Generation Development Group Limited · ASX:GDG
Generation Development — Investor Day (June 2023)
37 slides from Generation Development's investor day presentation, Jun 8, 2023
Slide 1: Investor day presentation
For personal use only Generation Development Group | gendevelopmentgroup.com.au Generation Development Group Investor day presentation Presented by: Rob Coombe Group Chair Grant Hackett OAM Chief Executive Officer at Generation Life Patrick Clarke General Manager of Retirement Solutions at Generatio
Slide 2: Generation Development Group at a glance
Licensed Pooled Development Fund (PDF) that delivers tax free For personal use only capital gains and tax exempt dividends 100% 49.2% Investment Bonds Annuities One of Australia’s largest qualitative research firms • $2.5bn in FUM (26% 4-year • Investment Linked Lifetime whose research ratings are u
Slide 3: Why Generation Development Group?
Why Generation Development Group? For personal use only Number one inflows for Strong and sustained Resilient business model Track record of product three years running NPAT growth with ‘sticky FUM’ innovation even through market 13%* sales growth, 24%* 34%* underlying NPAT growth Continuing to roll
Slide 4: Increasing FUM growth
Increasing FUM growth Generation Life For personal use only Closing Funds Under Management in $m (Mar) Annual Sales & Net Inflows ($millions) NPAT ($millions) $639 Generation Development Group | gendevelopmentgroup.com.au $6,342 $2,494 $529 26% CAGR 43% CAGR $2,197 $404 $352 $4,050 $1,613 $332 $314
Slide 5: What are the changes and impact?
What are the changes and impact? For personal use only The proposal The opportunity Additional tax on earnings on super balances above $3m, tax will apply to both realised and unrealised gains Measured by total superannuation balance (TSB) Generation Development Group | gendevelopmentgroup.com.au Ad
Slide 6: An opportunity to design a comprehensive estate plan for your clients
For personal use only An opportunity to design a comprehensive estate plan for your clients. Generation Development Group | gendevelopmentgroup.com.au $4.4 trillion1 $224b Total inter-generational wealth opportunity Estimated to pass each year in inheritances with 18% of individuals holding an Avera
Slide 7: Alternative strategies to consider
Alternative strategies to consider For personal use only Contribute to spouse super or Investment Bond Company structure Trust structure children’s super Taxation: Taxation: Taxation: Taxation: • Maximum 30% • 30% • Personal Marginal tax rate or 30% (for • Accumulation 15% corporate beneficiaries) •
Slide 8: Key features of investment bonds
9 key features of investment bonds For personal use only Life Insurance Maximum tax rate of No distributions and Tax paid - no 125% advantage 30% access to funds at personal tax and Tax Act Tax Optimised anytime after 10 years - tax Generation Development Group | gendevelopmentgroup.com.au generally
Slide 9: Generation Development Group outlook
For personal use only Generation Development Group outlook Generation Development Group | gendevelopmentgroup.com.au Investment bond sales continues to Lonsec continue to deliver, with LifeIncome continues to gain traction gather momentum leading into GDG’s shareholding increasing from year end 40.7
Slide 10: Disclaimer
For personal use only Generation Development Group | gendevelopmentgroup.com.au Outthinking today. Disclaimer This presentation has been prepared by Generation Development Group Limited ABN 90 087 334 370 (GDG). GDG believes that the information in this presentation is accurate and reliable, but no
Slide 11: LifeIncome: Lifetime annuities reimagined
For personal use only LifeIncome Lifetime annuities reimagined Generation Life | genlife.com.au Outthinking today.
Slide 12: Summary
For personal use only Summary Australians are the envy of the world when it comes to retirement savings. Every layer of our sophisticated and complex superannuation industry is geared towards people saving more. Due to changes in demographic trends, money is transferring from the accumulation phase
Slide 13: A growing market
A growing market For personal use only Projected superannuation assets (2021 to 2041)1 $1.4 trillion $750b Post-retirement assets market Of assets will move into the predicted to grow by 20301 retirement phase in less than the next 8 years2 ≈ 80% Approximately 1% Generation Life | genlife.com.au Of
Slide 14: Surge in the retiree population from the baby boom
Surge in the retiree population is caused by the great baby boom of the 1950s For personal use only Boomers' retirement mountain: Net annual change in Australian population 65+ 140,000 120,000 100,000 80,000 60,000 40,000 20,000 Generation Life | genlife.com.au 0 19 66 19 68 19 70 19 72 19 74 19 76
Slide 15: Themes from the Retirement Income Review
3 themes from the Retirement Income Review For personal use only The themes below have led to the introduction of the Retirement Income Covenant. 1. 2. 3. Longevity risk is not being Maximising retirement income A combination of regular income adequately addressed should be the aim and access to cap
Slide 16: The Retirement Income Covenant – Three Competing Objectives
The Retirement Income Covenant – Three Competing Objectives For personal use only Having Maximise flexible income Competing objectives access to including Different objectives have require trade-offs funds Age Pension different levels of desirability Retirement income covenant Managing expected risk
Slide 17: Retiree behaviour
For personal use only Retiree behaviour Most retirees only drawdown the People would spend more if they Retirees with lifetime annuities Government mandated minimum knew they would never run out double the amount they are willing from their account-based pension1 of money3 to spend each year, on the
Slide 18: Recognition by industry, regulator and government
For personal use only Recognition by industry, regulator and government Retirement is complicated It is an emotional journey Retirement phase is far more Retirement is an emotional journey complex than accumulation phase with financial risk and uncertainty Generation Life | genlife.com.au It’s about
Slide 19: The Regulator's view
The Regulator’s view… In retirement, income is the outcome For personal use only “ When you’ve spent as much time around super as I have, you get to see a lot of “ Over the next 10 years, an estimated 3.6 million Australians will move..to the images of eggs. Usually in nests, Often retirement phase…
Slide 20: Maximising Retirement Income
Maximising Retirement Income Finding an optimal mix For personal use only A flexible income stream offering wide Account-based Non-super Assets accumulated over time, including investment choice, lump sum savings, the family home, shares, other withdrawals and the ability to vary pension assets inve
Slide 21: Lifetime annuities, reimagined
Lifetime annuities, reimagined For personal use only The Australian lifetime annuity market has traditionally been dominated by fixed income annuities and a long lasting, low rate environment has reduced the attractiveness of these products. Recently, innovation in the lifetime annuity market has se
Slide 22: Key features of Generation Life LifeIncome
Key features of Generation Life LifeIncome For personal use only Lifetime annuities An immediate, 29 investment options – 0% tax environment LifeBooster feature pays investment-linked any combination of Investment earnings a higher income from the reimagined within LifeIncome are lifetime annuity th
Slide 23: Distribution channels and opportunities
For personal use only Distribution channels and opportunities Generation Life has the solution to take advantage of both channels Financial adviser (retail) Super funds LifeIncome White label capability The most flexible investment-linked • Investment options managed by lifetime annuity that offers
Slide 24: Thank you. Outthinking today.
For personal use only Thank you. Outthinking today. Generation Life | genlife.com.au Disclaimer: Generation Life Limited AFSL 225408 ABN 68 092 843 902 (Generation Life) is the product issuer. The information in this presentation is provided for the use of licensed financial advisers and is not inte
Slide 25: Lonsec
For personal use only Lonsec Generation Development Group Limited Investor Day 8 June 2023
Slide 26: Helping make better investment decisions
Helping make better investment decisions Original business model Redesign business model Leverage business model (research only) (research + managed accounts) (diversification + growth) For personal use only A$6bn+ FUM Overall Research Accelerate in Managed House of the Year growth Accounts Launch o
Slide 27: Our core activities
Our core activities Core Offerings Research and Ratings Investment Solutions • Insights and ratings covering managed funds, listed products • Portfolio management of managed accounts (SMA & IMA) For personal use only and direct equities through Lonsec Research including design, construction and reba
Slide 28: The nexus of the industry
The nexus of the industry Market Market Market Clients Advisers Participants Size Growth Superannuation A$3.5tn 6.9% CAGR For personal use only Members / Superannuation super assets last 5 years Employers Funds onnect as board Funds A$4.4tn 5.2% CAGR management managed funds last 5 years SuperRating
Slide 29: Our continuous growth
Our continuous growth Normalised revenue growth – A$m1 Funds under management (FUM) growth – A$bn2 Normalised EBITDA margin Opening FUM For personal use only Normalised revenue (full year) Net movement 7.5 Normalised revenue (half year) 39.3 Implemented Portfolios 4-year CAGR4 4-year CAGR4 1.8 +10%
Slide 30: Key focus areas
Key focus areas Technify Drive the right combination of best-in-class proprietary and partner technology to scale up, increase capacity to grow and be a leader in our key markets For personal use only 1 2 3 Productivity Distribution Innovation Further optimise our operating Broaden and deepen our st
Slide 31: Q&A
For personal use only Q&A
Slide 32: Unrivalled market penetration in our chosen markets
Unrivalled market penetration in our chosen markets Superannuation fund market (#) Managed fund research market (#) 90 1,865 Addressable 1,482 Addressable For personal use only market market Super fund Managed 27 market 90 fund market 1,865 1171 72% market 4,9232 77% market share @ Jun22 penetration
Slide 33: Lonsec's approach to ESG and sustainability
Lonsec's approach to ESG and sustainability Philosophy The incorporation of ESG considerations into investment analysis by fund managers is likely to improve risk or return outcomes and support managers to achieve their investment objectives For personal use only ESG Assessment Sustainability Sustai
Slide 34: Lonsec's approach to investments
Lonsec's approach to investments Philosophy Generate long term returns with a focus on managing downside risk For personal use only Lonsec Investment Solutions Implemented Portfolios Style Multi-factor Valuation Objectives Cash + Long term absolute return focused Benchmark FE Peer Group ST benchmark
Slide 35: Lonsec's approach to investment governance
Lonsec's approach to investment governance Philosophy Portfolios governed by committees. The Product Investment Oversight sub-board Committee oversees Lonsec’s overall investment program & objectives, whilst delegating investment decisions to the various investment committees For personal use only L
Slide 36: Lonsec's proprietary data, content and assets
Lonsec's proprietary data, content and assets Research SuperRatings Investment Solutions • Key proprietary data, insights, tools in research: • Largest superannuation database in the market; • Industry leading bespoke ESG Products • Investment ratings and reports on 1450+ established in 2002 • Indep
Slide 37: Disclaimer
Disclaimer T is presentation was prepared by Lonsec Holdings ty Ltd (ABN 41151 235 406) (“Lonsec”) at the request of Generation e elopment Group Limited (ABN 90 087 334 370)(“G G”) for t e purpose of being presented to G G a nd its s are olders at t e GDG Investor Day event to be held on 8 June 2023
Generation Development Group — Investor Day (June 2023) on 6ix