Gresham House Energy Storage Fund Plc GBP · LSE:GRID
Gresham House Energy Storage Fund Plc GBP — Gresham House — H1 2020 Earnings Presentation
43 slides from Gresham House Energy Storage Fund Plc GBP's earnings presentation, Sep 21, 2020
Slide 1: Specialists in sustainable alternatives: Interim Results Presentation
Specialists in sustainable alternatives Gresham House plc Interim Results Presentation to 30 June 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: Contents
CONTENTS SUMMARY 5 INTRODUCTION 6 STRATEGIC PRIORITIES 10 SUSTAINABLE INVESTING HIGHLIGHTS 14 FINANCIAL HIGHLIGHTS 17 CONCLUSION 23 APPENDIX 24
Slide 5: Summary - Six Months to 30 June
SUMMARY - SIX MONTHS TO 30 JUNE AUM Financial highlights £m as at 30 June 2020 £3,264m +16.7% → AUM up 17% in H1 to £3.3 billion: +10% organic growth → Core income up 33% to £17.8 million (H1 19: £13.4million) Total core income → Adjusted operating profit up 15% to £5.2 million (H1 19: £4.5 million)
Slide 6: An Introduction
AN INTRODUCTION
Slide 7: 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 8: 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 9: Supported by Strong Market Trends
SUPPORTED BY STRONG MARKET TRENDS Global ESG flows accelerating Net New Money (NNM) to May 20201 150 45% ▪ Interest in and active involvement 40% with Sustainable Investment set to 120 35% increase further 30% 90 25% ▪ Gresham House well positioned at 20% both product and group levels 60 15% 10% ▪ E
Slide 10: Strategic Priorities
STRATEGIC PRIORITIES
Slide 11: 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 12: 2020 Priorities - Update
2020 PRIORITIES - UPDATE 1 Deliver organic growth 10% organic growth 2 Deliver acquisition growth TradeRisks acquisition adding £184m AUM 3 Deliver operating profitability 15% growth in adjusted operating profitability TradeRisks integration underway and 4 Deliver operational efficiencies synergies
Slide 13: 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 14: Sustainable Investing Highlights
SUSTAINABLE INVESTING HIGHLIGHTS
Slide 15: Sustainable Investing
SUSTAINABLE INVESTING We define sustainable investment as “Investment that proactively manages a full range of risks and seeks to make a positive social, economic or environmental impact whilst delivering strong financial returns.” → As a signatory to the UN-supported Principles for Responsible Inve
Slide 16: Sustainable Investing - 2020 So Far
SUSTAINABLE INVESTING - 2020 SO FAR Forestry Housing ▪ Planted 8.4m trees in 2020, equivalent to the area of 4,600+ ▪ Delivered 166 new shared ownership homes this year, with a football pitches1 total shared ownership portfolio of 205 homes ▪ Our existing forestry captured the equivalent CO2 generat
Slide 17: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 18: Financial Highlights
FINANCIAL HIGHLIGHTS £m 3,264 AUM 2,797 £3,264m £m as at 30 June 2020 → AUM growth of 17% driven by both organic and +16.7% acquisition 2020 2019 → Resulting increase in core income from asset Total core income 17.8 £m for the six months to 30 June management 13.4 £17.8m +33.3% → Investing in the bu
Slide 19: 2020 AUM Update
2020 AUM UPDATE as at 30 June 2020 AUM Net Fund Funds AUM £ millions Performance Total Growth Dec-19 Flows1 Acquired/Won2 Jun-20 Public Equity 283.7 59.0 (26.3) 147.6 464.0 63.6% Strategic Equity Private Equity 424.5 20.6 (38.0) (55.2) 351.9 (17.1)% Subtotal 708.2 79.6 (64.3) 92.4 815.9 15.2% Forest
Slide 20: 2020 AUM Update
2020 AUM UPDATE Pro forma AUM progression for the period 31 December 2019 to 30 June 2020 Strategic Equity ▪ AUM growth of £108m (+15%) ▪ Robust net fund inflows of £80m from open ended funds and Baronsmead VCTs ▪ AIM and unquoted portfolio reduced by £64m due to COVID-19 impact ▪ SEC mandate adds £
Slide 21: Income Statement
INCOME STATEMENT Resilience in a challenging market environment Income Statement 2020 2019 ▪ Long-term revenue streams - weighted average length of for the six months to 30 June £m £m management contract of 15 years on £1.0bn of AUM Income 17.8 13.4 Dividends from investments in associates - - ▪ Inv
Slide 22: Balance Sheet
BALANCE SHEET A strong balance sheet Balance Sheet as at Jun 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 23: Conclusion
CONCLUSION → Strong period of AUM growth in challenging conditions - adding £0.5bn to AUM → Delivered acquisition of TradeRisks adding AUM of £184m in Housing area → Final close on British Strategic Investment Fund with commitments of £300m → Principles for Responsible Investment - top scores achiev
Slide 24: Appendix
APPENDIX
Slide 25: Our Purpose
OUR PURPOSE We are creating an “asset to covet”, for our shareholders, clients and employees, by delivering value through financial and non- financial returns alongside high-quality service. Our commitment to integrating sustainable investment practices across our strategies makes an active contribu
Slide 26: 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 17 years’ finance and operational experience in private established SVG Investment Managers (part of SVG Capital plc), acting
Slide 27: 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 28: Sustainable Investing Committee
SUSTAINABLE INVESTING COMMITTEE Rebecca Craddock-Taylor Heather Fleming Andrew Hampshire Lizzie Darbourne Ken Wotton Director, Sustainable Investment Head of Institutional Business COO and CTO Marketing Director Managing Director, Public Equity Matthew Giles Stevie Ingamells Edward Goldsworthy Garet
Slide 29: Share Price
SHARE PRICE 2019 Results AUM £2.8bn 720 TradeRisks acquisition AUM £3.3bn 670 2017 Results 2018 Results 620 Berkshire Pension Fund takes 20% stake AUM £649m AUM £2.3bn at a premium and British Strategic Maiden dividend announced Investment Fund (BSIF) announced Run-rate profitable 570 Sale of final
Slide 30: 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 31: Recognition
RECOGNITION Winners Finalists ✓ Portfolio Adviser Fund Awards - Best Fund in the IA UK Smaller Companies ✓ Investment Company of the Year 2020 – Nominee - UK Smaller Companies2 sector 20202 ✓ Professional Pensions UK Pensions Awards - Alternative Investment Manager of the Year ✓ Royal Highland Show
Slide 32: 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 33: Growth Timeline
GROWTH TIMELINE Dec-14 Aug-15 Nov-15 Aug-16 Jun-17 Oct-17 May-18 Nov-18 Jan-19 May-19 Oct-19 Mar-20 Organic Acquisition August 2015 Gresham House appointed investment manager of SPARK November 2015 Acquired Aitchesse Ltd. the UK’s leading forestry asset Ventures plc (rebranded Gresham House Strategi
Slide 34: Real Assets £2,448m
REAL ASSETS Our Real Assets strategy invests in tangible assets, seeking to provide clients with sustainable yield and long term capital growth. Division AUM1 £2,448m 1. As at 30 June 2020
Slide 35: Gresham House Real Assets Team
GRESHAM HOUSE REAL ASSETS TEAM Housing (team of 23) Forestry (team of 25) Alex Pilato Olly Hughes Managing Director, Housing & Capital Markets Managing Director, Forestry ▪ 20 years’ industry experience ▪ 26 years’ industry experience ▪ Previously TradeRisks and JP Morgan ▪ Previously Head of Infras
Slide 36: 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 37: 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 38: 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 39: Strategic Equity £816m
STRATEGIC EQUITY An investment philosophy applying a private equity approach to investing in both public and private companies. Division AUM1 £816m 1. As at 30 June 2020
Slide 40: 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 41: 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 42: 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 43: 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 15.6 Liontrust Asset Management 9.8 Mr Richard C Dawson 5.0 Tellworth Investments 4.8 Aberdeen Standard Investments 4.4 Franklin Templeton