end 3/31/12 Assets Cash consolidated products—947 Marketable Investments investment Other sponsored —1,396 Goodwill Deferred Long-term Total $ 31in thousands and current assets current 6/30/12 683 taxes, cash and investment assets products—35,560 Balance securities $278,116 Trend o
Slide 32: Condensed Quarter-end Balance Sheet Trend: Liabilities
Condensed Quarter-end 3/31/12 Liabilities Current Other sponsored Note Long-term Redeemable Convertible Non-reedemable Total Working 1 32 $ payable equity liabilities current Working liabilities 6/30/12 capital and investment liabilities in thousandsBalance preferred attributable Trend noncontrollin
Slide 33: AUM Quarterly Trend: Average Assets and Fees
AUM Quarterly Q1:12 By Average (In Mutual Variable Separately Institutional Total (1) (2) 33 1) 2) 3) (3) (4) $ basis Product $38,041.9 $36,288.3 46.4 and Q2:12 Funds Includes Net Insurance points, Trend Average 47.2 Managed (period (average) Products Management Q3:12 –Products Averages inInstitutio
Slide 34: Assets Under Management Quarterly Trend
Assets Quarterly Q1:12 All Beginning Inflows Outflows Net Market Acquisitions Ending AUM Equity Fixed Cash % Total $ 34inofProduct Flows millions total 1,851.8 $38,041.9 Income by Q2:12 Under $21,940.9 appreciation Balance 3,515.1 asset (1,638.4) Trend 57.7% 37.4% 4.9% 1,876.7 balance Flows (disposi
Slide 35: Assets Under Management by Product: Mutual Funds
Assets Asset Q1:12 Outflows Inflows Net Outflows———— Market Mutual Beginning Acquisitions Ending $ 35in Flows millions Flows Q2:12 Under appreciation Balance Funds 2,888.7 205.4 (1,203.0) 1,685.7 205.4 balance –(dispositions)/Other Q3:12 Management 9.6 –By 2,754.0 Long Closed-End Money $19,955.1 $5,
Slide 36: Assets Under Management by Product: Insurance, Managed Accounts, Institutional
Assets Asset Q1:12 Variable Separately Institutional Beginning Inflows Outflows Net Market Acquisitions Ending $ 36in Flows millions Flows Q2:12 Under appreciation Balance 10.7 308.0 102.3 Insurance (64.5) (252.3) (118.6) (53.8) 55.7 (16.3) balance Managed Products –8.3 (dispositions)/Other———— (dis
Slide 37: Footnotes and Non-GAAP Notes
Footnotes be metrics Management Notes 1) 2) provides 2012, months 3) equity 4) respectively, 5) unreimbursed 6) expenses. other costs stock-based expenses 7) The of Revenues Revenues, For Operating items enhanced company above will asset distribution for the issued for ended in useful are Reconcilia
Slide 38: Virtus Investment Partners
a INVESTMENT PARTNERS _VIRTUS | INVESTMENT PARTNERS
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