Hansa Investment Company Ltd · LSE:HAN
Hansa Investment — Hansa Trust — Investor Presentation (September 2015)
51 slides from Hansa Investment's investor presentation, September 2015
Slide 1: Hansa Trust September 2015
HANSA TRUST PLC le es - ae ) aa, HANSA TRUST September 2015
Slide 2: Hansa Trust Strategic Review: Four Silo Approach
HANSA TRUST Hansa Trust Strategic Review Now Description % Hansa Trust Core Regional Regional exposure based on the output of the Hansa 32% January 2014 Silo House View. Description % UK Special situation UK equities 65% UK Equities UK equity exposure through directly invested special 25% Equi
Slide 3: Performance Review
Performance Review 3
Slide 4: Performance to end July 2015
HANSA TRUST Performance to end July 2015 31 Mar 14 – July Calendar YTD 3 years (p.a.) 5 years (p.a.) 10 years (p.a.) 31 Jul 15 Performance (NAV) -1.0% 0.1% -1.6% 6.7% 6.5% 7.9% Performance ex. OWHL 1.4% 6.5% 7.1% 11.9% 9.4% 6.0% Benchmark 0.3% 1.9% 4.4% 3.3% 3.6% 4.3% Ordinary Share 3.0% -3.5% 2.6%
Slide 5: Performance of the different silos, 16 months to end July 2015
HANSA TRUST Performance of the different silos 16 months to end July 2015 25.0% 20.0% 15.0% 16 months to end July 2015 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% -25.0% UK Equities Core Regional Eclectic & Ocean Wilsons Cash (inc. loans Benchmark Funds Diversifying Assets Holdings Limited and FX) (e
Slide 6: Contribution by holding and silo
£10,000,000 £15,000,000 £20,000,000 £25,000,000 -£10,000,000 £5,000,000 -£5,000,000 £- Adelphi European Select Equity 2,387,414 Findlay Park American Fund 1,711,841 Vulcan Value Equity Fund 1,523,897 Select Equity Offshore, Ltd 1,418,465 BlackRock European Hedge Fund 1,310,049 Goodhart Partners: Han
Slide 7: NAV Performance: improved after 2014 portfolio changes
HANSA TRUST Performance has improved as a result of the portfolio changes made in 2014 16 months to end July 2015 performance including 16 months to end July 2015 performance excluding Ocean Wilson Holdings Ocean Wilson Holdings 0.0% 8.0% 7.0% NAV Performance (TR) NAV Performance (TR) -1.0% 6.0% -2.
Slide 8: Portfolio Characteristics
Portfolio Characteristics 8
Slide 9: Geographic Exposure (as at 31 July 2015)
HANSA TRUST Geographic Exposure (as at 31 July 2015) Look-through analysis of Hansa Trust portfolio, including holdings in Ocean Wilson (Investments) Ltd Hansa Trust Hansa Trust ex. Wilson Sons 60.0% 60.0% 50.0% 50.0% 40.0% 40.0% 30.0% 30.0% 20.0% 20.0% 10.0% 10.0% 0.0% 0.0% Portfolio MSCI ACWI + FM
Slide 10: Sector Exposure (as at 31 July 2015)
HANSA TRUST Sector Exposure (as at 31 July 2015) Look-through analysis of Hansa Trust portfolio, including holdings in Ocean Wilson (Investments) Ltd Hansa Trust Hansa Trust ex. Wilson Sons 35.0% 30.0% 30.0% 25.0% 25.0% 20.0% 20.0% 15.0% 15.0% 10.0% 10.0% 5.0% 5.0% 0.0% 0.0% Portfolio MSCI ACWI + FM
Slide 11: Other Portfolio Characteristics: asset type and currency
HANSA TRUST Other Portfolio Characteristics (as at 31 July 2015) Asset Type Currency Exposure 2.3% 3.8% 2.0% 0.3% 17.0% 22.1% 16.9% 35.6% 25.4% 6.2% 7.5% 60.7% 0.4% Long Only Long-Short Private Equity USD GBP EUR BRL Private Debt UK Equity Wilson Sons Macro Fund Fixed Income Cash Look-through analys
Slide 12: Other Portfolio Characteristics: fees and liquidity
HANSA TRUST Other Portfolio Characteristics Annual Management Fee on Underlying Holdings Liquidity 100% 90% 8.5% 5.4% 80% 44.6% 70% 60% 50% 41.5% 40% 30% 20% 10% 0% 2 <1 <3 <6 Cash 1 Week Fixed Weeks month months months 0% 0 < x ≤ 1% 1 < x ≤ 1.5% 1.5 < x ≤ 2% Cumulative 2.2% 40.2% 51.8% 51.8% 58.2%
Slide 13: NAV Performance in different market environments
HANSA TRUST NAV Performance in different market environments 16 months to July 2015 2.5% 3.0% 2.0% 2.5% 2.0% 1.5% 1.5% 1.0% Return (GBP) Return (GBP) 1.0% 0.5% 0.5% 0.0% 0.0% -0.5% -0.5% -1.0% -1.0% -1.5% -1.5% -2.0% -2.0% -2.5% Average return when index falls Average return when index rises Average
Slide 14: Dividend Profile
HANSA TRUST Dividend Profile Dividend Policy The dividend policy was updated in 2014, and it is now to pay two similar interim dividends each year. Barring unforeseen circumstances, the dividend is expected to grow over time reflecting the longer term returns of the portfolio. Under certain circumst
Slide 15: Performance Analysis – Ocean Wilsons Holdings
HANSA TRUST Performance Analysis – Ocean Wilsons Holdings Annual Dividend and Yield 31/3/14 to 31/7/15: -24.5% (-18.7% total return) $0.70 5.0% 4.5% $0.60 4.0% $0.50 12 month yield 3.5% Dividend $0.40 3.0% 2.5% $0.30 2.0% $0.20 1.5% 1.0% $0.10 0.5% $- 0.0% Apr-05 Apr-07 Apr-09 Apr-11 Apr-13 Apr-15 A
Slide 16: Performance Analysis – Wilson Sons
HANSA TRUST Performance Analysis – Wilson Sons 31/3/14 to 31/7/15 (in GBP): -22.7% (-17.6% total return) Annual Dividend and Yield 7.0% $1.40 6.0% $1.20 5.0% $1.00 Dividend (BRL) 4.0% $0.80 Yield 3.0% $0.60 2.0% $0.40 1.0% $0.20 0.0% $- Yield 12mth Div Source: Bloomberg 16
Slide 17: Portfolio Positioning & Market Outlook
Portfolio Positioning & Market Outlook 17
Slide 18: Current Portfolio Positioning (as at July 2015)
HANSA TRUST Current Portfolio Positioning (as at 31 July 2015) Core Regional Funds UK Equities Eclectic / Diversified Strategic Source: Hansa Trust internal, unaudited 18
Slide 19: Market performance since China market peak
HANSA TRUST Market performance chart as at 28 August 2015…YTD and since China market peak on 27 April 2015 19
Slide 20: Selected milestones
HANSA TRUST Selected milestones Equity market volatility has bounced sharply 20
Slide 21: Causes of weakness
HANSA TRUST Causes of weakness Been in a prolonged bull market Valuations fuller Greece China Concerns Deflation Prospect of US rate rises Low liquidity Commodity price weakness Subdued economic growth 21
Slide 22: China concerns……what are the issues?
HANSA TRUST China concerns……what are the issues? Growth is declining….the question is just how far? 22
Slide 23: China concerns……what are the issues?
HANSA TRUST China concerns……what are the issues? The transition from a manufacturing to a consumption led economy is proving challenging 23
Slide 24: China concerns……what are the issues?
HANSA TRUST China concerns……what are the issues? The Chinese authorities have potentially spent $144bn trying to support the Chinese stock market Policy actions have a sniff of panic The Chinese authorities surprised the market by devaluing the Yuan after a long period of strength 24
Slide 25: US rate rises…the beginning of the end?
HANSA TRUST US rate rises…the beginning of the end? Market had been unanimous in expecting a US rate rise by the end of the year 25
Slide 26: US rate rises…the beginning of the end?
HANSA TRUST US rate rises…the beginning of the end? Massive Fed liquidity has been a key driver of global stock markets 26
Slide 27: The market has been susceptible to a fall: prolonged bull market
HANSA TRUST The market has been susceptible to a fall….prolonged bull market Duration of historical rallies in the S&P 500 without a 10% correction 27
Slide 28: The market has been susceptible to a fall: markets no longer cheap
HANSA TRUST The market has been susceptible to a fall….markets are no longer cheap Chart 1: US 12M forward PE Chart 2: Europe 12M forward PE Chart 3: Asia 12M forward PE 30 25 20 25 20 15 20 15 15 10 10 10 5 5 5 88 91 94 98 01 05 08 11 15 88 91 94 98 01 05 08 11 15 00 02 04 06 08 10 13 15 Europe ex
Slide 29: Do the current issues lead to the next bear market?
HANSA TRUST Do the current issues lead to the next bear market? From an export perspective China is relatively insignificant for most developed markets 29
Slide 30: Do the current issues lead to the next bear market?
HANSA TRUST Do the current issues lead to the next bear market? Whilst US rates may rise, the process is likely to be slow and drawn-out 30
Slide 31: Do the current issues lead to the next bear market?
HANSA TRUST Do the current issues lead to the next bear market? US growth looks entrenched. Importantly, bank lending is picking up Lead indicators point to continuing growth 130 120 110 100 90 80 70 05 07 09 11 13 15 US leading economic indicators index UK composite leading economic indicators inde
Slide 32: Do the current issues lead to the next bear market?
PE (x ) 0 5 10 15 20 25 30 35 40 45 US Japan Europe ex UK Asia x Japan The World HANSA TRUST Emerging Markets AC world France Germany Italy Netherlands Spain Sweden Switzerland China India Brazil Russia Mexico South Africa Turkey Korea Do the current issues lead to the next bear market? UK history r
Slide 33: Do the current issues lead to the next bear market?
HANSA TRUST Do the current issues lead to the next bear market? 33
Slide 34: Summary
HANSA TRUST Summary We see 2 possible scenarios from here Investors remain wary, reacting to Recent falls represent news flow, and ongoing market a blip with a rapid volatility. The market undergoes rebound a slow de-rating as earnings comes through Whilst different journeys both scenarios represent
Slide 35: Appendix
Appendix 35
Slide 36: Corporate structure
HANSA TRUST Corporate structure Salomon family trusts Own 52.3% of the Hansa Trust voting shares (17.95% of the ordinary and A- shares) Hansa Trust Listed on the London Stock Exchange 26.4% stake (Salomon family trusts have an additional 23.7% interest in OWH) Ocean Wilsons Holdings Ltd Listed on th
Slide 37: Benchmarks and purchase dates of funds
Appendix Benchmarks and purchase dates of funds Fund Benchmark Date of purchase Adelphi European Select Equity MSCI Europe NR 27/03/2014 BlackRock European Hedge Fund HFRI Equity Hedge (Total) Index 30/05/2014 22/04/2014. Performance shown CF Odey Absolute Return HFRI Equity Hedge (Total) Index from
Slide 38: Performance of Funds Q2 2015
HANSA TRUST Performance of Funds Q2 2015 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% Performance Relative Performance 38
Slide 39: Liquidity of Funds held directly in Hansa Trust
HANSA TRUST Liquidity of Funds held directly in Hansa Trust Investment Weighting (30 June) % Maximum time to redeem Indus Japan Long Only 2.6% 365 days (52.1 weeks) JLP Credit Opportunities Fund 1.6% 169 days (24.1 weeks) Prince Street Institutional Offshore Ltd 1.4% 164 days (23.4 weeks) NTAsian Di
Slide 40: Team biographies
HANSA CAPITAL PARTNERS Team biographies William Salomon Managing Partner William Salomon has extensive knowledge of all aspects of private client and strategic fund investment business. He was responsible for developing Finsbury Asset Management and the Finsbury range of funds based on the concept o
Slide 41: Team biographies
HANSA CAPITAL PARTNERS Team biographies John Alexander UK Equities, Partner John Alexander has 35 years’ experience working as an investment manager. After reading Modern History at the University of Oxford he joined Drayton Montagu Investment Management in 1980. He worked at Touche Remnant, Henders
Slide 42: Team biographies
HANSA CAPITAL PARTNERS Team biographies William Lewis Research Analyst Will joined Hansa Capital Partners LLP in 2012, having previously worked for four years on the investment team at what was then Lord North Street, now Sandaire Investment Office, a London-based private investment office. He gradu
Slide 43: Overview
HANSA CAPITAL PARTNERS Overview We believe in dynamically moving between asset classes to reflect both valuations and the Dynamic Asset position within the business cycle Allocation We do not view volatility as being an important risk. Rather we would view this as market noise Risk and portfolio
Slide 44: Dynamic Asset Allocation
HANSA CAPITAL PARTNERS Dynamic Asset Allocation The Typical stock market cycle: At peaks and troughs, valuations are generally Outside of market extremes, the business the most important driver for future returns. cycle becomes the primary driver - macro These periods often entail making some
Slide 45: Dynamic Asset Allocation - example
HANSA CAPITAL PARTNERS Dynamic Asset Allocation - example 100% 90% 80% Long-only 70% Private Equity Private Debt 60% Real Assets 50% Emerging Market Debt 40% High Yield Debt 30% Hedge Funds Market Neutral Funds 20% Cash 10% 0% 2009 2010 2011 2012 2013 2014 A clients Strategic Asset Allocation will
Slide 46: Risk
HANSA CAPITAL PARTNERS Risk -48% -46% The fund management industry defines Much more important are drawdowns which volatility as risk – it’s convenient but not exceed a client’s tolerance ultimately relevant to long–term investors such as Hansa 46
Slide 47: Risk
HANSA CAPITAL PARTNERS Risk We protect ourselves against permanent impairments in capital in three ways: Valuation based investment approach and dynamically managing portfolios through business cycles Investing in high quality managers through a rigorous due diligence process Application of
Slide 48: Portfolio Blending/Construction
HANSA CAPITAL PARTNERS Portfolio Blending/Construction Long-Only Long-Short Private Equity Core Our natural hunting A combination of all-weather Our long-term time horizon Regional Silo ground – as endowment managers or protection in enables us to capture the type investors we want more mature
Slide 49: Portfolio Blending/Construction
HANSA CAPITAL PARTNERS Portfolio Blending/ Construction 0% -10% -20% -30% -40% -50% -60% -70% -80% -90% Max Drawdown 14 12 10 New paradigms do present themselves from time- to-time which can have important implications for y ield (%) 8 portfolio construction 6 4 2 0 UK US India China Japan Yields
Slide 50: Well connected
HANSA CAPITAL PARTNERS Well connected We have seeded some exceptional managers The combination of an extraordinarily well connected network and an experienced team enables us to invest in exceptional managers These managers are not normally available to the man on the street 50
Slide 51: Important Notice
IMPORTANT NOTICE This presentation pack is issued by Hansa Capital Partners LLP, which is authorised and regulated by the Financial Conduct Authority. Hansa Capital Partners LLP is the Portfolio Manager and Company Secretary to Hansa Trust PLC. Investment Trusts are UK Public Listed companies and ar