Polar Capital Holdings Plc · LSE:POLR
Polar Capital — FY2009 Earnings Presentation
20 slides from Polar Capital's earnings presentation, June 2009
Slide 1: Results Presentation for Year Ending 31 March 2009
POLAR CAPITAL HOLDINGS PLC Results Presentation For Year Ending 31 March 2009 Mark Kary (CEO) John Mansell (COO) June 2009
Slide 2: Table of Contents
Table of Contents Section I Business Review Section II Financial Review POLAR CAPITAL HOLDINGS PLC 1
Slide 3: Business Review
BUSINESS REVIEW POLAR CAPITAL HOLDINGS PLC 2
Slide 4: Analysis of Assets Under Management
Analysis of Assets Under Management AuM split by strategy (31 May 2009) Investor Mix (by Geography) $1.5bn $1.5bn US 26% Hedge Funds 44% UK (incl. CI) 45% N. America (ex. US) Long Onl y 3% 56% RoW 1% Europe 25% AuM split by business unit (31 May 2009) Investor Mix (274 clients) Healthcare 2% $1.5bn
Slide 5: A Challenging 2008/09 for AUM
A Challenging 2008/09 for AUM Polar had a challenging year in 2008/2009 in terms of AUM movements. Overall AUM fell by 2008 Presented Polar With a Number of Challenges $1.5bn primarily as a result of: 3500 $3,143m -$484m The closure of the Global Opportunities / 3000 Paragon fund. This fund was cl
Slide 6: Fund Performance
Fund Performance Fund Fund Size Launch Performance Performance Volatility Index 31 May 2009 Date Calendar 2008 YTD* YTD* YTD* $m Hedge Funds UK** 113 Nov 2001 5.98% 8.48% 15.4 MSCI Europe 4.70% European Conviction 137 Mar 2006 12.78% 6.23% 11.4 FTSE 100 -0.36% European Forager 179 Aug 2003 -12.24% 9
Slide 7: Corporate Infrastructure
Corporate Infrastructure Prior to Joining Polar Capital, Karim was Joined Polar as CEO in 2005 head of Risk Management of the Global Proprietary Trading business at Credit 23 years of experience in the investment Karim Vellani Suisse management sector Chief Risk Officer 18 years experience i
Slide 8: Issues Raised From Analysts' Feedback
Issues Raised From Analysts’ Feedback Why did Julian Barnett resign and what have been the knock-on effects to the business? Given the strength of the balance sheet, what is our strategy for growth? Is the hedge fund industry recovering and what is the impact of increased regulation? How is
Slide 9: Hedge Fund Industry Contraction
Hedge Fund Industry Contraction Including all redemptions notified in Q408, we believe hedge fund AUM fell ~40% to ~$1.2trn 2500 2000 1,930 390 1,870 340 1500 1,460 $m 1,200 1,110 1000 970 Bull 1,200 820 625 540 Base 950 500 Bear 500 0 08 08 s 01 02 03 04 05 06 07 e e w 09 c H1 H2 20 20 20 20 20 20
Slide 10: Current Thoughts on the Hedge Fund Industry
Current Thoughts on the Hedge Fund Industry We would be very surprised if the industry did not rebuild. Survivors will be those who delivered what was ‘on the tin’, those who achieved ‘absolute returns’, and those who have operated with integrity From an asset allocation perspective, the need fo
Slide 11: The Increasing Importance of Absolute Return
The increasing importance of Absolute Return 220 Polar Capital UK Fund Ltd 200 FTSE All-Share Index 180 FTSE 100 Index 160 140 120 100 80 60 01 02 02 05 06 02 03 03 03 04 04 04 05 05 06 06 07 07 07 08 08 08 09 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 7/ 1/ 1/ 3/ 7/ 3/ 1/
Slide 12: Polar's Competitive Positioning
Polar’s Competitive Positioning Highly differentiated performance of funds Significant shrinkage in number of competing funds Incentivisation in place with funds at/near high water marks Renewed investor appetite for ‘fundamental research driven’ approach, transparency and less esoteric stra
Slide 13: Financial Review
FINANCIAL REVIEW POLAR CAPITAL HOLDINGS PLC 12
Slide 14: Financial Review: Highlights
Financial Review Highlights AUM − AUM at 31 March 2009 down 52% to $1.5bn (2008: $3.1bn) Profitability − Pre-tax (pre SBP) profitability down 30% to £11.1m (2008: £15.7m) − Pre-tax (post SBP) profitability down 17% to £12.1m (2008: £14.5m) EPS and Dividend − Adjusted diluted EPS down to 9.9p (
Slide 15: Financial Review: Revenues
Financial Review Revenues Management Fees Performance Fees 35 30.3 30 26.5 25 22.5 21.1 20.6 20.1 20 £ million 15 10 5 0 To March 2007 To March 2008 To March 2009 POLAR CAPITAL HOLDINGS PLC 14
Slide 16: Financial Review: Costs
Financial Review Costs 2007 2008 2009 4.5% decrease in pre- £m £m £m performance fee compensation Salaries and bonuses 7.5 8.1 7.7 £8.4m increase in performance fee interests Core distributions 2.3 2.2 2.2 accounts for overall £7.9m Other staff costs 0.7 0.9 0.8 increase in total compensation co
Slide 17: Financial Review: Profitability and Margin
Financial Review Profitability and Margin 2007 2008 2009 £m £m £m Core operating profit fell by £4.7m as: Core operating profit 2.8 6.0 1.3 Revenues decreased (£4.0m) Hedging loss (£1.9m) Performance fee profit 8.0 8.0 8.9 Loss on investments (£0.8m) Interest and similar income 0.9 1.7 0.9 Reduction
Slide 18: Financial Review: Dividend
Financial Review Dividend Current Dividend Policy Final dividend of 3.5p making 4.5p for the year (2008: 8.5p). At 4.5p dividend covered 220% by earnings (2008: 170% pre SBP charge). At 4.5p: 50% of core profits distributed and 44% of performance fee profits (2008: 50% and 62% respectively). P
Slide 19: Summary
Summary Well positioned in challenging times Attractive Balanced mix of hedge funds and long only funds Products Complementary range of products by sector specialisation, geographical focus and asset class that would appeal to a wide base of investors Strong Consistent and impressive bull and
Slide 20: Polar Capital Disclaimer
Polar Capital Disclaimer 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 presentation is for the sole use of those atte
Polar Capital Holdings — FY2009 Earnings Presentation on 6ix