Hansa Investment Company Ltd · LSE:HAN
Hansa Investment — Investor Presentation (September 2024)
59 slides from Hansa Investment's investor presentation, September 2024
Slide 1: Shareholder Presentation
Shareholder Presentation September 2024
Slide 2: Agenda
Agenda Jonathan Davie – Chairman’s Introduction William Salomon – Brazil & Wilson Sons Alec Letchfield – Portfolio Performance Q&A © 2024 Hansa Investment Company Limited 2
Slide 3: Chairman's Introduction
Chairman’s Introduction © 2024 Hansa Investment Company Limited 3
Slide 4: Board of Directors
Board of Directors Jonathan Davie Simona Heidempergher Richard Lightowler William Salomon Chairman Chair Of Remuneration Committee Chair Of Audit Committee Non-independent, Non-executive Director Jonathan became Chairman of Hansa Simona became a Director of the Richard became a Director of the Inves
Slide 5: Our mission
Our mission A globally-diversified, multi-asset class investor who seeks to identify compelling investment opportunities. Long-term, Access to the world’s Dare to be Operating outside not short-term elite, best-in-class managers different the bureaucracies of a large institution © 2024 Hansa Investm
Slide 6: Discount to NAV versus family controlled holding companies
Key topics: Manchester RIT Capital & London Hansa Caledonia Partners Investment Eurazeo Investment Investments (Rothschild Majedie Pershing Trust (Jean-Charles EXOR Investor AB B Italmobiliare Vivendi Wendel (De Company (Cayzer Family) (end (Barlow Square (Sheppard Decaux (Agnelli (Wallenberg (Pesen
Slide 7: Impact of share buybacks on discount
Key topics: Impact of share buybacks is not always a long term reduced discount. *PSH 5-Year Annualised NAV Return to December 2023 +31.2% *PSH has repurchased 64 million shares, representing 26% of initial shares outstanding, at an average price of $20 and average discount to NAV of 29%. In 2023, P
Slide 8: Wilson Sons
Wilson Sons © 2024 Hansa Investment Company Limited 8
Slide 9: Implied Value of HICL holding in Wilson Sons
Implied Value of HICL holding in Wilson Sons – As at 31 August 2024 Wilson Sons, £94.7m, 20.4% Ocean Wilson (Investments) Limited, £40.5m, 8.7% Remainder of the Portfolio, £330.1m, 71.0% *The fair value of Hansa Investment Company Limited’s holding in OWHL has been apportioned across the two assets
Slide 10: Wilson Sons' Business Timeline
Wilson Sons’ Business Timeline 1997 2003 2007 2012 2016 Container terminal operations begin Offshore support vessel operations Wilson Sons’ IPO on the Brazilian 1st expansion of Salvador container Renewal of Salvador container with the successful bid which begin with the launch of PSV Stock Exchange
Slide 11: Cumulative Inflation and R$ Evolution
Cumulative Inflation and R$ Evolution Sharp depreciation of the BRL in 2016 and 2019, although the long-term exchange rate is slightly higher than the cumulative difference in exchange rates. Brazil Inflation vs US Inflation vs USD/BRL Exchange Rate Inflation Indexed to 100 on Apr/2007 Brazil Inflat
Slide 12: WS Shareholder Return since the IPO
WS Shareholder Return since the IPO US Total shareholder return impacted by BRL depreciation. Both BRL and US total share return restricted between 2016 and 2022 by weak performance of oil and gas service businesses including vessels bases and to some degree towage. Total Shareholder Return (USD) To
Slide 13: WS Financial Performance since the IPO
WS Financial Performance since the IPO Long-term US$ revenue growth impacted by depreciation of the BRL against the USD. EBITDA naturally hedged. Net Revenue and YoY Growth US$ M CAGR 2007-2023: +1% 20.9% 23.3% -4.1% 20.4% 21.3% -12.6% 8.1% -4.0% -19.7% -10.2% 8.6% -7.3% -11.8% -13.1% 12.4% 11.0% 10
Slide 14: Capex and Shareholder Remuneration
Capex and Shareholder Remuneration Dividends since IPO total US$531 million which is 40% of current market capitalisation. Capex should be maintenance with minimal expansion capex needed in the medium term. Capital Expenditure US$M (1) Offshore Vessels (50% JV) 263 IFRS 36 6 months 184 167 150 56 13
Slide 15: WS Year-to-Date Stock Performance
WS Year-to-Date Stock Performance Wilson Sons’ Highlights 2024 Year-to-Date Share Price Performance (Local Currency) as at 16-Sep-2024 as at 16-Sep-2024 Share Overview (PORT3) 12.08% Last Price (BRL) 17.40 52-week Price Range (BRL) 14.47 – 18.20 30-day Average Daily Volume (BRL ‘000) 12,712 Market C
Slide 16: Operational Performance (8M24)
Operational Performance (8M24) Strong container volumes with outstanding performance across terminals. Remarkable increase in harbour manoeuvres and servicing larger vessels. Enhanced offshore energy services fueled by new contracts. Container Terminals: Rio Grande Towage: Harbour Manoeuvres Offshor
Slide 17: Growth Strategy
Growth Strategy Multiple growth prospects underpinning sustainable long-term value creation. RIO GRANDE TERMINAL SALVADOR TERMINAL TOWAGE OFFSHORE ENERGY 1 Plate Transshipment 1 New Quay Capacity 1 Market Growth, Commodity Focus 1 Market Growth 2 Portonave Civil Works 2 Renewable Energy Projects 2 F
Slide 18: Rio Grande Plate Transshipment Strategy
Rio Grande Plate Transshipment Strategy Landmark strategic partnership positions Rio Grande as a key hub port on South America’s east coast. The initiative integrates a feeder service with a direct route to Asia, concentrating cargo from Argentina and Uruguay. Greater efficiency for shipowners by us
Slide 19: Salvador Strengthens its Regional Relevance
Salvador Strengthens its Regional Relevance A direct connection to Asia will help TSA capture cargo from an extended hinterland, consolidating the terminal as a major hub for Brazil's northern and northeastern regions. Source: Wilson Sons. Salvador Container Terminal (24 July 2024) 19
Slide 20: Investment Manager's Report
Investment Manager’s Report © 2024 Hansa Investment Company Limited 20
Slide 21: Agenda
Agenda Why HICL? Market Review Activity and Positioning Performance Conclusion Appendix © 2024 Hansa Investment Company Limited 21
Slide 22: Why HICL?
Why HICL? We are globally diversified, multi-asset class investors who seek to identify compelling investment opportunities in long funds, hedge funds, direct global equities and private assets. We operate without being constrained by benchmarks, but instead seek to conservatively grow capital over
Slide 23: Why HICL?
Why HICL? Natural bias towards equities given long term investment horizon We have recently introduced We hold positions in a private equity to the portfolio, selection of diversifying building on our long history of funds to mitigate downside investing in the asset class. risk. We have increased ou
Slide 24: Market Review
Market Review © 2024 Hansa Investment Company Limited 24
Slide 25: Market & Macro update
Market & Macro update Equal weighted indices have Bitcoin has performed less well 60% been less strong 120% Developed markets in the last 3 months have continued to rally 50% 100% The US, specifically the 40% Magnificent Seven, has 80% outperformed Gold has performed strongly 30% 60% Fixed income pe
Slide 26: Market & Macro update
Market & Macro update Business Cycle Market Themes Inflation / Rates Growth Valuations Magnificent Seven Geopolitics © 2024 Hansa Investment Company Limited 26
Slide 27: Market & Macro update: Inflation & rates
Market & Macro update: Inflation & rates Markets are now forecasting four rate cuts this year Inflation Rates versus Target 12.0% 7 6 10.0% 5 8.0% 4 6.0% 3 4.0% 2 2.0% 1 0.0% 0 Jan-2021 Jul-2021 Jan-2022 Jul-2022 Jan-2023 Jul-2023 Jan-2024 End 2023 Aug-24 US Inflation Rate UK Inflation Rate Forecast
Slide 28: Market & Macro update: Growth
Market & Macro update: Growth QoQ Annualised GDP Growth EPS Growth Forecast 7.0% 20% 6.0% 18% 5.0% 16% 14% 4.0% 12% 3.0% 10% 2.0% 8% 1.0% 6% 0.0% 4% -1.0% 2% -2.0% 0% S&P 500 Stoxx 600 Topix MSCI Asia Pacific MSCI EM MSCI ACWI -3.0% ex-Japan Mar-2022 Sep-2022 Mar-2023 Sep-2023 Mar-2024 2024E 2025E U
Slide 29: Market & Macro update: Valuations
Market & Macro update: Valuations Developed markets appear expensive 35.0 Price-to-earnings ratio 30.0 25.0 20.0 15.0 10.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 MSCI World Index Average Price-to-earnings ratios versus averages The equal weighted index is signific
Slide 30: Market & Macro update: Magnificent Seven
Market & Macro update: Magnificent Seven Performance from 1 Jan 2023 to 31 August 2024 The market cap of the Magnificent Seven is comparable to 800% that of some major economies 700% 6,000 600% 5,000 USD Perfomance Market Cap ($bn) 500% 4,000 400% 3,000 300% 2,000 200% 1,000 100% - 0% Bloomberg Nvid
Slide 31: Market & Macro update: Magnificent Seven
Market & Macro update: Magnificent Seven Price-to-earnings ratio of the Magnificent Seven today versus technology stocks during the dotcom bubble 70.0 “This is the iPhone moment of artificial intelligence. This is the time when all of the big ideas about mobile computing and all that, it all came to
Slide 32: Market & Macro update: Geopolitics
Market & Macro update: Geopolitics Percentage of States at War Percentage share of global GDP 50.0% 1980 2050 45.0% United 40.0% States, United 16.3% States, United 35.0% 25.4% Kingdom, 2.3% France, 30.0% Other, 2.0% 40.9% Germany, Other, 25.0% 2.7% United 45.9% Kingdom, 20.0% 5.4% 15.0% France, 6.3
Slide 33: Market & Macro update: Geopolitics Now
Market & Macro update: Geopolitics Now Trump changed the agenda Military conflicts A movement away from the centre ……..a populist movement away from the centrist governments that have dominated in recent years to more extreme left/right leaning parties © 2024 Hansa Investment Company Limited 33
Slide 34: Activity and Positioning
Activity and Positioning © 2024 Hansa Investment Company Limited 34
Slide 35: Activity and positioning
Activity and positioning Japan Emerging Markets Value USA has dominated our positioning Insurance ……..The US remains our core but we have increased our allocations to specialist managers in other geographies Source: Bloomberg © 2024 Hansa Investment Company Limited 35
Slide 36: Performance
Performance © 2024 Hansa Investment Company Limited 36
Slide 37: NAV, share price and KPI performance
NAV, share price and KPI performance To 31 August 2024 Financial Financial Year 5 years 10 years YTD 2023-24 (p.a.) (p.a.) NAV Performance TR 2.8% 25.1% 8.1% 5.9% NAV Performance ex. OWHL TR 0.4% 11.9% 5.2% 5.4% Ordinary Share TR 9.4% 22.7% 7.2% 3.4% ‘A’ Ordinary Share TR 12.6% 21.8% 5.8% 3.8% FTSE
Slide 38: Gross time-weighted performance of the different silos since strategy change
Gross time-weighted performance of the different silos since strategy change (1st January 2014 to 31st August 2024) 280% 255.9% 260% 240% 220% 214.0% 200% 180% 160% 146.6% 147.7% 143.9% 140% 131.3% 115.5% 112.5% 120% 101.3% 100% 87.1% 80% 62.4% 55.6% 60% 43.4% 35.1% 40% 20% 11.6% 0% -20% Core Region
Slide 39: Activity and positioning: Creating a world-class private equity programme
Activity and positioning: Creating a world-class private equity programme 50.0% 250.0% 40.0% 200.0% 30.0% 150.0% 20.0% 10.0% 100.0% 0.0% 50.0% -10.0% 0.0% 1 Jan 2014 - 31 Aug 2024 -20.0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD 31 Aug 2024 Newer PE Funds (2014 onwards) MSCI World Newer
Slide 40: Performance of less correlated funds
Performance of less correlated funds 1 June 2016 to 31 August 2024 Performance of Less Correlated Funds Max Drawdown HICL Less Correlated HICL Less Correlated Funds UK CPI FTSE Gilts All Stocks Funds MSCI ACWI FM FTSE Gilts All Stocks UK CPI 50.0% 0.0% 43.2% -0.7% 40.0% -5.0% 33.8% -4.5% 30.0% -10.0
Slide 41: Positioning: a portfolio diversified by geography and sector
Positioning: a portfolio diversified by geography and sector As at 31 August 2024 Core Funds Thematic Funds Global Equities Diversifying Assets Strategic (OWHL) Cash 42.0% 7.5% 9.0% 9.8% 29.1% 2.6% 25% 23.5% 20.4% 20% 15% 10% 9.0% 8.7% 6.9% 5% 3.5% 3.7% 3.4% 2.6% 2.6% 2.0% 1.6% 1.9% 1.9% 1.6% 1.8% 0
Slide 42: Global equities: performance by size of holding
Global equities: performance by size of holding As at 31 August 2024 1 Year 3 Year Initial % of Performance Performance Purchase Value % of Global Equity (or since (or since Security Name Date (GBP) Total NAV Silo initial purchase) initial purchase) Interactive Brokers Group Inc 05/04/2017 6,764,551
Slide 43: Global equities silo
Global equities silo As at 31 August 2024 Geographic exposure by listing Performance 1 Year to end August 2024 30% 27.2% Asia, 4.3% 25% UK, 14.3% 20% 19.1% 17.0% US , 34.8% 15% 10% 5% 0% Europe, 46.6% Hansa Investment Company Limited FTSE All Share Total Return MSCI ACWI NR (GBP) Global Equities Per
Slide 44: Discount
Discount Hansa Investment Company Limited Ord and A combined Hansa Investment Company Limited Ord and A combined (relative to AIC overall average discount) 0% 0% -10% -10% -20% -20% -30% -30% -40% -40% -50% -50% -60% -70% -60% Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21 Aug-22 Aug-23 Aug
Slide 45: Conclusion
Conclusion © 2024 Hansa Investment Company Limited 45
Slide 46: Conclusion
Conclusion • From a business cycle perspective, we remain broadly constructive on markets. Whilst not maximum bullishness, liquidity and growth are nonetheless supportive. Valuations mixed with the US expensive, primarily due to the M7, but elsewhere fairer value • The inflation/rates debate rumbles
Slide 47: Appendix
Appendix © 2024 Hansa Investment Company Limited 47
Slide 48: The team
The team William Salomon Senior Partner 41yrs / 24yrs Alec Letchfield Chief Investment Officer, Partner 31yrs / 11yrs Christopher Townsend Investment Director 24yrs / 14yrs William Lewis George Clifton-Brown Henry Millhouse Robert Royle Research Analyst Research Analyst Research Assistant Investment
Slide 49: Hansa timeline
Hansa timeline Rea Brothers acquire the management of Finsbury Trust becomes Hansa a number of invesment companies, Trust including Scottish & Mercantile Rea Brothers purchases 58% of Hansa Trust becomes Ocean Wilsons Holdings Limited on Hansa Investment behalf of its clients including Company Limit
Slide 50: Corporate structure
Corporate structure Hansa Investment Company Limited 26.45% of OWHL is held by HICL 100% Ocean Wilsons Holdings Limited Fund and Direct Equity Holdings Managed by 100% Hansa Capital Partners LLP 56.52% of Wilson Sons is owned by OWHL Ocean Wilsons (Investments) Limited 43.48% Unlisted subsidiary hol
Slide 51: Ocean Wilsons Holdings
Ocean Wilsons Holdings Ocean Wilsons Holdings is a Bermudian investment holding company whose main assets are a controlling interest in Wilsons Sons and an international investment portfolio, both run 56.52% with a long-term view. The Oceans holding is controlled by the Hansa Investment Company 43.4
Slide 52: Fees
Fees The fee debate is nuanced. Clearly you want to keep fees Passive Third party Can be higher cost with down to reduce friction but Low cost but guaranteed two layers of fees in a sub market returns. Also going low cost may work to your structurally biased fund structure. However, you can invest i
Slide 53: Fees
Fees Weighted average management Annual 3rd party management fees on underlying holdings fee = 1.2%. This includes the 50.0% management fee paid to Hansa 47.6% Capital Partners LLP as well as management fees paid to third 40.6% parties for the underlying funds. 40.0% 30.0% 20.0% 10.0% 7.7% 4.1% 0.0%
Slide 54: Fees
Fees Third party fees within HICL 3.0% Internally managed therefore no third party fees 2.5% Fees as % of NAV 2.0% Our management 1.5% fee is reduced from 1% as it is not charged on Ocean 1.0% Wilsons Holdings 0.5% 0.0% HICL RIT Capital Witan Jupiter Merlin Schroder ISF BNY Mellon abrdn GARS Ruffer
Slide 55: Team biographies
Team biographies William Salomon Alec Letchfield Chairman, Senior Partner Chief Investment Officer, Partner William Salomon has extensive knowledge of In 1999 Rea Brothers Group was taken over Alec has over 30 years' experience in Group. This highly diverse range of solutions all aspects of private
Slide 56: Team biographies
Team biographies Christopher Townsend Robert Royle Investment Director, Private Equity Investment Manager, Global Equities Christopher is a qualified solicitor. He has an MA from Peterhouse, Cambridge and was Robert joined Hansa Capital Partners in 2016 to manage Global Equity portfolios. Prior to t
Slide 57: Team biographies
Team biographies William Lewis George Clifton-Brown Henry Millhouse Research Analyst Research Analyst Research Assistant Analyst Will joined Hansa Capital Partners LLP in 2012, after George joined Hansa Capital Partners LLP in 2018, Henry joined Hansa Capital Partners LLP in 2022 having four years o
Slide 58: Important notice
Important notice It is very important that you consider this disclaimer and warning before using the information provided within this presentation pack, as it explains certain regulatory and legal restrictions applicable to any investment services provided, the use and distribution of information in
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