Slide 1: Setting The Record Straight
Setting The Record Straight P ROXY C ON TEST F OR B OARD C H AN GE AT WI SD OMTREE, I N C . ( N YSE: W T) Ma y 2 4 , 2 0 2 3
Slide 2: Disclaimer
DISCLAIMER The materials contained herein (the “Materials”) represent the opinions of ETFS Capital Limited and the other participants named in its proxy solicitation (collectively, the “ETFS Group” or “we”) and are based on publicly available information with respect to WisdomTree, Inc. (the “Compan
Slide 3: Why Is Change Needed?
WHY IS CHANGE NEEDED? WisdomTree’s long history of A history of poor capital Governance failures, a pay-for underperformance and allocation, failed investments and performance disconnect and stockholder value destruction unrealistic future plans flawed Board refreshment Total Stockholder Return (T
Slide 4: WisdomTree has destroyed shareholder value, despite massively positive industry tailwinds
WISDOMTREE HAS DESTROYED SHAREHOLDER VALUE, DESPITE MASSIVELY POSITIVE INDUSTRY TAILWINDS Claim: WisdomTree has transformed its business Reality: WisdomTree has destroyed shareholder value “We have not created stockholder value for a while.” - Mr. Steinberg, CEO (4Q2019 Earnings Call) 8 Shareholder
Slide 5: Flawed diversification: net outflows of $3.7bn since 2015, excluding USFR
WISDOMTREE’S FLAWED DIVERSIFICATION: NET OUTFLOWS OF $3.7bn SINCE 2015, EXCLUDING WISDOMTREE'S FLOATING RATE TREASURY ETF "USFR" Claim: WisdomTree has diversified its AUM mix Reality: AUM and inflows largely driven by USFR “WT has significantly diversified its asset mix and meaningfully 8 Rather tha
Slide 6: Strategy has consistently failed to achieve promised revenue growth and margins
WISDOMTREE’S STRATEGY HAS CONSISTENTLY FAILED TO ACHIEVE PROMISED REVENUE GROWTH AND MARGINS Claim: Strategy will continue to provide scale, stability, and Reality: AUM growth has NOT translated into meaningful margin expansion revenue growth or improved profitability “Through the cycle, organic gro
Slide 7: 1Q2023 results highlight continued failure to achieve operating leverage
WISDOMTREE’S 1Q2023 RESULTS HIGHLIGHT CONTINUED FAILURE TO ACHIEVE OPERATING LEVERAGE Reality: Revenue growth has been disappointing and Claim: Strong momentum continues in 2023 margins have neem deteriorating “We outperformed in our most recent quarter in terms of organic growth and revenue generat
Slide 8: Organic AUM comparison: selected peers are grossly oversized
WISDOMTREE’S ORGANIC AUM COMPARISON: WISDOMTREE SELECTED PEERS ARE GROSSLY OVERSIZED Claim: WisdomTree has outperformed peers in organic AUM Reality: Misleading peer group selection yields low growth percentage growth numbers “Our disciplined focus on growth and new products has allowed us to outper
Slide 9: Organic AUM comparison: mischaracterized growth from new products
WISDOMTREE’S ORGANIC AUM COMPARISON: WISDOMTREE HAS MISCHARACTERIZED GROWTH IN AUM FROM NEW PRODUCTS Claim: WisdomTree has outperformed peers due to new Reality: WisdomTree’s performance has come from legacy products products “Our disciplined focus on growth and new products has allowed us to outper
Slide 10: Focus on three-year TSR is disingenuous
WISDOMTREE’S FOCUS ON THREE-YEAR TSR IS DISINGENUOUS. IT IGNORES LONG TERM UNDERPERFORMANCE AND USES LOW SHARE PRICE TO CALCULATE RETURNS Claim: Total Shareholder Return has outperformed Reality: WisdomTree are cherry picking dates “Our Disciplined and Innovative Efforts Have Been Well 8 WisdomTree
Slide 11: WisdomTree lacks resources for WT Prime
WISDOMTREE LACKS RESOURCES FOR WT PRIME WisdomTree Claim Reality • “Tokenized Asset Market could reach $16tr by 2030” • There are bigger, more established peers already operating at • “Launching tokenized products and WT Prime positions WT as an global scale- these peers have user bases over 10m, WT
Slide 12: WisdomTree has yet to define milestones to evaluate WT Prime success
WISDOMTREE HAS YET TO DEFINE MILESTONES TO EVALUATE WT PRIME SUCCESS Claim: WisdomTree has a results-oriented tokenization Reality: Tokenization ‘strategy’ has suffered a delayed strategy launch and significant losses with no milestones “Our tokenization strategy is positioned to deliver favorable 8
Slide 13: WT Prime is negatively impacting profitability
WT PRIME IS NEGATIVELY IMPACTING PROFITABILITY Claim: Proactive investing in tokenization positions Reality: Digital spend is negatively impacting margins WisdomTree well for the future meaning the initiative is incurring losses 8 After investing $30m of shareholder capital, WT Prime has 6,500 test
Slide 14: Strategic plan has destroyed $1.4bn of shareholder value
WISDOMTREE’S STRATEGIC PLAN HAS DESTROYED $1.4bn OF SHAREHOLDER VALUE. ETFS CAPITAL NOMINEES HAVE THE CREDENTIALS AND PLAN TO UNLOCK VALUE Claim: WisdomTree’s Vision for long term growth and Reality: Unlike WisdomTree’s desire to maintain the status quo, sustainable and material margin enhancement o
Slide 15: ETFS Capital's path to value creation
ETFS CAPITAL’S PATH TO VALUE CREATION Maintain Status Quo Reality: WisdomTree lacks a credible strategy. The status 2. Reduce 3. Apply 4. Enhance quo is no longer acceptable 1. Accelerate Operating Discipline to Corporate Revenue Growth Expenses Capital Allocation Governance Align Executive Review c
Slide 16: Unanswered questions despite supposed unanimous board support
DESPITE SUPPOSED UNANIMOUS BOARD SUPPORT FOR THE COMPANY’S STRATEGY AND WT PRIME, THERE ARE A LOT OF UNANSWERED QUESTIONS Claim: The Board completed a rigorous business review of the Reality: The Board continues to be unaccountable and failed to company’s strategy and supports it unanimously address
Slide 17: Current claims about Graham Tuckwell conflict with past statements
WISDOMTREE’S CURRENT claim ABOUT GRAHAM TUCKWELL CONFLICT WITH THEIR OWN PAST STATEMENTS “We have long held Graham Tuckwell and the business he and his team have built in extremely high regard…” “…Like WisdomTree, ETF Securities was started from scratch and has had to compete and win at the highest
Slide 18: Conflict of interest claims have no merit – Graham Tuckwell
WISDOMTREE’S CONFLICT OF INTEREST CLAIMS HAVE NO MERIT – GRAHAM TUCKWELL WisdomTree Claims Reality “In 2019, three private equity firms – which were minority investors in ETF Securities The private equity firms together with Mr. Tuckwell held over 85% of shares; when Limited…at the time the European
Slide 19: Conflict of interest claims have no merit – Graham Tuckwell (contd.)
WISDOMTREE’S CONFLICT OF INTEREST CLAIMS HAVE NO MERIT – GRAHAM TUCKWELL (contd.) WisdomTree Claims Reality The Contractual Gold Payments were not a conflict of interest – they were “…the resolution of the Contractual Gold Payments obligation is a significant simply revenue sharing agreements. The b
Slide 20: Attack claims have no merit – Tonia Pankopf
WISDOMTREE’S ATTACK CLAIMS HAVE NO MERIT – TONIA PANKOPF WisdomTree Claims Reality: (Another cheap attack on highly qualified individual) “Tonia Pankopf is unqualified to serve on the WisdomTree Board” Tonia Pankopf has a successful history of board service which includes the spin-off and restructur
Slide 21: Attack claims have no merit – Bruce Aust
WISDOMTREE’S ATTACK CLAIMS HAVE NO MERIT – BRUCE AUST WisdomTree Claims Reality: (Another cheap attack on highly qualified individual) “Bruce Aust is unfit to serve on the WisdomTree Board” Bruce Aust’s experience with emerging technology, entrepreneurship, and executive leadership at Nasdaq will pr
Slide 22: Claims of trying to resolve this contest are misleading
WISDOMTREE’S CLAIMS OF TRYING TO RESOLVE THIS CONTEST ARE MISLEADING WisdomTree Claims Reality • WT proposed to expand the Board from 9 members to 10 members, with appointment of mutually-agreed director • Since WT did not renominate Deborah Fuhr, this means that WT’s offer would effectively reduce
Slide 23: Long tenured directors have been instrumental in value destruction
LONG TENURED DIRECTORS – FRANK SALERNO AND WIN NEUGER - HAVE BEEN INSTRUMENTAL IN VALUE DISTRUCTION WisdomTree Claims Reality Frank Salerno • Board Tenure: 17.5 Years • No committee refreshment: Has served as chairman of the compensation committee for 17.5 years • Governance Failures: • Entrenched c
Slide 24: Flawed ESG strategy – high risk and D+ ISS ESG rating
WISDOMTREE’S FLAWED ESG STRATEGY – HIGH RISK and ‘D+’ ISS ESG RATING 8 WisdomTree did not publish a comprehensive ESG/CSR report in 2021 or 2022 8 WisdomTree does not have any Sustainability Accounting Standards Board (SASB), Task Force on Climate- Source: ISS 2022 report report. Permission was nei
Slide 25: The choice is obvious
THE CHOICE IS OBVIOUS The ETFS Capital slate will deliver a new sense of accountability to a board run by incumbents who have failed in their management oversight duties and lack the requisite leadership skills to foster good governance Incumbents ETFS Capital Nominees Competing Directors Frank Sale
Slide 26: ETFS nominees
ETFS NOMINEES We believe our nominees have the requisite skills and experience to deliver real change, if elected. Nominee Experience Overview Core Skills • 21 years at Nasdaq overseeing and advising listed companies serving in several executive roles and retiring as Vice Chairman • Executive and St
Slide 27: Change is necessary
CHANGE IS NECESSARY Our commitment to WisdomTree is undeniable as having over $210m of capital invested in the Company’s stock, we are inherently tied to the company’s growth and prosperity. As pioneers in the ETF industry, we have attempted to share tried and tested ideas to help heal the busin
Slide 28: Appendix
APPENDIX
Slide 29: Organic AUM comparison: peers are grossly oversized
WISDOMTREE’S ORGANIC AUM COMPARISON: PEERS ARE GROSSLY OVERSIZED Claims: WisdomTree has Outperformed Peers in Organic AUM Reality: Peers Selected of Significantly Bigger Size Yields Low Growth Percentage Growth Numbers “Our disciplined focus on growth and new products has allowed Comparisons of AUM
Slide 30: Organic AUM comparison: peers are grossly oversized (contd.)
WISDOMTREE’S ORGANIC AUM COMPARISON: PEERS ARE GROSSLY OVERSIZED (contd.) WisdomTree Claims Reality “Our disciplined focus on growth and new products has allowed Comparisons of AUM growth are grossly misleading: us to outperform our peers and position us for continued growth.” WisdomTree, with AUM u
Slide 31: Background to the gold payable transactions
BACKGROUND TO THE GOLD PAYABLE TRANSANCTIONS When WisdomTree acquired the European ETC business from ETF Securities (ETFS) in 2018, the purchase consideration included WisdomTree paying ETFS 9,500 ounces of gold per annum in perpetuity(1) out of the management fees received on the gold products ac
Slide 32: The genesis of the gold payable obligation (2008)
THE GENESIS OF THE GOLD PAYABLE OBLIGATION (2008) In 2003, the world’s first gold ETFs (called ETCs) were launched in Australia and London by Graham Tuckwell (GT) and the World Gold Council (WGC) through a company called Gold Bullion Holdings (GBH), owned 1/3rd by GT and 2/3rds by WGC By 2008 th
Slide 33: The acquisition by WisdomTree of the ETFS European business (2018)
THE ACQUISITION BY WISDOMTREE OF THE ETFS EUROPEAN BUSINESS (2018) When WisdomTree acquired the European ETC business from ETFS in 2018, the purchase consideration comprised: GBH ETFS WT $611 million in cash and WT shares, plus European business WisdomTree paying ETFS 9,500 ounces of gold per
Slide 34: Buy-back of the WisdomTree gold payable (2023)
BUY-BACK OF THE WISDOMTREE GOLD PAYABLE (2023) The WisdomTree accounts valued the gold payable obligation at $200 million in Dec 2022 and reduced the GBH ETFS WT value to $180 million in Mar 2023 even though the gold price had increased by 9% during that period! WT Gold Payable 9,500 oz pa The g