JZ Capital Partners Limited · LSE:JZCP
JZ Capital Partners — H1 2015 Earnings Presentation
35 slides from JZ Capital Partners's earnings presentation, November 2015
Slide 1: 2015 Interim Results Presentation
2015 Interim Results Presentation
Slide 2: Disclaimer
This Document and the presentation to which it relates (‘Presentation’) do not constitute or form part of, and should not be construed as, an issue for sale or subscription of, or solicitation of any offer or invitation to subscribe for, underwrite or otherwise acquire or dispose of any securities o
Slide 3: Contents
Contents Highlights Strategic Initiatives: Capital Raise and ZDP Rollover Portfolio Review Outlook Appendix 3
Slide 4: HY 15 Highlights
HY 15 Highlights Pre-dividend NAV • NAV of $693.7 million (28/02/14: $705.5 million) of US$10.84 • Pre-dividend NAV per share steady at $10.84 (28/02/15: $10.85) • Strong three-year cumulative total shareholder return of 40.5% Strong • Interim dividend of 16.0 cents per share declared for the period
Slide 5: Balance sheet summary
Balance sheet summary $ 000 $ 000 Investments 31/08/15 28/02/15 US Micro cap 353,530 297,340 $ 000 $ 000 Investments 31/08/15 28/02/15 European Micro cap 258,753 245,884 Total Assets 1,038,477 995,677 - Liabilities (167,112) (115,791) Real Estate 260,914 216,781 - ZDP’s (110,474) (106,813) Other Inv
Slide 6: Net asset value
Net asset value $0.31 $0.02 $0.01 $10.85 $10.67 ($0.03) ($0.175) ($0.19) ($0.14) $0.01 NAV per US Micro Cap European Micro Real Estate Other Dividends Paid Expense and Finance Costs Foreign NAV per Ordinary Share Cap Investments Taxation Exchange Effect Ordinary Share as of 28 February as of 31 Augu
Slide 7: Share price and NAV per share performance
Share price and NAV per share performance Cumulative NAV total returns* Cumulative total shareholder returns* 78.0% 58.6% 40.5% NAV to market price discount 23.6% 37% 41% 41% 8.8% 4.8% 29% 1 year 3 year 5 year 1 year 3 year 5 year 31/08/2015 31/08/2014 31/08/2012 31/08/2010 *Returns calculated on a
Slide 8: Strategic Initiatives: Capital Raise and ZDP Rollover
Strategic Initiatives: Capital Raise and ZDP Rollover
Slide 9: Capital Raise and Rollover of ZDPs
Capital Raise and Rollover of ZDPs Transaction Overview Successful completion, post period end, of initiatives designed to take advantage of a healthy investment pipeline and improve the efficiency of the Company’s balance sheet, including: Placing and Open Offer of Ordinary Shares: Total net pr
Slide 10: Capital Management
Capital Management • July 2014: US$65 million issuance of Convertible Unsecured Loan Stock (“CULS”) Balance Sheet US$ 000 US$ 000 due June 2021 (if not converted) Summary 31/08/15 28/02/15 • Provide more flexible capital structure, additional capital for investments and greater liquidity in Total As
Slide 11: Portfolio Review – Real Estate
Portfolio Review – Real Estate
Slide 12: Real estate
Real estate Strategy • Developing and repositioning retail, residential and office properties in Brooklyn and Miami • Strong demographics • Value-oriented prices in off-market, negotiated sales • Large value-added component Portfolio • Portfolio expected to contribute significant value in the future
Slide 13: Real estate – investment lifecycle
Real estate – investment lifecycle Identification • Identify undervalued and underutilized, off-market properties in prime locations in communities that are undergoing significant positive demographic changes Value Add • Reposition: • Vacate under-market units through lease workouts/expirations and
Slide 14: Real estate: portfolio by neighbourhood
Real estate: portfolio by neighbourhood 14
Slide 15: JZCP’s current real estate portfolio: Brooklyn, NY
JZCP’s current real estate portfolio: Brooklyn, NY What we’ve purchased: • Williamsburg: Epicenter of positive shifting demographics in North Brooklyn • 11 mixed-use properties, located on most trafficked retail corridors • 55,000 sq. ft. residential / 274,000 sq. ft. retail • Two development sites
Slide 16: Recent real estate acquisitions: Brooklyn, NY
Recent real estate acquisitions: Brooklyn, NY 192 585 & 547-553 Bedford Ave. Fulton St. Prime retail development site 4 properties totaling 85,000 featuring 6,000 sq. ft. of build buildable sq. ft. on our Fulton to suit multi-level retail on Mall Assemblage Williamsburg’s most highly Date Acquired:
Slide 17: Case study: Redbridge Bedford
Case study: Redbridge Bedford Original Thesis (Acquired April 2012) Value Add Redevelop and re-tenant commercial and • Transform building into two floors of retail residential spaces into a class A mixed use plus apartments property • Signed lease with AAA credit multi-national tenant for Bedford Av
Slide 18: JZCP’s current real estate portfolio: Miami, FL
JZCP’s current real estate portfolio: Miami, FL What we’ve purchased: • Wynwood: rapidly increasing retail rents amid a thriving arts scene • Top development site: 60,000 sq. ft. buildable • Cash flowing Class-A retail property with substantial air rights • Prime retail redevelopment site with subst
Slide 19: Real estate: portfolio by neighbourhood (Miami)
Real estate: portfolio by neighbourhood (Miami) Rising retail rents amidst thriving arts scene Vibrant shopping and cultural scene; home to world’s most prestigious brands 19
Slide 20: Recent real estate acquisitions: Miami, FL
Recent real estate acquisitions: Miami, FL 2501 21 45 NW 5th Ave. NE 39th St. NE 39th St. Prime retail re-development Highly visible property in Highly visible property in site in Miami’s Wynwood Miami’s Design District, Miami’s Design District, neighborhood adjacent to our other adjacent to our oth
Slide 21: Portfolio Review – Micro cap
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Slide 22: US micro cap
US micro cap Strategy: Verticals • Identify and purchase smaller businesses in “verticals” where an industry executive can add value via organic growth and cross company synergies • Sell “agglomerated” companies as one entity for a significant multiple expansion Strategy: Co-investments • Co-invest
Slide 23: US micro cap verticals
US micro cap verticals Industry sector driven “build-ups” created to add value through operational synergies across businesses and exit multiple expansion Industrial Healthcare Testing Services Revenue Cycle Water Services Solutions (ISS) Services Management Industrial Revenue cycle Environmental In
Slide 24: Significant US micro cap co-investments
Significant US micro cap co-investments Global Medical Imaging K2 Towers Sloan LED TierPoint Sells, repairs and One of the largest Designer and Provider of IT and installs new and private cell phone manufacturer of LED data centre colocation refurbished medical tower companies in lights and lighting
Slide 25: European micro cap
European micro cap First Close of Fund III • Our European team raised €237 million in the first round of fundraising for JZI Fund III, L.P. (“Fund III”), the successor fund to the EuroMicrocap Fund 2010, L.P. (“EMC 2010”) • JZCP has committed €75 million to Fund III, which will enable JZCP to contin
Slide 26: European micro cap
European micro cap JZCP invests in the European micro cap sector through its 75% ownership of EMC 2010 and its 32% ownership of Fund III. Main Investments: • Petrocorner: A strategic build-up to acquire 2-3% of Spain’s petrol station market (Annualized HY15 Revenue €95.4m, Annualized HY15 EBITDA €6.
Slide 27: Recent European micro cap acquisitions
Recent European micro cap acquisitions Fincontinuo S.A.C Collingwood* A leading independent Operational van leasing (lease & Niche auto insurer in the UK, distribution, servicing and service) company in Denmark, specialising in taxi and learner lending platform for salary specialized in larger engin
Slide 28: Portfolio Review – Spruceview
Portfolio Review – Spruceview
Slide 29: Spruceview Capital Partners
Spruceview Capital Partners Background • Recently established asset management business • Experienced management team led by Richard Sabo, former Chief Investment Officer of Global Pension and Retirement Plans at JPMorgan • In July 2014, the Bright Spruce Fund, LP was launched with a US$50 million i
Slide 30: Summary & Outlook
Summary & Outlook Long-term track record of NAV Positive outlook - sustained global growth recovery taking place More capital to put to work to add to increasingly diversified portfolio Enhanced growth prospects through completed Strategic Initiatives ZDP rollover improves the efficiency of th
Slide 31: Appendix
Appendix JZ CAPITAL PARTNERS LIMITED
Slide 32: About us
About us JZ Capital Partners Limited is one of the oldest closed-end investment companies listed on the Specialist Fund Market of the London Stock Exchange Approximately US$1.0 billion of gross assets Principally invests in US and European micro cap companies and US real estate Guernsey resi
Slide 33: JZCP investment activity
JZCP investment activity Since February 28, 2015 ($ millions) Jordan Healthcare Products 12.5 ROI & Avectus 19.6 K2 Towers 22.0 Sloan LED 4.9 S.A.C 5.2 Fincontinuo 4.5 547-553 Fulton St. 11.2 21 NE 39th St. 8.9 2501 NW 5th Ave. 5.0 192 Bedford Ave. 5.8 Others 24.7 Total* 124.3 *Numbers subject to ro
Slide 34: JZCP realisation activity
JZCP realisation activity Gross Proceeds Since February 28, 2015 ($ millions) Southern Petroleum Laboratories 1.3 Healthcare Revenue Cycle Management Vertical Refinancing 15.9 Salter Labs 3.4 Driggs Ave. Refinancing** 4.6 Others 4.7 Total* 29.9 *Numbers subject to rounding; ** Proceeds returned 34 t
Slide 35: Top 10 major holdings
Top 10 major holdings Value ($ 000) Company Type (31/8/2015) % of net assets Industrial Services Solutions US micro cap 84,271 12.1 Factor Energia European micro cap 70,682 10.2 Fulton Real estate 54,244 7.8 Bright Spruce Fund Other 48,880 7.0 Greenpoint Real estate 47,392 6.8 Toro Finance European