Polar Capital Holdings Plc · LSE:POLR
Polar Capital — FY2014 Earnings Presentation
23 slides from Polar Capital's earnings presentation, June 2014
Slide 1: Results Presentation June 2014
Results Presentation June 2014 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 For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 2
Slide 3: Financial Review Highlights
Financial Review Highlights • AUM – AUM at 31 March 2014 increased 80% to US$13.2bn from US$7.2bn at March 2013 • Profitability – Pre-tax (pre SBP) profits up over 100% to £34.2m (2013: £16.8m) – Core operating profit excluding performance fees £24.6m (2013: £10.0m) • EPS and Dividend – Adjusted dil
Slide 4: Polar Capital AUM: Significant AUM growth but not linear
Polar Capital AUM Significant AUM growth but not linear 16 14 $13.0 $13.2 12 $11.4 10 $9.2 Billion (US$) 8 $7.2 $6.0 6 $5.1 $5.1 $5.3 $4.4 $4.2 $3.9 $3.9 4 $3.5 $3.1 $2.5 $2.6 $1.9 $2.2 2 $1.5 $1.5 0 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Se
Slide 5: AUM Growth Analysis
AUM Growth Analysis 31 March 2013 31 March 2014 % Increase US$’m US$’m Year on Year Japan 2,388 5,629 136% Long Only (ex Japan) Technology 1,255 1,794 43% Healthcare 616 1,184 92% Financials 669 1,064 59% GEMs 571 831 46% North America 634 1,729 173% Absolute Return Funds 837 934 12% Overall $7.2bn
Slide 6: AUM Flows
AUM Flows AUM at 31 March 2013 $7.2bn Gross inflows quarter 1 [long 2,337 hedge 34] $2,371m quarter 2 [long 2,346 hedge 41] $2,387m quarter 3 [long 1,559 hedge 49] $1,608m quarter 4 [long 2,483 hedge 75] $2,558m Gross outflows quarter 1 [long 524 hedge 15] $(539)m quarter 2 [long 918 hedge 52] $(970
Slide 7: AUM Analysis
AUM Analysis AUM split by strategy Investor mix by geography Long Only 92.9% UK 55.6% Alternative 7.1% Europe 39.2% USA 3.1% Other 2.2% AUM split by business unit Investor mix by holdings Japan 42.5% Bank 39.6% Technology 13.5% Private Wealth Manager 12.1% North American 13.1% Polar Capital Investme
Slide 8: Is Our Diversification Strategy Working? Not at the moment!
Is Our Diversification Strategy Working? Not at the moment! March March March March 2011 2012 2013 2014 Technology 36% 29% 17% 14% Japan 27% 30% 33% 43% Europe 15% 12% 10% - North America - - - 13% Total 78% 71% 60% 70% Number of teams 8 10 11 9 Number of teams with assets > 3 3 7 7 $500m Number of
Slide 9: Fund Capacity
Fund Capacity Strategies AUM 31 March 2014 Capacity Technology $1.8 bn $2bn+ Japan $5.6 bn $6bn+ Europe $0.8 bn $1bn+ Healthcare $1.2 bn $1.5bn+ Financials $1.1 bn $2.5bn+ Convertibles $0.1 bn $1bn+ Emerging Markets $0.8 bn $2bn+ North America $1.7 bn $3bn+ Global Equity $0.1 bn $5bn+ Total $13.2 bn
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 Alternative UCITS Cayman Global Technology European Forager Japan European Conviction Japan Alpha Healthcare Opportunities ALVA Global Convertible Asian Financials Financial Opportunities UCITS Financials Income Global Convertibles – Launched in Q3 2013 Global Insurance Em
Slide 12: Lipper Figures For Long Only Strategies 31 May 2014
Lipper Figures For Long Only Strategies 31 May 2014 6 months 1 year 3 years 5 years Since Inception % 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 t
Slide 13: Alternative Strategies May 2014
Alternative Strategies 31 May 2014 Annualised returns Strategies Inception date YTD 3 years 5 years Inception Forager (EUR) 1 August 2003 3.81% 8.88% 10.79% 11.58% Conviction (EUR) 1 April 2006 -0.39% 3.43% 3.60% 5.87% ALVA (USD) 1 November 2010 2.33% 6.16% n/a 7.27% Global Convertibles (Class I USD
Slide 14: Distribution
Distribution Team of 21 Global Head of Distribution Secretarial Support Head of International Business Development North America EMEA Global Banks Institutional UK Sales Manager, Head of International Sales Manager Global Head of Institutional Consultant Head of UK Discretionary Business Development
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 deliver first quartile performance over the investment cycle • To maintain a robust ope
Slide 16: Financial Review: Profitability – by year
Financial Review Profitability – by year Year Year Year to March ’12 to March ’13 to March ’14 Average AUM US$4.3bn US$5.7bn US$10.8bn Core operating profit £7.1m £10.0m £24.6m Performance fee profit £4.1m £5.5m £7.6m Interest and similar income £0.1m £1.3m £2.0m PBT pre S.B.P. & Pre Goodwill £11.3m
Slide 17: Financial Review: Margin analysis – 6 month periods
Financial Review Margin analysis – 6 month periods 6 months 6 months 6 months to March 13 to September 13 to March 14 Average AUM US$6.2bn US$9.3bn US$12.5bn Change (relative) +50% +34% Core operating profit £5.8m £10.4m £14.2m Change (relative) +79% +36% Core operating margin 30% 35% 38% Change (ab
Slide 18: Financial Review: Costs
Financial Review Costs Year Year Year to March 12 to March 13 to March 14 Comments Salaries, bonuses and other Increase in staff numbers £11.0m £13.5m £15.9m staff costs and increase in share price Core distributions £3.3m £4.8m £16.7m Increase in core profits Core compensation costs £14.3m £18.3m £
Slide 19: Financial Review: Dividend
Financial Review Dividend • Total dividend for the year 25.0p (2013: 13.0p) – Implies second dividend payable 21.0p (2013: 11.0p) • Dividend reflects: – Improved profitability of the company – Health and strength of the company’s balance sheet – Quiet optimism regarding the company’s prospects • Pol
Slide 20: Financial Review: Cash and investments
Financial Review Cash and investments March 2013 March 2014 £m £m Cash £30.9m £47.0m Available for sale investments Alternative fund seed £16.4m £24.9m Long only seed £ 14.8m £ 19.0m £31.2m £43.9m Total cash and investments £62.1m £90.9m Source: Polar Capital. For non-US professional investor use on
Slide 21: Financial Review: Shareholder analysis at 31 March 2014
Financial Review Shareholder analysis at 31 March 2014 Holding Percentage Directors, founders and staff 27.6m 32% Caledonia 8.0m 9% XL 7.0m 8% EBT 1.7m 2% Blackrock 8.3m 9% Hargreave Hale 4.3m 5% Free Float = 49% Others 30.5m 35% Total shares in issue 87.4m 100% At Share Price of £5.00 £6.00 £7.00 D
Slide 22: Summary: Well positioned for long-term growth
Summary Well positioned for long-term growth 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$24 billion of which at the end of M
Slide 23: 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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