Polar Capital Holdings Plc · LSE:POLR
Polar Capital — H1 2014 Earnings Presentation
24 slides from Polar Capital's earnings presentation, December 2013
Slide 1: Results Presentation December 2013
Results Presentation December 2013 Tim Woolley (CEO) John Mansell (COO) This presentation is for one-on-one use with non-US professional investors only www.polarcapital.co.uk
Slide 2: Contents
Contents Section I • Business Review Section II • Financial Review An S&P Capital IQ Fund Award represents an opinion only and should not be relied on when making an investment decision. S&P Capital IQ Fund Awards are not a financial promotion and are not intended to predict future results nor do th
Slide 3: Financial Review Highlights
Financial Review Highlights • AUM – AUM at 30 September increased 58% to US$11.41bn from US$7.21bn at March 2013 • Profitability – Pre-tax (pre SBP) profits up over 100% to £10.6m (2012: £4.6m) – Core operating profit excluding performance fees £10.4m (2012: £4.2m) • EPS and Dividend – Adjusted dilu
Slide 4: Polar Capital AUM
Polar Capital AUM 14 12 $11.4 10 Billion (US$) 8 $7.2 6 $5.3 $5.1 $3.9 $3.9 4 $3.1 $2.5 $1.9 2 $1.5 0 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Source: Polar Capital, 30 September 2013. For non-US professional investor use only. Please refer to the Important Information a
Slide 5: AUM Growth Analysis
AUM Growth Analysis 30 September 30 September % Increase 2012 2013 Year on Year US$’m US$’m Japan 1,421 4,914 246% Long Only (ex Japan) 2,864 5,327 86% Technology 1,321 1,488 13% Healthcare 440 794 80% Financials 526 975 85% GEMs 234 749 220% North America 343 1,321 285% Absolute Return Funds 722 84
Slide 6: AUM Flows
AUM Flows AUM at 31 March 2012 $5.1bn Gross inflows Total [long 2,875 hedge 146] $3,021m Gross outflows Total [long 1,343 hedge 60] $(1,403)m Net flows $1,618m Performance and currency movements $507m AUM at 31 March 2013 $7.2bn Gross inflows quarter 1 [long 1,896 hedge 20] $1,916m quarter 2 [long 2
Slide 7: AUM Analysis
AUM Analysis AUM split by strategy Investor mix by geography Long Only 92.3% UK 56.8% Hedge Funds 7.7% Europe 37.8% USA 3.1% Other 2.3% AUM split by business unit Investor mix by holdings Japan 43.0% Bank 39.1% Technology 13.0% Asset Manager 12.8% North American 11.6% Polar Capital Investment Compan
Slide 8: Is Our Diversification Strategy Working?
Is Our Diversification Strategy Working? March March March September 2011 2012 2013 2013 Technology 36% 29% 17% 13% Japan 27% 30% 33% 43% Europe 15% 12% 10% - North America - - - 12% Total 78% 71% 60% 68% Number of teams 8 10 11 11 Number of teams with assets > 3 3 7 7 $500m Source: Polar Capital, 3
Slide 9: Fund Capacity
Fund Capacity Strategies AUM 30 September 2013 Capacity Technology $1.5bn $2bn+ Japan $4.9bn $6bn+ Europe $0.7bn $1bn+ Healthcare $0.8bn $1.5bn+ Financials $1.0bn $2.5bn+ Convertibles $0.1bn $1bn+ Emerging Markets $0.7bn $2bn+ North America $1.3bn $3bn+ European Market Neutral <$0.1bn $1bn+ Global E
Slide 10: Investment Teams: The original vision still holds true
Investment Teams The original vision still holds true Ten to twelve world class investment teams Pre 2010 2010 2011 2012 2013 2014 Technology Technology Technology Technology Technology Technology Japan Japan Japan Japan Japan Japan Europe Europe Europe Europe Europe Europe Healthcare Healthcare Hea
Slide 11: Product Overview
Product Overview Long only Hedge and absolute return UCITS Cayman Global Technology European Market Neutral Japan European Forager Japan Alpha European Conviction Healthcare Opportunities Biotechnology Fund (November 2013) ALVA Global Convertible Asian Financials Financial Opportunities UCITS Financ
Slide 12: Lipper Figures For UCITS Strategies 31 October 2013
Lipper Figures For UCITS Strategies 31 October 2013 3 months 6 months 1 year 3 years 5 years % Growth to % Growth to % Growth to % Growth to % Growth to universe position/ universe position/ universe position/ universe position/ universe position/ Strategies universe total Quartile universe total Qu
Slide 13: Hedge/Absolute Return Strategies 31 October 2013
Hedge/Absolute Return Strategies 31 October 2013 Annualised returns Strategies Inception date YTD 3 years 5 years Inception European Market Neutral (EUR)1 4 May 2010 1.97% n/a n/a -0.18% European Market Neutral (Class I EUR) 2 8 March 2012 3.54% n/a n/a -2.20% Forager (EUR) 1 August 2003 8.31% 9.07%
Slide 14: Distribution
Distribution November 2009 CEO 1 2 3 4 5 Direct 5 1 2 Support 2 November 2012 CEO Head of UK Head of North America Head of International 1 2 3 4? 1 2? 1 2 3? Direct 8 Marketing Manager Client Support Manager 3rd Party 3rd Party 2 1 2 1 2 3 4? Germany Scandinavia ? Support 7 November 2013 CEO Head of
Slide 15: Goals and Strategy
Goals and Strategy Goals • To be a leading global investment management boutique • To be a strong dependable partner to our clients offering them a range of interesting and differentiated investment products • To maintain a robust operational infrastructure • To maintain high levels of client servic
Slide 16: Financial Review: Profitability – by period
Financial Review Profitability – by period 6 months 6 months Year 6 months to September 12 to March 13 to March 13 to September 13 Average AUM US$5.2bn US$6.2bn US$5.7bn US$9.3bn Core operating profit £4.2m £5.8m £10.0m £10.4m Performance fee profit - £5.5m £5.5m - Interest and similar income £0.4m
Slide 17: Financial Review: Margin analysis – 6 month periods
Financial Review Margin analysis – 6 month periods 6 months 6 months 6 months 6 months to March 12 to September 12 to March 13 to September 13 Average AUM US$4.4bn US$5.2bn US$6.2bn US$9.3bn Change (relative) +18% +19% +50% Core operating profit £3.6m £4.2m £5.8m £10.4m Change (relative) +17% +38% +
Slide 18: Financial Review: Costs
Financial Review Costs 6 months 6 months Year 6 months to September 12 to March 13 to March 13 to September 13 Comments Salaries and bonuses £6.3m £7.2m £13.5m £7.9m Increase in staff numbers Core distributions £2.1m £2.7m £4.8m £6.9m Increase in core profits Core compensation £8.4m £9.9m £18.3m £14
Slide 19: Financial Review: Other operating costs
Financial Review Other operating costs 6 months 6 months Year 6 months to September 12 to March 13 to March 13 to September 13 IT £1.3m £1.2m £2.5m £1.5m Rent and rates £0.6m £0.6m £1.2m £0.7m Professional fees £0.3m £0.4m £0.7m £0.4m Insurance £0.2m £0.2m £0.4m £0.2m Travel and entertainment £0.4m
Slide 20: Financial Review: Dividend
Financial Review Dividend • First dividend payable January 2014 4.0p (2013: 2.0p) – Relative increase in first dividend provides no guidance in respect of second dividend – Second dividend payable in August 2014 • Dividend reflects: – Improved profitability of the company – Health and strength of th
Slide 21: Financial Review: Cash and investments
Financial Review Cash and investments March 2013 September 2013 £m £m Cash £30.9m £22.3m Available for sale investments Hedge fund seed £16.4m £13.7m Long only seed £14.8m £ 20.7m £31.2m £34.4m Total cash and investments £62.1m £56.7m Source: Polar Capital. For non-US professional investor use only.
Slide 22: Financial Review: Shareholder analysis at 30 September 2013
Financial Review Shareholder analysis at 30 September 2013 Holding Percentage Directors, founders and staff 27.0m 32% Caledonia 8.0m 10% XL 7.0m 8% EBT 1.7m 2% Blackrock 8.2m 10% Artemis 3.8m 5% Free Float = 48% Liontrust 2.9m 3% Others 24.5m 30% Total shares in issue 83.1m 100% At Share Price of £5
Slide 23: Summary: Well positioned in challenging times
Summary Well positioned in challenging times Funds and • Expanded and differentiated product offering performance • Good performance across a wide range of funds • Significant potential for further growth Fund capacity • Total current capacity in the funds of > US$25 billion of which at the end of S
Slide 24: Important Information
Important Information Polar Capital 4 Matthew Parker Street London SW1H 9NP House View This document has been produced based on Polar Capital research and analysis and represents our house view. All sources are Polar Capital unless otherwise stated. Important Information The information provided in
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