Pacific Current Group Ltd · ASX:PAC
Pacific Current — H1 2019 Earnings Presentation
38 slides from Pacific Current's earnings presentation, Feb 28, 2019
Slide 1: Pacific Current Group Half Year Results
33° 51' 50.457" S, 151° 12' 23.437" E Level 29, 259 George Street, Sydney NSW 2000 T: +61 2 8243 0400 // F: +61 2 8243 0410 28 February 2019 PACIFIC CURRENT GROUP HALF YEAR RESULTS Six months ended 31 December 2018 HIGHLIGHTS • Underlying NPBT of A$8.8m for the half year, up 1.1% compared to A$8.7m
Slide 2: Portfolio Company Highlights
33° 51' 50.457" S, 151° 12' 23.437" E Level 29, 259 George Street, Sydney NSW 2000 T: +61 2 8243 0400 // F: +61 2 8243 0410 PORTFOLIO COMPANY HIGHLIGHTS Total funds under management (FUM) at 31 December 2018 were A$44.3bn, a 16.7% increase since 30 June, adjusting for the sale of Aperio, RARE, and C
Slide 3: Outlook
33° 51' 50.457" S, 151° 12' 23.437" E Level 29, 259 George Street, Sydney NSW 2000 T: +61 2 8243 0400 // F: +61 2 8243 0410 OUTLOOK Pacific Current’s Chairman, Mr. Tony Robinson said, “The company has continued to maintain a strong balance and been very prudent in deploying capital into unique, dive
Slide 4: Conference Call
33° 51' 50.457" S, 151° 12' 23.437" E Level 29, 259 George Street, Sydney NSW 2000 T: +61 2 8243 0400 // F: +61 2 8243 0410 CONFERENCE CALL Investors and analysts are invited to participate in a conference call on Friday, 1 March 2019 at 10:00am AEDT. The call will be hosted by Pacific Current Group
Slide 5: HY 2019 Results
H Y 2 0 1 9 R E S U LT S For the half-year ended 31 December 2018 PRESENTERS: Paul Greenwood, Managing Director & CEO and CIO Joseph Ferragina, CFO & COO ASX : PAC
Slide 6: Disclaimer
Disclaimer The information in this presentation is general information about Pacific Current Group (‘Pacific Current’ or ‘PAC’) and is current only at the date of this presentation. In particular, this presentation: ❯ is not an offer or recommendation to purchase or subscribe for securities in Pacif
Slide 7: Agenda
Agenda 1. Overview 2. Portfolio Update 3. Financials 4. Appendix 5. Q & A 6. Carlisle Discussion Materials // 3
Slide 8: Overview
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Slide 9: Overview – 1H19 Highlights
Overview – 1H19 Highlights ❯ Financial Strength – Steady in a challenging environment, benefits of diversified portfolio mix ❯ Portfolio Growth – Rapid FUM growth, with mixed investment performance during the year ❯ Portfolio Management – Busy half year with three divestments and three acquisitions*
Slide 10: Overview – 1H19 Highlights
Overview – 1H19 Highlights ❯ Financial Strength • Underlying net profit before tax of A$8.8m compared to A$8.7m in 1H18 • Statutory profit of A$47.8m compared to A$107.2m in 1H18 • Dividend of A$0.10 per share compared to nil in 1H18 • Underlying EPS of A$0.17 compared to A$0.20 in 1H18 ❯ Portfolio
Slide 11: Overview – Portfolio Management Highlights
Overview – Portfolio Management Highlights ❯ Investments sold • Sold 23.4% stake in Aperio Group to Golden Gate Capital for approximately US$72m (A$97.7m) • Put remaining stake in RARE to Legg Mason for A$21.5m • Sold position in Celeste to management for A$1.6m ❯ Investments • Purchased 24.9% of pr
Slide 12: Investment Opportunities
Investment Opportunities ❯ Pipeline • PAC expects to make a modest (approximately A$7m) investment in the near-term • Engaged in multiple late-stage discussions with potential investment targets • Pipeline remains heavily, though not exclusively, focused on companies with highly visible revenues Opp
Slide 13: 1H19 Financial Results Summary
1H19 Financial Results Summary » Total FUM of boutiques reaches A$44.3bn 28% ▪ Open End: A$32.0bn FUM A$44.3bn* 72% ▪ Closed End: A$12.3bn » Underlying Net Profit Before Tax of A$8.8m, up A$8.8m** NPBT 1.1% 1.1% from A$8.7m in 1H18 A$61.8m statutory » Underlying Net Profit After Tax of A$7.9m, A$7.9
Slide 14: Overview of PAC
Overview of PAC Aurora Trust Tier 1 Boutiques Tier 2 Boutiques International and Diversified real China ETF index global equity assets provider International and emerging markets Global and emerging Private infrastructure small cap markets equity Alternative energy Australian REIT infrastructure & u
Slide 15: Boutique Results
Boutique Results Tier 1 Boutiques Diversified real Global and emerging US equity assets markets equity Private debt, credit & equity Key Metrics 1H19* 1H18* FUM as at 31 December A$34.5 A$19.2 Revenue for the half year A$83.3m A$36.0m PAC Share of profits / revenues A$11.8m A$6.4m *Both 1H19 and 1H1
Slide 16: Boutique Results
Boutique Results Tier 2 Boutiques China ETF index Alternative energy Hedge fund provider infrastructure seeding International and International and Private equity and emerging markets global equity hedge fund small cap placement agent Private equity and real Australian REIT Private infrastructure as
Slide 17: Portfolio
Portfolio Company Update FUM 30 June 2018 vs. 31 December 2018 (in each manager’s home currency) Tier 1 Boutiques Tier 2 Boutiques 20 Billions 7 +29% Billions 18 +9% 16 6 14 5 12 4 10 8 3 6 2 4 -12% -17% 1 -16% -14% 2 +11% -1% -8% +20% - - Aether GQG Seizert Victory Park Alphashares Blackcrane EAM F
Slide 18: Portfolio Update
P O R T F O L I O U P D AT E
Slide 19: Portfolio Company Update – Performance
Portfolio Company Update – Performance ❯ Portfolio Company Developments • Significant market decline hurt all equity managers • Relative performance very difficult for Blackcrane and EAM in 2018 • GQG had strong performance year, while Seizert’s was mixed Portfolio Company Investment Performance (Pu
Slide 20: Tier 1 Boutiques
Tier 1 Boutiques Boutique: Equity Ownership: 100% PM / CIO: Sean Goodrich and Troy Schell Economics: 100% of excess management fee* FUM (31 December 18): US$1.4bn First close of ARA V in July 2018 (US$145m), Second close Fund Flows: (US$56m) January 2019 First Investment: Invested at firm inception
Slide 21: Tier 1 Boutiques
Tier 1 Boutiques Boutique: Equity Ownership: 5% equity PM / CIO: Rajiv Jain Economics: Equity and revenue share FUM (31 December 18): US$17.6bn Growing exceptionally rapidly in multiple geographies and Fund Flows: distribution channels First Investment: Invested at inception in June of 2016, zero FU
Slide 22: Tier 1 Boutiques
Tier 1 Boutiques Boutique: Equity Ownership: 100% preferred equity, 50% common equity PM / CIO: David Collon, Edward Eberle, & Gerry Seizert Preferred profit share, reduced to pro rata after certain Economics: milestones FUM (31 December 18): US$2.5bn Winning some new business in difficult environme
Slide 23: Tier 1 Boutiques
Tier 1 Boutiques Boutique: Equity Ownership: 24.9% PM / CIO: Richard Levy and Brendan Carroll Economics: Equity share FUM (31 December 18): US$2.8bn Fund Flows: In advanced discussions with multiple large separate accounts First Investment: July 2018, FUM US$3.1bn Seeing heightened interest in its l
Slide 24: Tier 2 Boutiques
Tier 2 Boutiques » Provides direct exposure to Chinese markets primarily through a series of China indexes » Revenue generated through an index licensing agreement » Equity ownership: 36%, Dec-18 FUM: US$577m » Active global and international equities manager » Equity ownership: 25%, Dec-18 FUM: US$
Slide 25: Tier 2 Boutiques
Tier 2 Boutiques » Private equity fund focused on alternative energy infrastructure and project development in India » Equity ownership 50%, FUM: n/a » Strategic partner and financial advisory business for private companies, hedge funds and private equity » Equity ownership: 29.9%, FUM: n/a » Hedge
Slide 26: Financials
FINANCIALS
Slide 27: Underlying Financial Results of PAC
Underlying Financial Results of PAC Pro forma PAC P&L on a ‘look-through’ basis adjusted for one-off/non-cash items PAC ❯ Excludes non-recurring and/or non-cash items to P&L Highlights (A$m) Pro Forma* 1H19 show underlying business performance Revenue 3.7 ❯ Aether, Seizert and Strategic Capital Inve
Slide 28: Appendix
APPENDIX
Slide 29: PAC – Statutory P&L
PAC – Statutory P&L PAC PAC Statutory Statutory ❯ Results for 1H19 are P&L Highlights (A$m) 1H18* 1H19 % Change consolidated with Seizert, Revenue 20.1 26.1 30% Aether, SCI and Midco Net gains on investments 103.4 71.2 (31%) ❯ Interim dividend of A$0.10 Employee expenses 10.5 11.7 11% declared by th
Slide 30: PAC – Underlying P&L
PAC – Underlying P&L Underlying P&L (A$m) 1H19 ❯ Impairment of investment relates to Aether, Seizert, Blackcrane and FIM Statutory Net Profit After Tax 47.9 ❯ Gain on sale of investment reflects Gain on sale of investments (Aperio, RARE and Celeste) (71.4) sale of Aperio Income tax expense on the sa
Slide 31: PAC – Balance Sheet
PAC – Balance Sheet ❯ Reflects consolidation of Aether, Seizert, Midco Balance Sheet – PAC (A$m) As at 31 Dec 2018 and its subsidiaries Current Assets 152.8 Non-Current Assets ❯ Carrying values have been tested and/or adjusted for impairment Investments in associates 112.3 Intangible assets 105.6 ❯
Slide 32: Q&A
Q&A
Slide 33: Carlisle Management Company
Carlisle Management Company Discussion Materials November 2018
Slide 34: Life Settlements for a Policy Holder
Absolute Return Fund I Overview Luxembourg Life Fund FCP SIF Life Settlements for a Policy Holder Life Settlements provide an economically favourable alternative for senior US citizens in possession of unwanted or unneeded life insurance policies. The seller remains the insured person, while the buy
Slide 35: US Life Settlement – Demographic Trends & Market Development
Absolute Return Fund I Overview Luxembourg Life Fund FCP SIF Demographic Trends & Market Development Over $30bn of life settlements are in-force today (1), and as the asset class has matured a tertiary market for settlements has evolved that allows institutional investors to effectively deploy capit
Slide 36: Demographic Trends & Market Development
Absolute Return Fund I Overview Luxembourg Life Fund FCP SIF Demographic Trends & Market Development Valuation of Life Settlements is based on the same underlying foundation of life insurance. Medical Underwriting and Mortality Tables, provide investor with the relevant information necessary to calc
Slide 37: Life Settlements as an Investment
Absolute Return Fund I Overview Luxembourg Life Fund FCP SIF Life Settlements as an Investment The settlement price for each life settlement is derived from the probability-weighted present values of the cash flows (premiums and policy benefits) associated with the policy. The most significant deter
Slide 38: Disclaimer
Absolute Return Fund I Overview Luxembourg Life Fund FCP SIF Disclaimer Carlisle Management Company classifies as an alternative investment fund manager (AIFM) under the AIFM Law. It is supervised by the Luxembourg financial regulator. Pursuant to AIFM Law, Carlisle Management Company is authorised
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