Virtus Investment Partners, Inc. · NYSE:VRTS
Virtus Investment Partners — Morgan Stanley Financials Conference 2014
23 slides from Virtus Investment Partners's conference presentation, Jun 11, 2014
Slide 1: Morgan Stanley Financials Conference
Morgan Stanley Financials Conference June 11, 2014 George R. Aylward President and Chief Executive Officer
Slide 2: Important Disclosures
Important Disclosures This presentation contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The Private Secur
Slide 3: Agenda
Agenda Overview Value Proposition Financial Results Capital Position and Strategy Growth Opportunities Page 3
Slide 4: Firm Overview
Firm Overview Assets Under Management Independent publicly traded asset manager Manages $58.0¹ billion in a multi-boutique structure: – Offerings from specialized boutique managers – Distinct investment styles, approaches and brands – Wide range of investment disciplines Investment strategies
Slide 5: Value Proposition
Value Proposition Multi-strategy asset manager Flexible Multi- Flexible model attractive to managers Boutique Model Shared distribution and support services Well-diversified portfolio of differentiated strategies Diverse, High Quality Disciplined product oversight and development Product O
Slide 6: Differentiated Strategies from Boutique Managers
Differentiated Strategies from Boutique Managers Equity Fixed Income Alternatives Domestic Int’l Emerging Domestic Global Single-Strat Multi-Strat Managers Affiliated Subadvisers Select Page 6
Slide 7: Diverse Product Offerings
Diverse Product Offerings Assets under management are diversified across product type and asset class AUM by Product Type AUM by Asset Class Other1 Institutional Money $2.2 International Alternative $4.5 Market Equity $5.7 $1.4 $10.4 Managed 2% 4% Accounts 8% 10% $6.8 18% Variable 12% Insurance Fund
Slide 8: Multi-Channel Distribution
Multi-Channel Distribution Distribution approach tailored to individual channels Channels Approach Wirehouse Broad penetration and relationships with all national and regional firms Support national and regional firms with dedicated sales team Independent/RIA Area of emerging growth in fastest
Slide 9: Differentiated Retail Distribution
Differentiated Retail Distribution Strategy, team and approach distinguishes us in the competitive retail market Strategy Broad, one-point access to boutique managers Experienced and high-quality sales force Industry- Team − Significant industry experience and tenure Leading − Effective communic
Slide 10: Highly Effective Sales Efforts
Highly Effective Sales Efforts Diverse offerings, differentiated approach have led to consistent industry-leading flows Gross Sales1 Net Flows1 $19.1 $12.3 $9.5 $8.1 $6.4 $4.5 $5.1 $2.8 $1.7 $0.5 2009 2010 2011 2012 2013 GROWTH METRICS Sales Rate3 41.1% 50.9% 80.3% 73.0% 73.9% Net Flow Rate3 7.8% 18
Slide 11: Balanced Retail Sales
Balanced Retail Sales Diverse sales across multiple strategies and asset classes Mutual Fund Gross Sales Fixed Income Domestic Equity International Equity Alternative 2009 2010 2011 2012 2013 8% 7% 12% 17% 4% 32% 28% 34% 20% 22% 36% 11% 49% 49% 24% 23% 21% 26% 41% 36% $2.8 $4.5 $9.5 $12.3 $19.1 KEY
Slide 12: Strong Top-Line Growth
Strong Top-Line Growth Growth in fee revenue reflects strong net inflows and higher-fee products Avg. AUM 0.60% $60.0 Inv. Mgmt. 0.49% Fees/Avg. AUM 0.50% 0.47% $50.0 0.41% 0.40% 0.37% $40.0 0.34% 0.30% $30.0 $53.0 0.20% $39.6 $20.0 $33.0 $26.5 $23.2 0.10% $10.0 0.00% $0.0 2009 2010 2011 2012 2013 A
Slide 13: Leveragable and Variable Structure
Leveragable and Variable Structure Inherently leveragable business with efficient cost structure Revenues, as adjusted $291.4 Expenses, as adjusted $211.6 $155.1 $160.4 $130.2 $111.4 $111.5 $87.2 $80.2 $89.6 2009 2010 2011 2012 2013 KEY METRICS Average AUM ($ BN) $23.2 $26.5 $33.0 $39.6 $53.0 Employ
Slide 14: Strong Earnings Growth
Strong Earnings Growth Asset growth within leveragable and variable structure has driven consistently strong earnings Operating Income, as adjusted $131.0 $81.5 $43.7 $21.7 $7.0 2009 2010 2011 2012 2013 KEY METRICS Margin 8.0% 19.5% 28.2% 38.5% 44.9% Capture Ratio2 N/A 61% 50% 67% 62% $ Millions 1CA
Slide 15: Capital Position
Capital Position Strong capital position provides flexibility to protect and invest in business and return capital $398.4 Cash Investments1 $118.9 $54.2 $60.3 $38.1 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 KEY METRICS Cash and Inv. per share2 $5.05 $7.13 $8.00 $15.19 $43.75 Working Capital $22.3
Slide 16: Capital Strategy
Capital Strategy Capital allocation balanced between investing in business and return to shareholders Represents operating liquidity of the business Working Capital Maintain appropriate levels to support and protect business Facilitates product introduction and distribution access Seed Capital
Slide 17: Multiple Opportunities for Sustained Growth
Multiple Opportunities for Sustained Growth Our model and strategy offer significant growth opportunities Areas Growth Opportunities Product Leverage capabilities of affiliated managers – Introduce new strategies from existing teams Offer existing strategies in new product structures – Develop pro
Slide 18: Demonstrated Success with Product Introductions
Demonstrated Success with Product Introductions Attractive strategies and effective retail distribution have driven strong new product sales Gross Sales $11.8 AUM $6.0 $5.1 $3.2 $3.4 $2.5 $0.8 $1.0 $0.1 $0.3 2009 2010 2011 2012 2013 KEY METRICS – NEW FUNDS1 % of All Funds Gross Sales 4.7% 18.1% 33.3
Slide 19: Opportunity with Alternatives Strategies
Opportunity with Alternatives Strategies Well-positioned to deliver attractive solutions in growing area of liquid alternatives Retail clients should incorporate non-correlated assets to evolve their Client Need asset allocation beyond the traditional stock/bond/cash mix Traditional alternatives
Slide 20: Virtus Value Proposition
Virtus Value Proposition Flexible Multi-Boutique Model Diverse, High Quality Product Offerings Differentiated Distribution Capabilities Attractive Financial Model and Earnings Profile Multiple Opportunities for Growth Page 20
Slide 21: Appendix
“INVESTMENT PARTNERS <I Appendix Page 21
Slide 22: Adjusted Operating Metrics
Adjusted Operating Metrics Total Year Trend 2009 2010 2011 2012 2013 Revenues, GAAP Basis $117,152 $144,556 $204,652 $280,086 $389,215 Less: Distribution and administration expenses 29,939 33,205 50,563 68,274 97,786 Newfleet transition related subadvisory fees - - (1,057) - - Consolidated sponsored
Slide 23: Page 23
“INVESTMENT PARTNERS al _VIRTUS | INVESTMENT PARTNERS Page 23
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