Polar Capital Technology Trust PLC · LSE:PCT
Polar Capital Technology Trust — Shareholder Meeting (July 2008)
24 slides from Polar Capital Technology Trust's shareholder meeting presentation, Jul 31, 2008
Slide 1: Polar Capital Technology Trust PLC AGM
POLAR CAPITAL Polar Capital Technology Trust PLC AGM 31st July 2008
Slide 2: Results
Results 2 POLAR CAPITAL
Slide 3: Results Y/E 30 April 2008
Results Y/E 30 April 2008 Net Assets £300.4m NAV per share -5.4% Technology Performance Index Performance Source: Polar Capital Partners / Bloomberg 3 POLAR CAPITAL
Slide 4: Technology shares modestly outperform but…
2007-8 • Technology shares modestly outperform but… • Returns significantly skewed towards US large capitalisation stocks • Marked underperformance of small caps globally • Disappointing FY performance • Portfolio rebalanced, team strengthened • Weakening macroeconomic conditions cloud secular story
Slide 5: Relative Performance
Relative Performance NAV % change relative to peers / index, FY08 NAV % change relative to peers / index, 2/1/01 – 18/7/08 Source: Bloomberg, Polar Capital Source: Bloomberg, Polar Capital, as at 18/7/08 5 POLAR CAPITAL
Slide 6: Portfolio Positioning
Portfolio Positioning 6 POLAR CAPITAL
Slide 7: Current Portfolio (as at end June 2008)
Current Portfolio (as at end June 2008) Source: Polar Capital, as at 30/6/08 7 POLAR CAPITAL
Slide 8: Outlook
Outlook 8 POLAR CAPITAL
Slide 9: Why Technology? Superior Earnings Profile
Why Technology? Superior Earnings Profile Global Sector P/E / Growth estimates (2008-9) Source: Citigroup 9 POLAR CAPITAL
Slide 10: Why Technology? Undemanding valuations
Why Technology? Undemanding valuations S&P Information Technology P/E Absolute P/E Current Relative P/E Source: Ned Davis Research, as at 24/7/08 Source: Ned Davis Research, as at 24/7/08 10 POLAR CAPITAL
Slide 11: Why Technology? M&A picking up (again)
Why Technology? M&A picking up (again) Select technology M&A transactions, 2008 Source: Bloomberg, Polar Capital Partners. Deals may be pending rather than complete. 11 POLAR CAPITAL
Slide 12: Why Technology? Sector should fare relatively well in a downturn
Why Technology? Sector should fare relatively well in a downturn US Net Technology Investment as % of GDP Source: CSFB 12 POLAR CAPITAL
Slide 13: Why Technology? Favourable rate cycle dynamics ahead
Why Technology? Favourable rate cycle dynamics ahead Ratio of Technology Sector to S&P 500 (equal-weighted) around end of Fed easing cycle Source: Ned Davis Research, using rate cycle analysis since 1980. 13 POLAR CAPITAL
Slide 14: Key Themes
POLAR CAPITAL Key Themes 214
Slide 15: Why Technology? Key secular themes are inflecting
Why Technology? A number of key secular themes are inflecting • Distributed Computing reacceleration of IT productivity • Broadband proliferation Ubiquitous computing • Internet delivery mechanism expanding the market • Energy supply demand imbalance technology response • Emerging market growth Infr
Slide 16: Distributed computing = reduced labour costs
Distributed computing = reduced labour costs Legacy • Bandwidth expensive = Local Area Networks (LAN) • Result = massive duplication of IT assets Now • Plentiful & cheap bandwidth / broadband ubiquity Source: Polar Capital Partners • Hardware costs eclipsed by power/ labour costs SAMPLE HOLDINGS • W
Slide 17: Broadband proliferation = ubiquitous computing
Broadband proliferation = ubiquitous computing Cellular bandwidth, by technology (1980-2010E) Legacy • PC’s dominated computing limiting addressable market • Broadband limited to fixed line networks Now • Proliferation of converged devices eg iPhone / iTouch Source: Qualcomm • Broadband available ac
Slide 18: New delivery mechanism = new opportunities
New delivery mechanism = new opportunities Average IT spending per Enterprise ($000) Legacy • Understandable focus on large enterprise market • Upfront costs / IT expertise = barrier to adoption • Consultancy / implementation = real cost of deployment Now *Source: IDC • Internet delivery mechanism l
Slide 19: Environmental Technology = uniquely positioned
Environmental Technology = uniquely positioned Variation in Earth’s surface temperature Alternative Energy • High energy prices / externalities forcing agenda • Government subsidies / regulatory requirements • Renewables* < 1% of global electricity production* • Preferred areas: solar, wind, nuclear
Slide 20: Emerging market growth = Infrastructure super-cycle
Emerging market growth = Infrastructure super-cycle Unprecedented urbanisation ahead Demographics • Unprecedented urbanisation in developing economies driving an infrastructure “super cycle” Infrastructure Source: G Sachs, United Nations Population Projections. Census Bureau • Enabling growth / addr
Slide 21: Secondary themes
Secondary themes Life Expectancy vs. per capita healthcare spending Medical technology • Benefiting from an ageing Western population • Innovation improving patient outcomes / costs • Favoured areas: MIS, diagnostics, special situations Source: UC Atlas of Inequality Outsourcing & offshore services
Slide 22: Conclusion
Conclusion • FY08 was challenging but… • …we continue to believe that we are in the early stages of a new cycle • The sector should prove more resilient to macroeconomic downturn given muted capital spending cycle to date • Earnings estimate risk somewhat mitigated by attractive valuations / balance
Slide 23: Annual General Meeting Proxy Votes
Polar Capital Technology Trust plc Annual General Meeting, 31 July 2008 – Proxy Votes FOR DISCRETIONARY AGAINST WITHHELD Resolution Number No. of Votes No. of Votes No. of Votes No. of Votes 1 42,972,441 70,586 24,400 58,166 2 42,790,264 70,854 174,056 90,419 3 42,530,838 69,614 456,440 68,701 4 42,
Slide 24: Polar Capital Partners disclaimer and contact
Polar Capital Partners Limited Four Matthew Parker Street London SW1H 9NP House View This document has been produced based on Polar Capital Partners’ research and analysis and represents our house view. All sources are Polar Capital Partners unless otherwise stated. Disclaimer The information provid
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