Polar Capital Holdings Plc · LSE:POLR
Polar Capital — Q1 2025 Earnings Presentation
33 slides from Polar Capital's earnings presentation, Nov 22, 2024
Slide 1: Polar Capital: Interim Results
Polar Capital: Interim Results September 2024 Gavin Rochussen, Chief Executive Officer Samir Ayub, Chief Financial Officer polarcapitalfunds.co.uk This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Slide 2: Overview And Highlights
Overview And Highlights Improved fund performance Average AuM Adjusted diluted 1st interim increased 15% to EPS increased dividend held at £22.4bn1 42%1 14p International Core operating Small Company profit increased mutual fund 21%1 launched for US investors2 Net inflows in the six months of £472m
Slide 3: Market Perspective
Market Perspective This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Slide 4: Market Perspective
Market Perspective Global indices vs volatility 300% • The period ended on a strong note for both equity and bond markets 250% • Inflation has moderated. Interest rate cuts by central 200% banks have started and may continue into 2025 150% • Equity and bond volatility fell sharply after the US elect
Slide 5: Market Perspective
Market Perspective Net sales of funds across Europe (€m) 50,000 • Pan-European industry fund sales reached €125bn in the six months to 30 September 2024, although flows declined month-over-month in Q3 25,000 • Fixed income led inflows with €116bn over the period • Equity flows totalled €44bn, driven
Slide 6: Fund Performance And Capacity
Fund Performance And Capacity This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Slide 7: UCITS Performance
UCITS Performance Relative annualised fund performance against benchmark (since inception) 10% 6.7% 6.9% 5% 4.4% 3.7% 3.6% 2.0% 2.5% 1.4% 1.6% 1.0% 1.6% 0.7% 0.5% 0.6% 0% -0.7% -1.0% -0.1% -0.3% -0.8% -5% -3.3% -6.7% -10% 1st Quartile -15% 2nd Quartile -13.2% 3rd Quartile 4th Quartile -20% Past perf
Slide 8: Performance
Performance % of UCITS funds AuM by quartile ranking 100 Strong UCITS fund performance against Lipper 90 peer groups 80 % of UCITS AuM in the top two quartiles: 70 60 September 2024 September 2023 50 90% Over one year 73% Over one year 40 30 20 77% Over three years 48% Over three years 10 0 1 Year 3
Slide 9: Performance Against Benchmarks
Performance Against Benchmarks % of UCITS AuM that have outperformed benchmark 30 Sept 2023 vs 30 Sept 2024 • % AuM outperforming benchmark over 1 year, 3 years, 5 SI years and since inception has improved over the year • 88% of AuM outperforming benchmark since inception compared to 64% as of 30 Se
Slide 10: Capacity
Capacity Capacity as at 30 September 2024 Global Technology* • Total capacity across all strategies is £64bn Global Healthcare • Total remaining capacity is £42bn Emerging Markets & Asia Global Insurance • Remaining capacity in Funds that received net inflows in the six months to 30 September 2024 i
Slide 11: AuM And Fund Flows
AuM And Fund Flows This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Slide 12: AuM September 2024
AuM 30 September 2024 £bn Average AuM CAGR 9.5%1 23.4 22.1 22.7 21.9 20.9 18.7 19.2 19.1 16.4 13.8 14.3 12.2 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 Sep-24 AuM Average AuM (trailing 12 months) Past performance is not indicative or a guarantee of future results. S
Slide 13: Gross and Net Flows Per Strategy
Gross and Net Flows Per Strategy Six months to 30 September 2024 £m 1500 • Most strategies had gross inflows in the period 1000 • While the regional strategies suffered the most from gross outflows, UK Value had sizeable gross inflows but 500 insufficient to offset gross outflows • Technology saw st
Slide 14: Financial Review
Financial Review This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Slide 15: Financial Highlights
Financial Highlights H1 2024: Changes in profit before tax vs comparable period (£m) £m 6 months to 6 months to Change 40 30 Sep-24 30 Sep-23 AuM and Revenue 35 Average AUM (£bn) £22.4bn £19.4bn 15% 3.3 23.0 -3.6 -7.0 Net management fees (£m) £87.6m £76.5m 15% 30 Net management fee yield 78 bp 79 bp
Slide 16: Operating Costs
Operating Costs Managing cost base sensibly over the long term H1 2024: Changes in total operating and finance cost vs comparable period (£m) 6 months to 6 months to £m 30 Sep-24 30 Sep-23 £m £m 75 Salaries, bonuses and other 19.7 17.3 staff costs1 70 Core distributions1 24.4 20.9 Share-based paymen
Slide 17: Other Operating Costs And Exceptional Items
Other Operating Costs And Exceptional Items 6 months to 6 months to 6 months to 6 months to Sep-24 Sep-23 Sep-24 Sep-23 Other operating costs £m £m Exceptional items £m £m IT 3.8 3.5 Recorded in operating costs Rent and rates 2.5 2.2 Professional fees 1.1 1.2 Impairment of goodwill 5.4 - Research an
Slide 18: Cash And Seed Investments
Cash And Seed Investments Strong balance sheet 30 Sep 2024 30 Sep 2023 Total cash and seed investments of £115.5m Total cash and seed investments of £107.1m £m £m Cash and deposits 71.6 Cash 72.8 Seed investments 43.9 Seed investments 34.3 EM Stars US Mutual 6.8 EM Stars US Mutual 5.9 China Stars 7.
Slide 19: Group Capital
Group Capital Strong balance sheet 30 Sep-24 31 Mar-24 Capital allocation (£m) Regulatory Capital £m £m 160 Shareholders funds 124.5 135.9 140 135.9 Less: Regulatory deductions1 -20.6 -26.8 124.5 120 26.8 Capital after regulatory deductions 103.9 109.1 20.6 100 Less: dividend provision -13.6 -31.0 1
Slide 20: Dividend Policy
Dividend Policy Mar-21 Mar-22 Mar-23 Mar-24 £175.7m £169.4m £151.0m £141.4m Total cash and investments • First interim dividend maintained at 14p 70 50 • Payout ratio of 68% of adjusted core earnings per share recognising the 60 strength of the balance sheet and 40 56.0p confidence in the business 5
Slide 21: Strategy And Outlook
Strategy And Outlook This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Slide 22: Growth With Diversification – Product Development
Growth With Diversification – Product Development A measured and focussed approach to product growth with pipeline of new ideas Product launches • Melchior European Absolute Return1 • Emerging Market • Melchior Global Stars Equity1 • European Small Cap • China Stars • Melchior European • EM Ex-China
Slide 23: Emerging Markets & Asia Team
Emerging Markets & Asia Team Strong demand witnessed. Now third largest team by AUM Performance: Fund vs benchmark (%)1 80% Highlights and Ratings 40% • Team AUM: £2,854.1m 0% • Fundamentally-driven analysis and -40% stock selection • ESG-based analysis incorporated as part of the investment process
Slide 24: Polar Capital Global Small Company Team
Polar Capital Global Small Company Team Dan Boston Maxine Mazan, CFA Head of Global Small Company team Researcher 19+ years buyside experience 9+ years industry experience MBA, Yale School of Management MA in International Relations, Edinburgh University Research Assistant for Robert Shiller MSc in
Slide 25: Summary And Outlook
Summary And Outlook Strong balance sheet continues to underpin the 14p dividend which is covered The outlook is £23.9bn AuM as at the interim at 8 November is constructive. Strong pipeline stage higher than With the US for potential average AuM election and UK inflows with over the six budget behind
Slide 26: Questions?
Questions? This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Slide 27: Appendices
Appendices This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Slide 28: Current Investment Strategies
Current Investment Strategies Global Technology AuM: £9.7bn Global Healthcare AuM: £3.9bn Global Healthcare Trust Established: 2001 Technology Trust Established: 2007 Healthcare Opportunities (UCITS) Typical number of positions: 50-110 Global Technology (UCITS) Typical number of positions: 25-80 Bio
Slide 29: Current Investment Strategies
Current Investment Strategies Emerging Market & Asia AuM: £2.9bn UK Value AuM: £1.0bn Emerging Market Stars (UCITS) China Stars (UCITS) Established: 2017 UK Value Opportunities Established: 2018 Asian Stars (UCITS) (UCITS) Typical number of positions: 30-100 Typical number of positions: 40-70 Emergi
Slide 30: Lipper Figures For Long And Alternative UCITS
Lipper Figures For Long And Alternative UCITS As At 30 September 2024 1 Year 3 Years 5 Years Since AuM £m Percentile Percentile Percentile Inception 15* Japan Value (S JPY) 203 61 11 45 29/07/20161 7** Healthcare Opportunities (I USD) 1513 3 6 5 3/12/2007 20 Healthcare Blue Chip (I USD) 197 16 4 11
Slide 31: AUM Analysis
AUM Analysis AuM split by strategy Investor mix split by geography Long only 98.0% UK 52.4% Alternative 2.0% Europe 31.4% Asia 7.1% Open Ended funds 74.7% Nordics 5.3% Investment Trusts 22.4% Other 2.1% Segregated Mandates 2.9% North America 1.6% AuM split by investment team Investor mix split by ho
Slide 32: Reconciliation of APMs to reported results
Reconciliation of APMs to reported results Reclassification on 2024 Interim 2023 Interim 2024 Interim consolidation of Reclassification Non-GAAP Non-GAAP reported results seed investments of costs results results (£m) (£m) (£m) (£m) (£m) Management fees 100.6 - - 100.6 86.9 Commissions and fees paya
Slide 33: Important Information
Important Information Polar Capital, 16 Palace Street, London SW1E 5JD House View This document has been produced based on Polar Capital research and analysis and represents our house view. All sources are Polar Capital unless otherwise stated. Important Information The information provided in this
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