Pacific Current Group Ltd · ASX:PAC
Pacific Current — Treasury Group — Shareholder Meeting (November 2009)
37 slides from Pacific Current's shareholder meeting presentation, Nov 12, 2009
Slide 1: 2009 Annual General Meeting
2009 Annual General Meeting 12 November 2009 1
Slide 2: Agenda
Agenda • Chairman’s Address ‐ Mike Fitzpatrick • Managing Director’s Address ‐ Mark Burgess • Formal business • Questions 2
Slide 3: Chairman's Address
Chairman’s Address Mike Fitzpatrick 3
Slide 4: Managing Director's Address
Managing Director’s Address Mark Burgess 4
Slide 5: Defining the business
Defining the business Treasury Group invests in, and supports the management of boutique asset management businesses. We believe: Investment businesses need to be directed and driven by the investment professionals to ensure their interests are aligned with their clients The boutique “investment
Slide 6: P & L summary
P & L summary 12 months to 30 June 2009 $000 2009 2008 % Change Net profit after tax 4,953 17,050 (71%) NORMALISED NET PROFIT 7,515 17,330 (57%) Basic earnings per share 21.43 75.29 (72%) Dividend per share (fully franked) 20.00 60.00 (67%) 6
Slide 7: Summary of financial results
Summary of financial results Results were effected by the continued deterioration in global financials markets Decline in equity markets reduce revenues in the second half Retail fund outflows earlier in the period offset by institutional growth Normalised profit after tax was $7.515 million D
Slide 8: Other key features of the financial year
Other key features of the financial year Investment performance against benchmarks strong Performance against benchmarks was solid across managers Net funds flow positive Continued growth in institutional clients Growth in both Australia and offshore Dublin UCIT III funds received commitment
Slide 9: Funds under management – by manager
Funds under management – by manager Net funds flows at RARE, TAAM, GVI and Orion Retail funds outflow due primarily to market conditions Mix of funds between managers has diversified Institutional share of FUM has increased 9
Slide 10: Diversification
Diversification Funds Under Management NOVEMBER 2007 SEPTEMBER 2009 CANNAE CANNAE TRILOGY 1% TRILOGY 0% RARE 8% 11% 5% IM L TAAM RARE 27% 5% IM L 9% GVI 37% 5% TAAM 11% GVI 5% Orion Orion 39% 37% 10
Slide 11: Treasury Group evolution continues
Treasury Group evolution continues US Pension Funds Europe USA 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 New Small Cap Boutique 11
Slide 12: Expense management but with focus on future growth
Expense management but with focus on future growth Expense Management Staff reduced by 10% at Treasury Variable compensation at Treasury sharply lower No bonuses paid to senior management in light of weak markets Other costs reductions made across Treasury functions Boutiques reduced compe
Slide 13: Adding resources during market weakness
Adding resources during market weakness Number of Investment Professionals within the group Our managers took the opportunity to add key investment staff as talent 60 became available 55 50 50 40 Costs were controlled as variable 40 30 compensation was managed 30 23 18 20 12 The investment cul
Slide 14: Global comparison – boutique investors
Global comparison – boutique investors Asset Management • Conor, Clark, Lunn only • Thames River Bank/Financial • NAB Invest • Ignis institution • Pinnacle • Hermes • Ascalon/BT • Sun Life Canada • Hellman & Friedman • Fiduciary Private Equity • Rosemount • Lovett Minnick • Northern Lights Australia
Slide 15: Competitive advantages
Competitive advantages Treasury Group is solely focused on asset management No large financial institutional distractions Strong focus on the value of the investment culture Focus on the long term building of value Private equity looks to exit from investments Stability of the Treasury b
Slide 16: Partners: factors we consider
Partners: factors we consider Passionate about investing An outstanding track record Desire to build and grow an asset management business Wanting team support – both investment team and business support Client focus In an asset class that has future growth 16
Slide 17: Treasury Group positioning
Treasury Group positioning Value Possible new boutiques New Small Cap Boutique Growth Australian equity International equity Specialist Fixed income Absolute 17
Slide 18: Global equity
Global equity • Value Oriented Manager • Growth oriented manager • Strong Track Record • Experienced team • Outstanding retail manager • Ex – Stewart Ivory, Walter Scott • Expanding investment team • Edinburgh and Melbourne based • Targeting institutional growth • Outstanding track Record • TRG supp
Slide 19: AR Capital – absolute return investing
AR Capital – absolute return investing Outstanding four year track record Key principles: Tony Cooper – previous head of trading at Credit Suisse and GSJBW Craig Connelly – previous head of research at GSJBW Peter Lucas – senior analysts and extensive hedge fund experience at Credit Suisse
Slide 20: AR Capital – outstanding performance
AR Capital – outstanding performance ASCOT FUND RETURNS COMPARED TO THE ALL ORDINARIES ACCUMULATION INDEX (1 August 2005 to 30 September 2009) 190.0 180.0 $250,000 INVESTED IN THE ASCOT FUND ON 1 AUGUST 2005 WAS WORTH APPROX. $453,000 AS AT 170.0 30 SEPTEMBER 2009. A SIMILAR INVESTMENT IN THE MARKET
Slide 21: Recent addition
Recent addition Treasury Group has acquired Souls Funds Management Australian equity specialist – smaller companies focus Award winning Recent staff movement resulted in ratings downgrade that is now being reassessed as the key investment people have committed to continue in the business S
Slide 22: Recent addition
Recent addition Financials Flagship product performance Acquisition price: less than NTA As at 31 October 2009 Cash on the balance sheet in excess of $1m Australian Smaller Companies Fund No debt Funds under management in excess of $300m The Fund Benchmark %pa %pa Some restructuring costs
Slide 23: Distribution
Distribution Boutiques’ clients are in both Australia and offshore Distribution undertaken by both Treasury Group and the managers Treasury Group also works to support high level client contact and relationships Strong retail and institutional presence in Australia Global client base • Cli
Slide 24: Australian distribution
Australian distribution Institutional Retail Platforms Rating Targeted Yes Yes Yes Yes - - - New small cap boutique Yes Yes Targeted Yes Targeted 2010 - - Yes Yes Yes Yes Yes Yes - - 24
Slide 25: Developing distribution
Developing distribution European corporate, fund of funds, private bank assets Major corporate and government Corporate and retail Funds of funds and corporate pension Government Highest quality, corporate, industry funds Strong retail Developing client base presence Established client base Establis
Slide 26: History of FUM growth
History of FUM growth 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 $300m $3.5b $0 $4.8b $0 $600m $0 $1.4b $0 $1.2b $0 $40m $130m $80m New Small Cap $300m Boutique 26
Slide 27: Extensive and scaleable support
Extensive and scaleable support SERVICE PROVIDER • Risk management • Compliance • Human Resources • Operations • Administration • Accounting • Marketing • Joint purchasing (including IT services) • Responsible entity New Small Cap Boutique 27
Slide 28: Providing support to our managers
Providing support to our managers Boutique managers are important clients to TIS High quality services – compliance, risk management, finance & HR Very competitive cost base whilst maintaining high quality service Benchmarked against best practice and cost Progressive use of technology O
Slide 29: Summary
Summary Boutiques remain competitive with strong performance A difficult year for financial markets saw profits decline Earnings continue to diversify Treasury Group focused on both reducing cost and building for the future Capital preservation at the market peak has allowed investment at
Slide 30: Gratitude
Gratitude A special note of thanks to the talented people who contribute to the company: The enormously talented fund managers and investment analysts The team that are there to protect us in risk and compliance services The finance and accounting team, Human resources and operations staff Our
Slide 31: Formal Items of Business
Treasury Group Limited 2009 Annual General Meeting Formal Items of Business 31
Slide 32: Formal items of business
Formal items of business Item 1 Financial statements and reports “To receive and consider the Financial Report, the Director’s Report and the Auditor’s Report for the year ended 30 June 2009” 32
Slide 33: Formal items of business
Formal items of business Item 2 Re‐election of Reub Hayes “That Mr Hayes, a Director retiring by rotation in accordance with the Company’s constitution and offering himself for re‐election, be re‐elected” Proxies have been received in respect of the resolution as follows: In favour Against Abstentio
Slide 34: Formal items of business
Formal items of business Item 3 Re‐election of David Cooper “That Mr Cooper, a Director retiring by rotation in accordance with the Company’s constitution and offering himself for re‐ election, be re‐elected” Proxies have been received in respect of the resolution as follows: In favour Against Abste
Slide 35: Formal items of business
Formal items of business Item 4 Election of Michael de Tocqueville “That Mr de Tocqueville, a shareholder offering himself for election, be elected as a Director of the Company” Proxies have been received in respect of the resolution as follows: In favour Against Abstention Proxy’s Discretion 1,256,
Slide 36: Formal items of business
Formal items of business Item 5 Adoption of Remuneration Report “To adopt the remuneration report forming part of the Directors’ Report for the financial year ended 30 June 2009” Proxies have been received in respect of the resolution as follows: In favour Against Abstention Proxy’s Discretion 7,069
Slide 37: Thank you for your attendance
Thank you for your attendance. Please join the Board and Management for refreshments. 37