Polar Capital Holdings Plc · LSE:POLR
Polar Capital — H1 FY2018 Earnings Presentation
27 slides from Polar Capital's earnings presentation, Dec 11, 2017
Slide 1: Results Presentation – Six months to 30 September 2017
Results Presentation Six months to 30 September 2017 Gavin Rochussen, Chief Executive Officer John Mansell, Chief Operating Officer 11 December 2017 This presentation is for one-on-one use with non-US professional investors only www.polarcapital.co.uk 04/01/2018
Slide 2: Contents
Results Presentation – Six Months To 29 September 2017 Contents • Highlights • Fund Flows and AuM • Fund Performance • Strategy • Financials • Summary and Outlook For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 2
Slide 3: Polar Capital is a specialist, investment led, active fund manager
“Polar Capital is a specialist, investment led, active fund manager with a collegiate and meritocratic culture where capacity of investment strategies is managed to enhance and protect performance”. For non-US professional investor use only. Please refer to the Important Information at the end of th
Slide 4: Market Perspective
Market Perspective Global indices vs volatility 35% 30% 25% 20% 15% 10% 5% 0% -5% MSCI North America Index MSCI All-Country World Index TOPIX MSCI Emerging Market Index DJ World Technology Index FTSE All-Share Index S&P 500 30d Volatility Source: Bloomberg, as at 29 September 2017. For non-US profes
Slide 5: Highlights
Results Presentation – Six Months To 29 September 2017 Highlights • Net inflows of £820m compared to £542m in the preceding six months • AuM increased by 14% from £9.3bn to £10.6bn • Average AuM up 34% on the comparable prior period • Improved performance in key fund strategies • Core Operating Prof
Slide 6: Fund Flows And AuM – AuM progression over years
Fund Flows And AuM AuM progression over 5 years £ Billion 12.0 11.0 £10.6bn 10.0 £9.3bn 9.0 £8.3bn £8.32bn £7.9bn £7.7bn 8.0 £7.3bn £7.0bn £7.2bn 7.0 6.0 £4.7bn 5.0 4.0 £3.2bn £3.3bn £2.8bn £3.1bn £3.1bn 3.0 £2.3bn £1.8bn 2.0 £1.4bn £1.4bn £0.79bn £0.8bn £0.9bn £0.7bn £0.7bn 1.0 0.0 -1.0 -2.0 £ Flow
Slide 7: Fund Flows And AuM – Quarterly net flows over years
Fund Flows And AuM Quarterly net flows over 5 years £1,300,000,000 £1,100,000,000 £900,000,000 £700,000,000 £500,000,000 £300,000,000 £100,000,000 -£100,000,000 -£300,000,000 -£500,000,000 -£700,000,000 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4 Source: Polar Capital, 29 September 2017. Totals may not sum
Slide 8: Gross & net flows for the months to September 2017
Fund Flows And AuM Gross & net flows for the 12 months to 29 September 2017 £600,000,000 £500,000,000 £400,000,000 £300,000,000 £200,000,000 £100,000,000 £0 -£100,000,000 -£200,000,000 -£300,000,000 -£400,000,000 Redemptions Subscriptions Net Source: Polar Capital, 29 September 2017. Totals may not
Slide 9: Strategy fund flows
Fund Flows And AuM Strategy fund flows 12 months and 6 months to 29 September 2017 £500,000,000 £400,000,000 £300,000,000 £200,000,000 £100,000,000 £0 -£100,000,000 -£200,000,000 -£300,000,000 -£400,000,000 -£500,000,000 12 months 6 months Source: Polar Capital, 29 September 2017. Totals may not sum
Slide 10: AuM growth per strategy
Fund Flows And AuM AuM growth per strategy £3,000,000,000 £2,500,000,000 £2,000,000,000 £1,500,000,000 £1,000,000,000 £500,000,000 £0 2015 2016 2017 Source: Polar Capital, 29 September 2017. Totals may not sum due to rounding. For non-US professional investor use only. Please refer to the Important
Slide 11: AuM Analysis
AuM Analysis AuM split Investor mix by geography Long only 91.0% UK 70.1% Alternative 9.0% Europe 26.6% Investment Trusts 18.7% Other 2.2% Open Ended Funds 81.3% USA 1.1% AuM split by strategy Investor mix by holdings Technology 24.6% Bank 23.6% North American 17.2% Polar Investment Trusts 18.7% Hea
Slide 12: Current Position – Lipper fund rankings
Current Position Lipper figures for long and alternative UCITS funds – as at 29 Sep 2017 6 Months 1 Year 3 Years 5 Years Since AuM £m Percentile Percentile Percentile Percentile Inception 7* Japan Fund (I JPY) 741 24 6 26 41 19/10/2001 33 Japan Alpha Fund (S JPY) 54 49 16 37 N/A 31/10/2012 5* Health
Slide 13: Alternative Strategies
Alternative Strategies As at 29 September 2017 Annualised returns Strategies Inception date YTD 3 years 5 years Inception Europe Long/Short (AX EUR) 1 August 2003 6.49% -0.76% 3.63% 8.62% UK Absolute Equity (GBP I) 29 September 2014 31.93% 22.87% N/A 22.85% Global Convertible 31 December 2015 3.90%
Slide 14: Annualised fund performance against benchmark
Fund Flows And AuM Annualised fund performance against benchmark (3yr/5yr/SI) % 25 1st Quartile First bar = 3yr, second bar = 5yr & third bar = since inception 2nd Quartile 3rd Quartile 10 4th Quartile Ranking 8 unavailable 6 4 2 0 -2 -4 -6 * Source: Polar Capital, 29 September 2017. Totals may not
Slide 15: Current Position – Managing capacity
Current Position Managing capacity Polar Capacity in £ (29 September 2017) Healthcare Trust Financials Trust Biotech Q1 / Q1 Europe L/S Japan Value Q2 / Q2 Tech A&AI Income Opportunities Q1 / Q1 Global Convertible Q1 / Q1 GEM Income Q4 / Q1 UK Absolute Equity Q1 / Q1 Japan Q2 / Q1 UK Value Opportuni
Slide 16: Growth and diversification
Strategy Growth and diversification Investment strategies: Distribution • Add complementary Global/International equities capability • Focus on building the institutional channel that will appeal to institutional investors – This will follow, or progress in tandem with, the addition – This could inc
Slide 17: Financials
Financials For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 17
Slide 18: Financial Review – Highlights
Financial Review Highlights • AuM – AuM at 29 September 2017 £10.6bn from £9.3bn at 31 March 2017 • Profitability – Pre-tax (post SBP) profits £11.8m (2016: £8.5m) – Core operating profit excluding performance fees £12.0m (2016: £8.7m) • EPS and Dividend – Adjusted diluted EPS 11.78p (2016: 8.15p)1
Slide 19: Financial Review – Profitability by period
Financial Review Profitability – by period 6 Months 6 Months Year 6 Months to September 16 to March 17 to March 17 to September 17 Average AuM £7.4bn £8.3bn £8.0bn £9.9bn Core operating profit pre LTIPS £9.2m £12.6m £21.8m £13.3m LTIPS & share options £0.5m £0.4m £0.9m £1.3m Core operating profit po
Slide 20: Financial Review – Costs
Financial Review Costs 6 Months 6 Months Year 6 Months to September 16 to March 17 to March 17 to September 17 Salaries and bonuses £8.4m £8.5m £16.9m £9.6m Core distributions £7.1m £7.7m £14.8m £11.0m Core compensation costs £15.5m £16.2m £31.7m £20.6m NIC on options - £(0.6)m £(0.6)m £1.0m Other o
Slide 21: Financial Review – Other operating costs
Financial Review Other operating costs 6 Months 6 Months Year 6 Months to September 16 to March 17 to March 17 to September 17 IT £2.3 m £2.4 m £4.7 m £2.5 m Rent & rates £1.3 m £1.3 m £2.6 m £1.3 m Professional fees £0.5 m £0.5 m £1.0 m £0.6 m Insurance & regulation £0.3 m £0.2 m £0.5 m £0.2 m Trav
Slide 22: Financial Review – Cash and investments
Financial Review Cash and investments September 2016 March 2017 September 2017 £m £m £m Cash £32.2m £58.5m £49.9m Available for sale investments Alternative fund seed £16.7m £9.5m £9.0m Long only seed £22.9m £12.6m £13.3m £39.6m £22.1m £22.3m Total cash and investments £71.8m £80.6m £72.2m Source: P
Slide 23: Regulation And Accounting
Regulation And Accounting • MiFID II – Polar’s managers are competing in a global market – Polar Capital commits to take the cost of all core waterfront written research onto its P&L account – For certain strategies where the consumption of specialist research is regarded as critical and additive to
Slide 24: Shareholder analysis at September 2017
Financial Review Shareholder analysis at 29 September 2017 Holding Percentage Directors, founders and staff 26.0m 29% Caledonia 7.5m 8% EBT 1.9m 2% Hargreave Hale 9.3m 10% Harwood Capital 7.0m 8% Blackrock 3.7m 4% Unicorn 3.4m 4% Artemis 2.8m 3% Free Float = 61% JO Hambro 2.3m 2% Aberdeen Standard L
Slide 25: Summary And Outlook
Summary And Outlook • Four quarters of net inflows • More balanced earnings contribution from fund strategies • More to be achieved on diversification • Performance has been good and is holding up, although performance fees remain volatile • Flow momentum has continued into the current quarter • Cos
Slide 26: Thank you Questions?
Thank you Questions? For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 26
Slide 27: 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 pr
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