Ashmore Group plc · LSE:ASHM
Ashmore — Morgan Stanley Financials Conference 2010
27 slides from Ashmore's conference presentation, Mar 24, 2010
Slide 1: Managing for growth in an uncertain economic and regulatory environment
Ashmore Group plc Morgan Stanley Financials Conference – 24 March 2010 Managing for growth in an uncertain economic and regulatory environment
Slide 2: Contents
Contents • Overview • Strategy • Opportunities arising from uncertain economic and regulatory environment • Appendices – selected slides from interim results to 31 December 2009 1
Slide 3: Overview: Corporate structure and AuM
Overview Corporate structure and AuM History / highlights • Specialist emerging markets asset manager • First fund, EMLIP, established in 1992 within ANZ • MBO in 1999 • IPO on London Stock Exchange in 2006 • Five core investment themes and multi- strategy …good AuM growth following expected AuM red
Slide 4: Overview: Financial summary
Overview Financial summary • Revenue and profitability development in Net revenues and profit before tax (£'m) line with AuM over recent cycle 240.0 • Performance fees strong contribution 44.7 203.5 over last 3 years 196.2 52.5 • Leading industry operating margin 159.8 159.8 148.8 135.6 20.4 • Stron
Slide 5: Ashmore's consistent three phase strategy
Strategy Ashmore’s consistent three phase strategy …capitalising on increasing investor allocations into, and between, emerging markets 4
Slide 6: Opportunity from uncertain economic environment: Phase 2
Opportunity arising from uncertain economic environment Phase 2 of Ashmore strategy • Impact of credit crisis still being felt in developed world economies whilst emerging markets are source of global growth • Emerging markets taking much greater market share − 35% of global economy in GDP terms − 7
Slide 7: Opportunity from uncertain economic environment: Phase 3
Opportunity arising from uncertain economic environment Phase 3 of Ashmore strategy • Rebalancing of emerging market central banks and other savers towards domestic and other emerging market investment − Emerging markets represents around 75% of total world FX reserves − Reducing dependence on USD r
Slide 8: Opportunity arising from current regulatory environment
Opportunity arising from current regulatory environment • Independent asset managers like Ashmore will be likely beneficiaries as banks continue to divest of asset management businesses • Ashmore’s approach is long only, with a blend of levered & unlevered funds (c60% of AuM can lever, max up to 75%
Slide 9: Conclusion
Conclusion • Ashmore’s long term strategy sits in sweet spot given current economic environment • Most recent interim period has shown strong financial and AuM performance • Investment performance strong and consistent to our investment strategy − 98% of AuM outperforming benchmark over 12 months •
Slide 10: Selected slides from interim results to December 2009
Selected slides from interim results to 31 December 2009
Slide 11: Investment performance - public funds
Assets under management Investment performance - public funds Annualised Performance Since Theme Fund Launch Date AuM US$M (1) 1m (2) 6m (2) 1 Year (2) 3 Year (2) 5 Year (2) Launch (2) EMLIP Oct-1992 3,079.0 3.1% 18.7% 35.7% 5.0% 10.7% 21.8% Benchmark (EMBI GD) 0.4% 12.2% 29.8% 6.6% 8.0% 12.1% AEMDF
Slide 12: Investment performance
Assets under management Investment performance Funds outperforming vs. benchmark – 1 year (1) (5) Net (2) Gross (3) Funds outperforming vs. benchmark – 3 years (1) (5) Net (2) Gross (4) Source: Ashmore (un-audited). Source benchmarks: Bloomberg, HSBC, JP Morgan and Morgan Stanley (1) All open-ended
Slide 13: Subscriptions and redemptions
Assets under management Subscriptions and redemptions …early cycle subscriptions and marked reduction in redemptions 12
Slide 14: External debt
Update on themes External debt Theme premise • Ashmore’s longest established and largest theme • Principally US Dollar and other hard currency denominated instruments, which may include derivatives, investing in mainly sovereign bonds Facts • Launched 1992 • Management fees(1) £37.5m (2008: £42.7m)
Slide 15: Local currency
Update on themes Local currency Theme premise • Local currency and local currency denominated debt instruments, which may include derivatives, investing in FX and mainly sovereign bonds Facts • Launched 1997 • Management fees(1) £15.3m (2008: 22.4m) • Average mgmt fee margin: 96 bps (2008: 117 bps)
Slide 16: Special situations
Update on themes Special situations Theme premise • Investments in both distressed debt (principally for control) and / or private equity Facts • Launched 2000 • Management fees(1) £21.2m (2008: £21.4m) • Average mgmt fee margin: 215 bps (2008: 185 bps) • Performance fees: £4.5m (2008: £16.2m) 31 DE
Slide 17: Equity
Update on themes Equity Theme premise • Public equity and equity-related securities • Can include equities, convertibles, warrants and equity derivatives Facts • Launched 2000 • Management fees(1) £0.8m (2008: £0.9m) • Average mgmt fee margin: 186 bps (2008: 112 bps) • Performance fees: £2.4m (2008:
Slide 18: Corporate high yield
Update on themes Corporate high yield Theme premise • Investments in corporate debt within emerging markets Facts • Launched 2007 • Management fees(1) £3.4m (2008: £2.6m) • Average mgmt fee margin: 173 bps (2008: 192 bps) • Performance fees: £0.1m (2008: nil) • 1 public fund 31 DEC 2009 Current mark
Slide 19: Multi-strategy
Update on themes Multi-strategy Theme premise • Supplements the core product range, investing into the 5 core themes and any new themes where appropriate • Includes Ashmore Global Opportunities Limited, a permanent capital vehicle, which listed on the LSE on 12 December 2007 Facts • Launched 2003 •
Slide 20: Other
Update on themes Other Theme premise • New themes developed in line with strategy to diversify capabilities and investor base Facts Existing • Fund of third party funds • Liquidity management • Overlay/hedging strategies • Real estate 31 DEC In development 2009 • Infrastructure Current markets / opp
Slide 21: New funds and classification
Fund diversification New funds and classification • 3 public funds launched: − Ashmore Institutional Multi Strategy Fund − SICAV Emerging Markets Equity Select Fund − Ashmore Russian Real Estate Recovery Fund • 2 dual branded funds launched: − US based fund focussing on local currency − Brazil local
Slide 22: Investor type and geography
Investor analysis Investor type and geography Institutional (1) 31 DEC 31 DEC 92% (91%) 2009 2009 …emerging market capital strongest source of AuM growth (1) Prior period parenthesised. 21
Slide 23: Revenue margins
Financial results Revenue margins • Principal component remains management fees • Performance fees diversified and provide upside opportunity …client mix changes through further segregated mandate wins 22
Slide 24: Income statement
Financial results Income statement Six months to 31 Six months to 31 December 2009 December 2008 Variance as reported £m £m £m % Net management fees 88.4 101.9 (13.5) (13) Performance fees 53.3 48.9 4.4 9 Other revenue 4.4 3.5 0.9 26 Foreign exchange 2.7 (49.8) 52.5 105 Net revenue 148.8 104.5 44.3
Slide 25: Cash flow & balance sheet
Financial results Cash flow & balance sheet Six months Six months Year Six months Six months Year to 31 to 31 ended to 31 to 31 ended 30 December December 30 June December December June 2009 2008 2009 2009 2008 2009 £m £m £m £m £m £m Cash from operations 73.4 108.1 150.9 Total assets 520.1 383.4 399
Slide 26: Disclaimer
Disclaimer IMPORTANT INFORMATION This document does not constitute an offer to sell or an invitation to buy shares in Ashmore Group plc or any other invitation or inducement to engage in investment activities. Certain statements, beliefs and opinions in this document are forward-looking, which refle
Slide 27: Ashmore
Ashmore
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