Pacific Current Group Ltd · ASX:PAC
Pacific Current — Treasury Group — Shareholder Meeting (October 2014)
31 slides from Pacific Current's shareholder meeting presentation, Oct 14, 2014
Slide 1: Treasury Group Limited Annual General Meeting
Treasury Group Limited Annual General Meeting 14 October 2014
Slide 2: Agenda
Agenda 1. Chairman’s Address 2. Review of 2014 3. Northern Lights Merger 4. Outlook & Summary 5. Formal Items of Business 2
Slide 3: Chairman's Address - another year of strong growth
Chairman’s Address - another year of strong growth • FUM at June 2014 - $25.4bn, up 48.5% on previous year • Underlying NPAT $14.0m, up 27.3% year on year • TRG total shareholder return of 42.2% vs 17.3% for the S&P/ASX 300 • Strong momentum continues from RARE Infrastructure and IML • Announcement
Slide 4: Chairman's Address – continued management proactivity
Chairman’s Address – continued management proactivity Evergreen Merger with Freehold completed TAAM ROC Partners Sale to Nikko Orion New investment completed Restructure completed Sept 2013 Dec 2013 Mar 2014 Jun 2014 Sept 2014 TRG CIO recruited PM Capital Northern Lights Services Merger TRG agreemen
Slide 5: Chairman's Address - dividends
Chairman’s Address - dividends Dividend History 60 50 40 • Final dividend 27 cps, fully franked 30 • Total dividend for FY 2014 up 25% cps to 50 cps 20 • Implied payout ratio of 88% (dividend policy 60-80%) 10 0 2009 2010 2011 2012 2013 2014 Interim Final 5
Slide 6: Chairman's address – market environment shifting
Chairman’s address – market environment shifting • Generally favorable market and economic environment albeit significant shifts evident during and after the financial year − Equities markets conducive to new issuance for much of the year (eg IPO activity, capital raisings by LICs including QV Equit
Slide 7: Agenda
Agenda 1. Chairman’s Address 2. Review of 2014 3. Northern Lights Merger 4. Outlook & Summary 5. Formal Items of Business 7
Slide 8: Review of 2014 – significant outcomes during the year
Review of 2014 – significant outcomes during the year • Underlying earnings up 27%. Statutory earnings up 26% • Performance of key boutiques strong, particularly RARE and IML • Continued Retail inflows for IML and RARE during year • Pro-active approach to management of TRG interests − Merger of Ever
Slide 9: Review of 2014 – Total Shareholder Return
Review of 2014 – significant outcomes during the year Total Shareholder Return (TRG vs S&P/ASX All Ordinaries & Diversified Financials) 42.2% Index (Jul 12=100) 24.8% 17.3% Source: Treasury Group and Morningstar Peer group is composed of 19 ASX listed Diversified Financial companies as nominated by
Slide 10: Review of 2014 – improved financial results across the board
Review of 2014 – improved financial results across the board P&L Highlights ($m) FY2014 FY2013 % Change • FUM growth of 17.6% excluding addition Year end FUM ($bn) 25.4 17.1 48.5% of ROC Partners Aggregate Boutique Mgmt Fee • Aggregate net retail fund inflows for 100.7 83.0 21.3% Income ($m) RARE an
Slide 11: Review of 2014 – Alternatives (RARE) drove significant profit growth
Review of 2014 – Alternatives (RARE) drove significant profit growth during year Contribution to FY14 NPAT by Business Segment 16.0 3.785 (1.523) 14.0 13.062 12.0 0.410 10.391 10.0 $m 8.0 6.0 4.0 2.0 0.0 FY13 Australian Alternative Overhead, FY14 Equities Investments Outsourcing, RE Services and One
Slide 12: Review of 2014 - Growth in FUM at RARE and IML
Review of 2014 - Growth in FUM at RARE and IML driving improved financial outcomes for TRG Composition of FUM vs Average Margin 30 80 70 25 Trilogy Freehold (Evergreen) & AR Capital 60 Aubrey & Global Value Investors 20 50 TAAM FUM Avg Margin $bn at year end (bps) ROC Partners 15 40 Celeste 30 RARE
Slide 13: Review of 2014 – key boutiques have delivered alpha
Review of 2014 – TRG’s key boutiques have delivered alpha to investors over the long term Boutique Investment Performance Since Inception (%pa to end August 2014) Net Inception Selected Funds Alpha Sample Ratings Return Date Aubrey Global Conviction +2.2% +0.2% Jan 2007 Zenith – Recommended Celeste
Slide 14: Review of 2014 – ROC Partners
Review of 2014 – ROC Partners • Australian and Asian private equity advisory business formed following MBO from Macquarie − FUM of $5.3bn as at 30 June 2014 including primary investments, secondaries and co- investments − Team of 18 across offices in Sydney, Hong Kong and Tokyo − Revenue model inclu
Slide 15: Agenda
Agenda 1. Chairman’s Address 2. Review of 2014 3. Northern Lights Merger 4. Outlook & Summary 5. Formal Items of Business 15
Slide 16: Northern Lights Capital Group Merger
Northern Lights Capital Group Merger Merger Transaction Overview • Treasury Group Limited (TRG) and Northern Lights Capital Group (Northern Lights) agree to a merger creating an international multi-boutique business with A$49.6bn FUM • Northern Lights is a privately owned, international multi-boutiq
Slide 17: Northern Lights Capital Group Merger
Northern Lights Capital Group Merger Historical FUM (A$bn) • Founded in 2006 and headquartered in Seattle, US NLCG Other Boutiques WHV • Private ownership with 27 limited partners, including BNP 24.6 24.2 Paribas and Laird Norton Companies 13.6 11.9 • 20 employees and offices across the US, UK and F
Slide 18: Northern Lights Capital Group Merger
Northern Lights Capital Group Merger Investment Boutique Location Ownership FUM (A$)(1) Strategy Date Private equity fund of funds focused in the real assets Aether US October 2008 100%5 $1.0bn sector Alphashares US February 2008 31%2 $376m Provider of a range of Chinese equity ETFs Concentrated int
Slide 19: Northern Lights boutiques have delivered alpha
Northern Lights Capital Group Merger –key boutiques have delivered alpha to investors over the long term Boutique Investment Performance Since Inception (%pa to end August 2014) Net Inception Selected Funds Alpha Return3 Date Blackcrane Overseas Alpha +17.3% +5.3% Jan 2013 Del Rey International Equi
Slide 20: Northern Lights Capital Group Merger - Aether
Northern Lights Capital Group Merger - Aether • Aether is a fund of funds business focused on investments into private equity funds that invest in real assets (Oil & Natural Gas, Metals & Minerals, Agricultural, Timber) • Founders: Sean Goodrich, Troy Schell. 7 staff in total • USD$1.0bn in FUM as a
Slide 21: Northern Lights Capital Group Merger - WHV
Northern Lights Capital Group Merger - WHV • Established in 1937, today WHV Investment Management is positioned as a multi-boutique asset management firm which provides access to 4 investment strategies for retail and intermediary clients through financial advisors − 8 Retail sales executives − 181
Slide 22: Northern Lights Capital Group Merger – timetable to completion
Northern Lights Capital Group Merger – timetable to completion • Work towards completion of conditions precedent and other matters is continuing • Matters which have been completed or substantially progressed: − Shareholder agreement processes at required TRG boutiques − Finalisation of merger struc
Slide 23: Agenda
Agenda 1. Chairman’s Address 2. Review of 2014 3. Northern Lights Merger 4. Outlook & Summary 5. Formal Items of Business 23
Slide 24: Outlook – TRG is well positioned
Outlook – TRG is well positioned • Proposed merger with Northern Lights establishes platform for future growth ‾ Significantly improved access to international clients and deal flow ‾ Merger remains conditional however processes all on track • TRG’s business model remains leveraged to markets ‾ Dow
Slide 25: Outlook - Strategy
Outlook - Strategy To be the leading global investment business focussed on equity investment into boutique funds management firms • Complete merger and integrate business operations • Leverage Distribution capabilities to drive growth in asset base and capture cross-selling opportunities • Expand a
Slide 26: Agenda
Agenda 1. Chairman’s Address 2. Review of 2014 3. Northern Lights Merger 4. Outlook & Summary 5. Formal Items of Business 26
Slide 27: Formal Items of Business - Financial statements and reports
Formal Items of Business Item 1: Financial statements and reports “To receive and consider the Financial Report, the Directors’ Report and the Auditor’s Report for the year ended 30 June 2014” 27
Slide 28: Formal Items of Business - Re-election of Mr Peter Kennedy
Formal Items of Business Item 2: Re-election of Mr Peter Kennedy “That Mr Peter Kennedy, a Director retiring by rotation in accordance with the Company’s constitution and offering himself for re-election, be re-elected as a Director of the Company.” Proxies have been received in respect of the resol
Slide 29: Formal Items of Business - Remuneration Report
Formal Items of Business Item 3: Adoption of Remuneration Report “To adopt the remuneration report forming part of the Directors’ Report for the financial year ended 30 June 2014” Proxies have been received in respect of the resolution as follows: In favour Against Abstention Proxy’s Discretion 4,79
Slide 30: Partnering with outstanding investment professionals
Partnering with outstanding investment professionals to deliver superior investment performance to clients Superior alignment of investment team incentives to client outcomes Equity ownership delivers greater team stability Alpha is disproportionately rewarded by investors Accessibility and transpar
Slide 31: Disclaimer
Disclaimer The information in this presentation is general background information about Treasury Group Limited and is current only at the date of this presentation. In particular, this presentation: • is not an offer or recommendation to purchase or subscribe for securities in Treasury Group limited