Westwood Holdings Group Inc · NYSE:WHG
Westwood — Investor Presentation (March 2013)
41 slides from Westwood's investor presentation, Mar 11, 2013
Slide 1: March 2013 Investor Presentation
Westwood Holdings Group, Inc. March 2013 Investor Presentation Brian O. Casey President & Chief Executive Officer Mark A. Wallace Chief Financial Officer Bill Hardcastle Vice President Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward – Looking Statements Statements in this presentation that are not purely historical facts, including statements about our expected future financial position, preliminary estimates, results of operations or cash flows, as well as other statements including words such as “anticipate,” “believe
Slide 3: Agenda
Agenda I. Firm Overview II. Growth Opportunities III. Financial Highlights IV. Equity Based Compensation V. Summary
Slide 4: Westwood at a Glance
1 Firm Overview Financial Profile Westwood at a Glance • Asset management firm focused on Value & Income, Global & Emerging Markets strategies • Serving institutional, private client and mutual fund investors since 1983 • Publicly traded since 2002 (NYSE : WHG) as of February 28, 2013 • 2012 Revenue
Slide 5: Organization & Product Distribution
Institutional Mutual Funds Westwood Management Westwood Holdings Group, Inc. Private Wealth Westwood International Westwood Trust Westwood Funds 2 Organization & Product Distribution • Targeted consultant relationships • Subadvisory partners • Plan sponsor direct marketing • Client referrals • Third
Slide 6: Domestic Equity Strategies and Total Firm AUM
Domestic Equity Strategies SmallCap Value 1/1/04 SMidCap Value * 1/1/02 (closed) SMidCap Value Plus+ 7/1/10 LargeCap Value 1/1/87 AllCap Value 7/1/02 Dividend Growth 11/1/93 Total Firm Assets Under Management as of 12/31/12: $14.2B Specialized Strategies Income Opportunity 1/1/03 LargeCap Value – So
Slide 7: Strategy performance net of fees
Net of Fees 10.8% 12.8% 17.1% 8.9% 7.5% 9.2% 9.1% 4 *Due to capacity constraints, this product closed to new investors effective October 1, 2009. Performance provided reflects the institutional track record which started January 1, 2002. In 2001, Westwood transitioned a midcap core equity strategy t
Slide 8: Portfolio Attributes
Emerging Markets Emerging Markets Plus Global Dividend Global Equity Target number of holdings Positions at initiation Initial universe Minimum Market capitalization (USD) Liquidity (most recent 100 days - USD) Capacity (USD) Prospective Client Reserved Capacity Remaining Capacity 5 Portfolio Attrib
Slide 9: Growth Opportunities
6 Growth Opportunities • Significant capacity remains in seasoned products - Opportunity for substantial operating leverage • Subadvisory mandates - Access to broad distribution infrastructure & global markets - Support partner distribution network vs. building proprietary distribution network • Wes
Slide 10: Significant Product Capacity For Future Growth
Seasoned Products (>3 year track record & >$100 Million in assets) Assets Under Management As of 12/31/12 Estimated Maximum Capacity AUM Asset Growth Potential Product Inception New & Unseasoned (R&D) & Legacy Products 7 Growth Opportunities Significant Product Capacity For Future Growth LargeCap Va
Slide 11: Growth Opportunities: Sub-Advisory Brands
8 Growth Opportunities Sub-Advisory Brands • Access to established distribution channels • Generally lower average fee, but high profitability due to low incremental costs
Slide 12: Growth Opportunities – Westwood Funds
Domestic Value & Income Strategies LargeCap Value WHGLX SMidCap WHGMX SMidCap Plus+ WHGPX SmallCap Value WHGSX Dividend Growth WHGDX Income Opportunity WHGIX Short Duration High Yield WHGHX International Strategies Emerging Markets WWEMX Global Dividend WWGDX Global Equity WWGEX 9 Growth Opportuniti
Slide 13: Substantial Proportion of 4 & 5 Star Rated Funds
10 Growth Opportunities – Westwood Funds Substantial Proportion of 4 & 5 Star Rated Funds Proportion of Assets Rated Four or Five Star by Morningstar (Asset Weighted) Source: JPMorgan U.S. Asset Managers – North America Equity Research dated February14 ,2013; Strategic Insight. Westwood Funds AUM as
Slide 14: Westwood Trust – Private Wealth
11 Enhanced Balanced Trust Services Continuity of Leadership Comprehensive Allocation Strategy Westwood Trust – Private Wealth Focused on Organic Growth and Selective Acquisitions • Low cost, efficient solution • Asset gathering platform • “Best Ideas” • Consultative approach For the period from 1/1
Slide 15: Westwood International Advisors Investment Team
Team Members ¹ Sector Coverage Industry Experience 12 Team members are listed from left to right as shown in picture above. Westwood International Advisors Investment Team Global Team with Impressive Track Record Patricia Perez-Coutts, CFA – Senior Vice President, Portfolio Manager Lead Portfolio Ma
Slide 16: Growth Opportunities: Westwood International Advisors
13 Diversity Experience Investment Approach Growth Opportunities Westwood International Advisors • Internationally diverse team – 10 languages spoken fluently • Collectively lived or worked in 10 countries • Global research coverage of all GICS sectors – developed and emerging economies • Average 18
Slide 17: Total Return Since 2002 WHG Spin-off
14 Total Return Since 2002 WHG Spin-off Data as of 12/31/12 Track Record of Shareholder Value Creation
Slide 18: 2012 Highlights
Assets Under Management Investment Strategies Operating Results Capital Management 15 2012 Highlights • AUM increased 8% to $14.2 billion • Average asset based fee increased from 53 bps to 55 bps • Income Opportunity strategy, with its focus on current income and lower volatility, experienced high d
Slide 19: Growth in Assets Under Management
16 Growth in Assets Under Management
Slide 20: Average Asset-Based Fees
17 Average Asset-Based Fees Note: excludes impact of performance-based fees Westwood Average Asset-Based Fee
Slide 21: Quarterly Revenue Growth – Trailing Five Years
18 Quarterly Revenue Growth – Trailing Five Years Excluding performance-based fees
Slide 22: Attractive Dividend Returns
19 Attractive Dividend Returns $91 Million of Dividends Declared Since Becoming Public *Data as of 12/31/12, excludes special dividends
Slide 23: Shareholder Value Creation
20 Shareholder Value Creation WHG vs. S&P 500 Market Capitalization WHG Market Capitalization
Slide 24: Equity Based Compensation
21 Equity Based Compensation
Slide 25: Share Award Plan
Share Award Plan 22 • Annual Cash Performance Awards funded into an Employee Benefit Trust • RBC as Trustee invests funds in WHG common stock • WHG common stock acquired in open market transactions by the Trust • Stock held in trust until employee vests in the Award • Awards cliff vest 3 years after
Slide 26: Equity Based Compensation: Restricted Share Grants
23 • Granted 188,124 restricted shares in February 2013 • 291,079 shares currently available for future grants • Proposal to increase shares available for future grants by 500,000 • Total represents 4 years based on 2013 grant levels Equity Based Compensation
Slide 27: Strategic Priorities
24 Improve Performance & Fill Capacity Sub-Advisory Mandates Westwood Funds Expand Private Wealth Platforms Westwood International Advisors Strategic Priorities • Focus on Improving LargeCap and SMidCap performance • Broaden Institutional Sales • Fill remaining capacity of existing products • Cultiv
Slide 28: www.westwoodgroup.com
www.westwoodgroup.com 200 Crescent Court Suite 1200 Dallas, Texas 75201 T. 214.756.6900 * * * * * * * * * * * * * * * * *
Slide 29: Economic Earnings Reconciliation
Economic Earnings Reconciliation Economic Earnings Reconciliation ($ thousands) 2007 2008 2009 2010 2011 2012 GAAP net income $ 7,944 $ 10,543 $ 7,895 $ 11,280 $ 14,686 $ 12,090 Add: Restricted stock expense 5,316 6,735 7,666 9,269 9,969 10,515 Add: Intangible amortization - - Add: Tax benefit from
Slide 30: Westwood LargeCap Value Disclosure Information
WwW WESTWOOD LargeCap Value Disclosure Information pee ee et an ee HE —_—_ Mmm tec San on et se cin ean Cg Stan agen N08 ‘Sibu nib Corman tbe apes oon Ser Sunn Ovi ser east asin Da ay conga an cea Pe 8 Veins {attecean Soe anos Testa rns eee eo Fes Seta Sta ewer Laniio Eitri 8 072 en et rar. eee ante
Slide 31: Westwood SMidCap Value Disclosure Information
WwW WESTWOOD SMidCap Value Disclosure Information* PERFORMANCE RESULTS: SMIOCAP COMPOSITE “My suntan 3 ssnccar cou fee eee Ramet Ramet Numer ot Oe tye Vala atest aitim Fim ee) Se ER ate oer see et as i iy RT ag te we Sek fee tie ase cS me ig SS GE pete tm fm Sm 8 Bi oook Rae ‘cree BS RE gs Gs Campou
Slide 32: Westwood SMidCap Plus+ Disclosure Information
Ww] WESTWOOD SMidCap Plus+ Disclosure Information PERFORMANCE RESULTS: SMIDCAP PLUS* COMPOSITE iy Bota nce 02 sis ” sonscan rive: SS a Se oe oe ee COMPOSITE RETURNS _ Year Ret Vatoe Pordoin Dipersion StOev stew yd Russell Russell og ee : es 2 = oe Gromor Nato 2500 Map 2010' 306% 315% 258% + 00 oe si
Slide 33: Westwood SmallCap Value Disclosure Information
WwW WESTWOOD’ SmallCap Value Disclosure Information PERFORMANCE RESULTS: SMALLCAP VALUE COMPOSITE na 1 Wo On 1 22 epong crecy us tn ats 308 SMALLCAP VALUE (COMPOSITE RETURNS cites een mt trot Stead "eFim” Taal Fen See Seti _ Rawal Year ets Retim_2080Vslve Polos person ‘rod tae" hanut Fous Foes 2000
Slide 34: Westwood AllCap Value Disclosure Information
M4 WESTWOOD! AllCap Value Disclosure Information 120) 208 teu Dene 31,212 is i orem sr tana ya Grom Water coms hasan come COMPOSITE RETURNS _ SM cane arena: SCS” a tt SR Soeeeh etor so ee. Sn ae meres fa Sane eae eer isis ant 0 va a a a Se Beak oh am fg ae ee Oe tre wom Mom 10% Be ae oe io tes as ak
Slide 35: Westwood Income Opportunity Disclosure Information
M4 WESTWOOD) Income Opportunity Disclosure Information an a com tate eye mime npn Se ck ia ie eantnae | = fe 22 ie cea Bay Nes Tk foe ek Me ae Sel] Ges ee Se cr Sie] Frees ry ars ee us Su) tos Begs gs Le wee Dyer We Be BR ne us Stas eon 08 irs ne us estyuncoer nary tte teensy ers word estes adeno ee
Slide 36: Westwood Core Fixed Income Disclosure Information
M4 WESTWOOD! Core Fixed Income Disclosure Information PERFCRMANCE RESULTS: FIXED INCOME COMPOSITE = rox non a Ogee ian eee Pepe sonore ners Br Te tiey ‘CALENDAR YEARS ros tee Hans] 50% Ea so faens s0% pa btn oan cima ee apr Sano Re RO ae een erent anon netinal es eee nee Sem Oi Se Scar aacone on att
Slide 37: Westwood Balanced Disclosure Information
M4 WESTWOOD! Balanced Disclosure Information PERFCRMANCE RESULTS: BALANCED COMPOSITE. Sew 1 01 gh Drone 2012 - Se roe ee orem ree Gee ares ‘Conon sgn: npn ane wear are Repay SSOP Heap a8 snare cia uy ona bon Puen cnn recat a oy wT ‘encima the aon tpn bts oka SAPD wo wt sl Ben GoanmerCnst ne 90G) YS
Slide 38: Westwood Emerging Markets Disclosure Information
M4 WESTWOOD Emerging Markets Disclosure Information PERFORMANCE RESULTS: EMERGING MARKETS _ wae N RRM DOM. aoe EMERGING MARKETS [COMPOSITE RETURNS Grostot Net of Compete Benchnark Teal Asset Porenntane Fees Fees. MSCIEmorging umber of By SW atendot affirm” Toal Fim ‘Year Rew _foturm Martetsiniox Por
Slide 39: Westwood Emerging Markets Plus Disclosure Information
M4 WESTWOOD’ Emerging Markets Plus Disclosure Information PERFORMANCE RESULTS: EMERGING MARKETS PLUS, “hy 10 Rrouvecente 1 22 [EMERGING MARKETS PLUS Fepoting Gurney: USO ‘ration Date: iy 20°2 [COMPOSITE RETURNS. Sfees eee MSCI Emerging Number of ayn "lenaal stim ett Fm sc est_natum_vetun ‘uses oWtos
Slide 40: Westwood Global Equity Disclosure Information
M4 WESTWOOD Global Equity Disclosure Information PERFORNANCE RESULTS: GLOBAL EQUITY “Ay 1 202 og Oncor 3, 20% gery ay USD omen 38 212 amen Seen roe rumder of ie ere “atendot im You rim —_SOMPOSITE RETURNS _ Your Return Roture _MSCIAONI Portfolios Ospersion $tDev __SiDev _ Period _Assots_Assots. ‘Gro
Slide 41: Westwood Global Dividend Disclosure Information
M4 WESTWOOD! Global Dividend Disclosure Information PERFORMANCE RESULTS: GLOBAL DIVIDEND i 1,202 eg December 3,202 ton ty 2072 GLOBAL DIVIDEND ‘Cempostn Srichmat Tob Amats Porentage COMPOSITE RETURNS Number of Bie ane atendt af Fin Teal Fim Goma Natal ‘Year_fatsin_ Return _MSCIACM _Portoles Cspersio
Westwood Holdings Group — Investor Presentation (March 2013) on 6ix