Pollen Street Group Limited · LSE:POLN
Pollen Street — Merger or Acquisition (March 2022)
94 slides from Pollen Street's merger presentation, Mar 2, 2022
Slide 1: Combination of Honeycomb with Pollen Street
COMBINATION OF HONEYCOMB WITH POLLEN STREET 2 MARCH 2022
Slide 2: Today's Presenters
TODAY’S PRESENTERS Robert Lindsey Michael Matthew Potter Hugh Cutler Julian Dale Sharpe McMurray England Managing Business Chairman, Partner, Partner, CFO, Partner, Development, Honeycomb Pollen Street Pollen Street Pollen Street Pollen Street Pollen Street 45+ 25+ 15+ ~20 25+ ~20 X Years of experie
Slide 3: Combining a fast growing private capital asset manager with high quality asset base
COMBINING A FAST GROWING PRIVATE CAPITAL ASSET MANAGER WITH HIGH QUALITY ASSET BASE CREATES OPPORTUNITY FOR AN ACCELERATION OF VALUE CREATION Honeycomb Investment Trust Strong and Strong performance from Honeycomb since inception in 2015 driven by well invested balance sheet stable Positive investor
Slide 4: Proposed Transaction Overview
PROPOSED TRANSACTION OVERVIEW All-share combination of Honeycomb Investment Trust with Pollen Street Capital Pollen Street shareholders will be entitled to receive new Company shares equivalent to 45.53% of the enlarged share capital of the Company (based on a NAV valuation for Honeycomb) Based on t
Slide 5: Compelling Opportunity
COMPELLING OPPORTUNITY £ Compelling Attractive Valuation A Combination That Public Markets Benefits Combination of Fast With Significant Upside Accelerates Growth From The Combination Growth and a Highly Potential Attractive Yield Combined business to enjoy Acquiring Pollen Street at Increased inves
Slide 6: Compelling combination of fast growing AuM profile and highly attractive yield
COMPELLING COMBINATION OF A FAST GROWING AUM PROFILE AND HIGHLY ATTRACTIVE YIELD 25.0% 1,2 High growth profile 20.0% Attractive yield AuM CAGR (‘21 – ’23E) 15.0% 10.0% 5.0% 0.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% Dividend Yield (’23E) Source: Market data sourced from FactSet as of 1 March 2022.
Slide 7: Today's Agenda
TODAY’S AGENDA Section Speaker Page 1 Overview and Highlights of the Proposed Combination Lindsey McMurray 8 The Organisation Lindsey McMurray 22 ESG and Impact Lindsey McMurray 31 Private Equity Michael England 33 Overview 2 of Pollen Street Private Credit Matthew Potter 43 Near-term Opportunities
Slide 8: Overview and Highlights of the Proposed Combination
OVERVIEW AND HIGHLIGHTS OF THE PROPOSED COMBINATION 8
Slide 9: Pollen Street and Honeycomb at a Glance
POLLEN STREET AND HONEYCOMB AT A GLANCE Pollen Street Standalone - Diversified AuM Base AuM Mix as of Dec-211 Private capital asset manager with expertise in both o/w Honeycomb private equity and credit c.21% 40% £3.0bn Proven track record of strong returns at low risk 60% Growing and established bl
Slide 10: A deep and proven investment team aligned with shareholders
A DEEP AND PROVEN INVESTMENT TEAM ALIGNED WITH SHAREHOLDERS Founding Partner Team – A team investing together for 16+ years1 LINDSEY JAMES MICHAEL MATTHEW IAN MCMURRAY SCOTT ENGLAND POTTER GASCOIGNE Managing Partner Partner Partner Partner Partner Highly Experienced and Dedicated Team of Investment
Slide 11: Highly Experienced and Independent Board
HIGHLY EXPERIENCED AND INDEPENDENT BOARD Board Composition Robert Sharpe Jim Coyle Richard Rowney Joanne Lake Lindsey Julian Dale + 1 Independent Senior Independent Independent Independent McMurray CFO Non Executive Chairman Non Executive Director Non Executive Director Non Executive Director CEO Di
Slide 12: High performing asset manager dedicated to fast growing sector
HIGH PERFORMING ASSET MANAGER DEDICATED TO FAST GROWING SECTOR 1 Fast growing asset Global alternative asset management AuM expected to grow at 12% CAGR over 2021-20261 management sector Private Equity and Private Debt growth expected to outperform other alternative strategies 2 Well established fla
Slide 13: Fast growing asset management sector, private equity and debt expected to benefit the most
1 FAST GROWING ASSET MANAGEMENT SECTOR, PRIVATE EQUITY AND DEBT EXPECTED TO BENEFIT THE MOST Investors’ Plans for Their Allocation to Alternatives Global Alternative AuM Evolution1 by 2025 by Asset Classes2 ($TN) ’21E – ’26E 4% 8% 9% CAGR 15% 17% 27% 32% 23.2 25% 24% 33% 38% 34% 5.4 4% 79% 67% 66% 5
Slide 14: Multi Asset and Multi Strategy
2 MULTI ASSET AND MULTI STRATEGY Mid Market Private Equity Senior Asset-backed Credit1 AuM £1.8bn2 AuM £1.2bn2 WEALTH LENDING PAYMENTS CONSUMER REAL ESTATE SUSTAINABILITY TECHNOLOGY INSURANCE SERVICES SME LENDING LENDING LENDING FINANCING EUROPE EUROPE USA Asset backed private debt investor Focused
Slide 15: Dedicated to investing with mega trends globally
3 DEDICATED TO INVESTING WITH MEGA TRENDS GLOBALLY Megatrends Reshaping Financial and Business Services Significant SME Financing New Tech Driving Disruptive Business Models Green Transition Whitespace Financial SMEs: Engine of Underserved by Acceleration in The Challengers Services Getting Economic
Slide 16: Proven track record of strong returns at low risk
4 PROVEN TRACK RECORD OF STRONG RETURNS AT LOW RISK Mid Market Private Equity Senior Asset-backed Credit1 c.£2.0bn Capital invested2 c.£2.8bn Capital invested 25 Portfolio companies 90 Total deals 42% / 4.1x IRR / MOIC on 2021 realisations3 c.£2.3bn Already realised 29% / 3.0x Realised Gross Unlever
Slide 17: Institutional infrastructure ready for growth
5 INSTITUTIONAL INFRASTRUCTURE READY FOR GROWTH Significant Investment Made in Operating Platform, With Infrastructure Already at Scale At scale finance and ops FINANCE, RISK & OPERATIONS DISTRIBUTION HUGH CUTLER LEGAL & COMPLIANCE THE HUB JULIAN DALE CHRIS GILAD AMIR In-house capital raising CF
Slide 18: Purpose and values-based organization
6 PURPOSE AND VALUES-BASED ORGANIZATION Key Principles Core Values Expert Honest and fair with customers and suppliers Caring Purpose delivers A good citizen long-term sustainable performance Enterprising Guardian for future generations Progressive Responsible and responsive employer Driven ESG Embe
Slide 19: Positioned to leverage the platform through expansion into adjacent strategies
7 POSITIONED TO LEVERAGE THE PLATFORM THROUGH EXPANSION INTO OTHER ADJACENT STRATEGIES Senior Mid-market Asset Buyouts Backed Fund of Co- Real Estate US Funds Investment Debt Asset Backed Private Private Equity Credit Debt Sustainability Real Assets Opportunities Market Market Fund Landscape Landsca
Slide 20: Core flagship strategies provide clear routes for increasing AuM
8 CORE FLAGSHIP STRATEGIES PROVIDE CLEAR ROUTES FOR INCREASING AUM Well Positioned to Drive Long Term Growth (AuM1, £bn) >5 ~4 3.0 Existing strategy New strategy First SMAs funded through in discussion already agreed flagship fund. with investors Opportunity to launch dedicated vehicle AUM Dec-21 Gr
Slide 21: Highly attractive financial profile and outlook
8 HIGHLY ATTRACTIVE FINANCIAL PROFILE AND OUTLOOK Combined Financial Targets AuM £4-5bn medium term AuM (c.2-3 years)1 Management Fee c.1.25%-1.50% stable average fee2 over the long term Rates Performance Fees c.15%-25% of total Fund Management Revenue3 in average over the long term and Carry Fund M
Slide 22: Overview of Pollen Street: The Organisation
OVERVIEW OF POLLEN STREET The Organisation 22
Slide 23: A differentiated alternative asset manager
A DIFFERENTIATED ALTERNATIVE ASSET MANAGER Top quality organization, nurtured to support and add value to the investment team Eco-system of expertise, insight, knowledge sharing and best practice developed through the Hub so that we are “more than an investor” Expertise in building businesses Cuttin
Slide 24: Well invested platform with deep capability
WELL INVESTED PLATFORM WITH DEEP CAPABILITY Distribution Finance, Risk & Operations Legal & Compliance Hugh Cutler Julian Dale Chris Palmer Head of Business Development CFO General Counsel Finance & Risk Legal & Compliance 2 Distribution Locations: Europe 14 7 and US Employees2 Employees3 Operations
Slide 25: The Pollen Street ecosystem
THE POLLEN STREET ECOSYSTEM – SPECIALIST APPROACH, INVESTING ACROSS THE CAPITAL STRUCTURE Investing in sectors which have the agility and ambition to be at the forefront of change and maximise opportunities within the evolving landscape Green Economy Work with partners Partner of choice for who have
Slide 26: Purpose-led asset manager
PURPOSE – LED ASSET MANAGER Honest and Fair With Customers A Good Citizen and Suppliers Values-based approach to Aligning growth with working with Investors positive impact and Portfolio companies Purpose Delivers Long-Term Sustainable Performance Enabling society through Contributes knowledge frict
Slide 27: Culture
CULTURE We We are are true true specialists, specialists, renowned renowned for for our our expertise expertise and and insight insight that that creates creates advantage advantage and and amplifies success success amplifies EXPERT We set the standard Who we are Who we are is is what what we we do.
Slide 28: Talent sourcing and retention key to sustainable growth
TALENT SOURCING AND RETENTION KEY TO POLLEN STREET SUSTAINABLE GROWTH Diverse Values- Diverse culture where every person has a voice, attracting Based Culture high quality talent One Team Low ego environment that seeks to be strong partners with Culture our portfolio partners, providing high impact
Slide 29: The Hub is a powerful eco-system
THE HUB IS A POWERFUL ECO-SYSTEM Dedicated team responsible for driving technology development, sales performance and best practice sharing across portfolio Cloud-based IT Tech scalability Data-led products Digital transformation and operational excellence Digital marketing Onboarding and KYC ESG Ai
Slide 30: Proprietary data and analytics systems give us leading edge
PROPRIETARY DATA AND ANALYTICS SYSTEMS GIVE US LEADING EDGE Monitoring Insight Value add Partner Proprietary system with deep Market monitoring Knowledge sharing insight across the sector Landscape mapping Lending engine capability Integrated into our partners Feedback loop informing new Score card
Slide 31: Overview of Pollen Street: ESG and Impact
OVERVIEW OF POLLEN STREET ESG and Impact 31
Slide 32: Financial services has critical role to play in accelerating change
FINANCIAL SERVICES HAS CRITICAL ROLE TO PLAY IN ACCELERATING CHANGE Environmental Social Governance Regional Creating A Lasting Financial Promote Reducing the Impact Economic Environmental Impact Inclusion Diversity of Financial Crime Growth Transition to less environmentally damaging Loans and othe
Slide 33: Overview of Pollen Street: Private Equity
OVERVIEW OF POLLEN STREET Private Equity 33
Slide 34: Private equity targets mid-market buyouts with a 15 year track record
PRIVATE EQUITY TARGETS MID-MARKET BUYOUTS WITH A 15 YEAR TRACK RECORD Mid-market Typical portfolio of 10-14 control investments in mid-market financial services Buyouts Backing Sector specialism drives advantaged deal origination and improved value-creation Industry Targeting 3x gross MOIC with low
Slide 35: Investment strategy capitalizing on global megatrends
INVESTMENT STRATEGY CAPITALIZING ON GLOBAL MEGATRENDS Significant SME Financing New Tech Driving Disruptive Business Models Green Transition Whitespace Financial SMEs: Engine of Underserved by Acceleration in The Challengers Services Getting Economic Traditional EV Financing/ Renewable/ Fintech Grow
Slide 36: Six key subsectors with clear investment themes
SIX KEY SUBSECTORS WITH CLEAR INVESTMENT THEMES Technology Payments Lending Insurance Wealth Services Acceleration of Increased outsourcing Embedded finance Financing need of Greater acceptance of Fintech innovation outsourcing for more flexibility and embedded transition to low advice delivered acc
Slide 37: We build tech enabled, customer centric data-driven organisations
WE BUILD TECH ENABLED, CUSTOMER CENTRIC DATA- DRIVEN ORGANISATIONS THROUGH END-TO-END DIGITALISATION PROGRAMS Digitalisation is a Significant Opportunity for the Established But Smaller Players In Which We Seek To Invest High Firms with strong customer incumbency and high levels of service that have
Slide 38: Expertise in building business leaders
EXPERTISE IN BUILDING BUSINESS LEADERS Sector Focus Provides Common Growth Aryza Case Study: Specialised Software Platform Grows Into Global Framework Across Portfolio Diversified Solution Provider Digitalization of new business origination Acquired Visionblue in Rapid international Exited 50% holdi
Slide 39: European financial services is a vast market with under-penetrated private equity
EUROPEAN FINANCIAL SERVICES IS A VAST MARKET WITH UNDER-PENETRATED PRIVATE EQUITY European Financial Services is a Vast Marketplace… …with Consistent Volume and Differentiated Origination Top European Financial Services Markets by Value Added (£bn)1 over Mid-market addressable deal 209.5 $20bn flow
Slide 40: Sector specialism drives advantaged deal origination and improved value-creation
SECTOR SPECIALISM DRIVES ADVANTAGED DEAL ORIGINATION AND IMPROVED VALUE-CREATION 1 Differentiated Deal Origination Drives 2 Repeatable Operating Growth Framework Attractive Entry Multiples Drives Revenue Led Growth Average EV / EBITDA Multiple at Entry Average Active1 Portfolio Company Operating Per
Slide 41: Case Study: Specialist Risk Group
CASE STUDY: SPECIALIST RISK GROUP Investment Thesis and Sourcing Value Creation During Ownership Diversified specialty commercial insurance broker Scale – organic and inorganic growth and MGA resulted in multiple re-rating Track record of revenue growth; large and Efficiency – operational improvemen
Slide 42: Strategy delivers performance consistent with target of 25%-30% gross IRR
STRATEGY DELIVERS PERFORMANCE CONSISTENT WITH TARGET OF 25%-30% GROSS IRR Compelling returns at scale Gross IRR (%) £2bn 122% Deployed 28% 26% Fund I /II Fund III Fund IV 25 (2007) (2016) (2020) Deals2 2.4x / 28% 3.0x / 29% 4.1x / 42% 2.0x Gross Total Returns Since Inception Gross Realised Returns S
Slide 43: Overview of Pollen Street: Private Credit
OVERVIEW OF POLLEN STREET Private Credit 43
Slide 44: Compelling strategy with clear path to growth
COMPELLING STRATEGY WITH CLEAR PATH TO GROWTH Senior secured lending primarily to non-bank lenders, technology companies with embedded finance proposition and other companies with diverse portfolios of assets ASSET-BACKED Large and diverse market that is growing at 8.9% CAGR CREDIT STRATEGY The sect
Slide 45: Large and growing market
LARGE AND GROWING MARKET EXPECTED SIZE OF ASSET-BASED FINANCE MARKET IN FIVE YEARS1 £5trn ~£1TRN (Next 5 Years) 1 ~£3TRN (Next 5 Years) 1 >100% increase over the next ~70% increase over the next 5 years 5 years EUROPE US STRUCTURAL CHANGE DRIVING GROWTH Post ‘07 financial crisis banks INCREASED have
Slide 46: Exciting deal environment across a diverse sector
EXCITING DEAL ENVIRONMENT ACROSS A DIVERSE SECTOR Strong £1.5bn Pipeline… …Aligned to Industry-changing Trends £1.5bn Shift to digital Embedded finance Banks withdrawn lenders with access SME offered through from SME facilities/ to big data and an technology 36% overdrafts emphasis on companies anal
Slide 47: Competitive Landscape
COMPETITIVE LANDSCAPE £ £ FACILITY SIZE £25M £150M Large Global Large Cap Specialist banks Banks Asset Managers Example: Example: Example: High Net Family Worth Public markets Offices Individuals Businesses seeking facilities <£25m: Businesses seeking facilities £25m– Businesses seeking £150m+: – No
Slide 48: Strategy delivering best value risk-adjusted returns with strong downside protection
STRATEGY DELIVERING BEST VALUE RISK-ADJUSTED RETURNS WITH STRONG DOWNSIDE PROTECTION POLLEN STREET PROVIDES SENIOR LOANS SECURED ON PORTFOLIOS OF ASSETS THAT GENERATE CONTRACTUAL CASHFLOWS ASSET BACKED BESPOKE STRUCTURING Senior loans directly secured on Structured to withstand macro assets that gen
Slide 49: Overview of Recent Transactions
OVERVIEW OF RECENT TRANSACTIONS Fast growing SME Lender Innovative Car Subscription Service Strong track record with £1.5bn+ of lending to Europe’s largest electric 50,000+ customers £75m Diverse security net of over £75m vehicle subscription service Secured against fleet of Agreed facility1 4,000 i
Slide 50: Compelling track record in credit
COMPELLING TRACK RECORD IN CREDIT Compelling and stable returns at scale1,2 15.0% £2.8bn 13.4% 10.5% 9.8% 9.5% 13.5% 11.7% Deployed 10.0% 5.0% 0.0% 2016 2017 2018 2019 2020 2021 90 Deals3 European European real estate USA 10%+ >10% >10% >9% Gross unlevered IRR Gross unlevered IRR Gross unlevered IRR
Slide 51: Proprietary data and analytics systems give us substantial visibility
PROPRIETARY DATA AND ANALYTICS SYSTEMS GIVE US SUBSTANTIAL VISIBILITY Proprietary system used to manage credit risk Integrated directly into partners We receive near real-time performance updates, with loan-by-loan granularity Continually monitored to identify any emerging risks in the portfolio MON
Slide 52: Clear path to growth
CLEAR PATH TO GROWTH NEW DEDICATED FUNDS ON BALANCE SHEET CAPITAL Opportunity to break out sub-strategies ACCELERATING GROWTH within broader asset-backed market into dedicated funds Accelerated growth of existing funds Team, track record and pipeline all in Seeding of new dedicated funds with on pla
Slide 53: Overview of Pollen Street: Near-term Opportunities
OVERVIEW OF POLLEN STREET Near-term Opportunities 53
Slide 54: Core flagship strategies provide clear routes for increasing AuM
CORE FLAGSHIP STRATEGIES PROVIDE CLEAR ROUTES FOR INCREASING AUM Well Positioned to Drive Long Term Growth (AuM1, £bn) >5 ~4 3.0 Existing strategy New strategy First SMAs funded through in discussion already agreed flagship fund. with investors Opportunity to launch dedicated vehicle AUM Dec-21 Grow
Slide 55: Highly visible near term opportunities
HIGHLY VISIBLE NEAR TERM OPPORTUNITIES First SMAs already agreed – Expected to grow through H1 2022 US Credit 2 deals completed with $60m committed Fund $1bn+ pipeline Plan to launch flagship US fund over the next 12–18 months Existing strategy funded through flagship fund Real Estate ~£550m deploye
Slide 56: Pollen Street US: penetrating into the largest global private capital market
POLLEN STREET US: PENETRATING INTO THE LARGEST GLOBAL PRIVATE CAPITAL MARKET Strong Track Record and Platform in Place Large Market Opportunity for Continued Expansion Strong US Track Record for Pollen Street Current portfolio and transactions in execution ~$150m ~$500m 10 >9% DEPLOYED DEALS IRR Hig
Slide 57: Real estate debt: opportunity to launch dedicated vehicle
REAL ESTATE DEBT: OPPORTUNITY TO LAUNCH DEDICATED VEHICLE Real Estate Debt: Established Reputation and Track Record of Consistent Delivery Pollen Street’s Multi-Platform Approach Key Statistics ~£550m >10% DEPLOYED IN PSC controlled THE LAST 3 YEARS IRR deployment and underwriting Specialist Real Es
Slide 58: Credit opportunities: new strategy in discussion with investors
CREDIT OPPORTUNITIES: NEW STRATEGY IN DISCUSSION WITH INVESTORS Key Statistics 15%+ £4BN 16+ years Target Net Return Deployed across Experience in executing within contained risk profile Capital structure similar successful strategies2 Our Investment Capabilities ASSET BACKED CREDIT OPPORTUNITIES GR
Slide 59: Overview of Pollen Street: Distribution
OVERVIEW OF POLLEN STREET Distribution 59
Slide 60: Distribution Strategy
DISTRIBUTION STRATEGY CONSTANT Constant contact with both existing and potential DIALOGUE investors, not just when fundraising INTEGRATED MODEL Close collaboration between IR and investment teams LONG TERM Strong relationships with a diversified investor base – RELATIONSHIP 91% re-up rate in latest
Slide 61: Highly supportive and sticky investor base, with accelerating growth
HIGHLY SUPPORTIVE AND STICKY INVESTOR BASE, WITH ACCELERATING GROWTH Highly Supportive Flagship Investors1, Driving Embedded AuM Growth Strong Historical Re-up Rate With Majority of LPs Grow the Size of Delivers Embedded Growth Profile Investors Across the Primary LP Base Their Relationship with Pol
Slide 62: Diversified LP base from long term capital
DIVERSIFIED LP BASE FROM LONG TERM CAPITAL; CLEAR OPPORTUNITIES FOR GROWTH Last Fund Raise1 Investor Last Fund Raise1 Investor Last Fund Raise1 Investors Distribution by Type Distribution by Geography by # Products Based on Committed Capital Based on Committed Capital Based on Committed Capital Sove
Slide 63: Global investor services team with track record of winning new accounts
GLOBAL INVESTOR SERVICES TEAM WITH TRACK RECORD OF WINNING NEW ACCOUNTS Strong Track Record in Adding Capital Investor Services Team with Global Capabilities from New Investors 6 Distribution Magnus Hugh Cutler Lucy Hill Janine Philips Employees Christensson Head of Business Dev. Comms. IR Director
Slide 64: Overview of Honeycomb
OVERVIEW OF HONEYCOMB 64
Slide 65: Track record of delivering stable results
TRACK RECORD OF DELIVERING STABLE RESULTS Robust Performance Supported by Strong Underlying Asset Returns Return on NAV (%) 9.0% 8.7% 7.9% 7.8% 8.2% 7.2% 8.1% 7.5% Strong performance from Honeycomb driven by well invested balance sheet Despite the unprecedented challenge of the Coronavirus pande
Slide 66: Fully deployed and stable asset portfolio
FULLY DEPLOYED AND STABLE ASSET PORTFOLIO Strong Asset Base £m 603 590 615 594 615 551 571 489 High quality portfolio has remained stable at £550m to £600m Cash collections on the portfolio have been strong at £266m1 over the course of the last 12 months, H1 2018 H2 2018 H1 2019 H2 2019 H1 2020
Slide 67: Investment assets composition
INVESTMENT ASSETS COMPOSITION The Honeycomb portfolio comprises 36 investments, balanced across consumer, SME and property sub-markets and stable during the course of 2021 The portfolio is well-diversified, with an average exposure of £17m, maximum single exposure of £52.8m and the ten largest inves
Slide 68: Asset-backed, diversified by sector
ASSET-BACKED, DIVERSIFIED BY SECTOR INVESTMENT ASSETS BY STRUCTURE The majority of the portfolio is senior-secured (83% of Gross Asset Value), providing strong downside protection in event of a downturn Secured Loan Portfolios make up a further 14% of the Senior portfolio, and represent direct portf
Slide 69: Financial Highlights
FINANCIAL HIGHLIGHTS ~50% HONEYCOMB INVESTMENT TRUST : ~50% NAV GENERATION TO DATE¹ 2020 NAV Return: 7.7% 2021 NAV Return: 8.5% 60% 50% 40% NAV Per Share 30% 20% 10% 0% Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 1 Performance since inception through to 31 December 2021. In May 2017, Honeycomb
Slide 70: Honeycomb balance sheet expected evolution
HONEYCOMB BALANCE SHEET EXPECTED EVOLUTION The Group’s investment portfolio will continue to predominantly invest in high quality, diversified and low risk asset based direct lending investments Maintain stable 8% returns on portfolio MAINTAIN FOCUS Investments will consist of both direct investment
Slide 71: Financials and Outlook
FINANCIALS AND OUTLOOK 71
Slide 72: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS SIMPLE 3 revenue streams: management fees, performance fees & BUSINESS carried interests, investment income MODEL STRONG AUM c.44% AuM CAGR1 in 2019–2021; AuM expected to increase GROWTH from c.£3.0bn to c.£4–£5bn in the next 2–3 years STABLE FEE c.2% in Private Equity and c
Slide 73: Strong AuM Growth
STRONG AUM GROWTH 3.0 1.1 ~44% AuM CAGR since 2019 2.0 <(0.1) 0.6 1.5 (0.1) Supported by accelerated fundraising activities Dec-19 Reductions Fundraising Dec-20 Reductions Fundraising Dec-21 AuM 1 AuM AuM 73 1 Excluding PSSL.
Slide 74: Core flagship strategies provide clear routes for increasing AuM
CORE FLAGSHIP STRATEGIES PROVIDE CLEAR ROUTES FOR INCREASING AUM Well Positioned to Drive Long Term Growth (AuM1, £bn) >5 ~4 3.0 Existing strategy New strategy in discussion First SMAs already funded through 1 2 agreed flagship fund. with investors Opportunity to launch dedicated vehicle AUM Dec-21
Slide 75: Private Equity Revenue Model
PRIVATE EQUITY REVENUE MODEL Fund Overview and Revenue Model Illustrative Management Fee Mechanism AuM (Dec-21, £m) £1.8bn (b) (a) (c) Fee Rates c.2%1 Management Fee Committed Model Carried Interest 20% Combined Group 25% Carry2 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Typical
Slide 76: Private Credit Revenue Model
PRIVATE CREDIT REVENUE MODEL Fund Overview and Revenue Model Illustrative Management Fee Mechanism 100% Fee Charging AUM Invested Capital AuM (Dec-21, £m) £1.2bn Undrawn committed capital Management Fee % (a) (b) (c) Fee Rates c.1%1 Management Fee Invested Model Carried Interest 10% - Combined Group
Slide 77: Pollen Street's attractive financial profile
POLLEN STREET’S ATTRACTIVE FINANCIAL PROFILE Revenues Adjusted EBITDA Pollen Street (FY2021) Pollen Street (FY2021) Management Fee (%)5 1.5% £40.4m illustrative revenue Adjusted EBITDA Margin % pro forma for illustrative carried Carry and Performance Fee6 interest, based on fee-paying 24% as % of Ad
Slide 78: Combined financial profile
COMBINED FINANCIAL PROFILE Revenues Adjusted EBITDA Honeycomb + Pollen Street (FY2021 - £m) Honeycomb + Pollen Street (FY2021 - £m) Adjusted EBITDA Margin % £70.7m 58% 62% Balanced revenue profile with +£6.5m £64.2m £43.7m recurring fee income and interest income +£6.5m £37.3m £13.4m ~£71m illustrat
Slide 79: Highly attractive financial profile and outlook
HIGHLY ATTRACTIVE FINANCIAL PROFILE AND OUTLOOK Combined Financial Targets AuM £4-5bn medium term AuM (c.2-3 years)1 Management Fee c.1.25%-1.50% stable average fee2 over the long term Rates Performance Fees c.15%-25% of total Fund Management Revenue3 in average over the long term and Carry Fund Man
Slide 80: Simple financial model
SIMPLE FINANCIAL MODEL Illustrative Pollen Street + Honeycomb Operating Model A AuM1 For every billion of AuM x B Management Fees Rate (%) Assuming 1.3% = AxB=C Management Fee Revenue £13m + D Carry and Performance Fees £3m (@20% contribution to FMR) = D+C=E Fund Management Revenue (“FMR”) £16m x F
Slide 81: P&L sensitivity on AuM and management fee rate
P&L SENSITIVITY ON AUM AND MANAGEMENT FEE RATE Illustrative sensitivity on AuM and management fee rate (Pollen Street + Honeycomb) C D Carry and Performance Fees (£m) Management Fees (£m) (Assuming Illustrative 20% of Total Fund Management Revenue) AuM (£bn) AuM (£bn) 3.0 4.0 5.0 6.0 3.0 4.0 5.0 6.0
Slide 82: Alternative asset managers valuation
ALTERNATIVE ASSET MANAGERS VALUATION Listed Alternative Asset Managers Valuation Framework Revenue Mgt. Fee Firms are primarily valued on P/E EPS Growth Growth Dividend Yield (bps)1 SOTP basis: AuM Market (£bn)2 Cap (£bn) ‘21E ‘22E ’23E ’22E – ‘23E ’22E – ‘23E ’22E ‘23E ’21E 1 – Fee Related Earnings
Slide 83: Terms structured to provide attractive dividend profile
TERMS STRUCTURED TO PROVIDE ATTRACTIVE DIVIDEND PROFILE Combined Group Dividend Policy Dividends Paid on New Pollen Street Capital Shares The Combined Group is expected to enjoy a complementary set of As part of the transaction terms, Pollen Street shareholders have agreed to investment management a
Slide 84: Compelling combination of fast growing AuM profile and highly attractive yield
COMPELLING COMBINATION OF A FAST GROWING AUM PROFILE AND HIGHLY ATTRACTIVE YIELD AuM CAGR (‘21 – ’23E) 25.0% Strong historical AuM growth with high visibility on 1,2 medium term AuM levels 20.0% Stable management fee rate ensuring highly predictable revenue streams 15.0% 10.0% Significant operating
Slide 85: Next Steps and Conclusion
NEXT STEPS AND CONCLUSION 85
Slide 86: Compelling Opportunity
COMPELLING OPPORTUNITY A Combination That Accelerates Growth Attractive Valuation With Significant Upside Potential Public Markets Benefits From The Combination Compelling Combination of a Fast Growing AuM profile and a Highly £ Attractive Dividend Yield 86
Slide 87: Key Transaction Milestones
KEY TRANSACTION MILESTONES Honeycomb FY21 Results Published and Today Capital Markets Day Following approval by the FCA and Documentation Published Takeover Panel c.3 weeks after documents posted to Shareholder Vote shareholders Expected Q2 2022, subject to regulatory Completion and Admission approv
Slide 88: Q&A
Q&A 88
Slide 89: Appendix
APPENDIX a fea a (2 |
Slide 90: AuM by Strategy
AUM BY STRATEGY AUM (£m) Dec-20 Dec-21 Honeycomb 638 635 PSC Credit III - 260 SMAs 80 317 Total Credit 718 1,211 PSC III and related 793 759 PSC IV and related 482 1,063 Total Private Equity 1,275 1,821 Total AuM 1,993 3,033 Source: Company disclosures. 90
Slide 91: Honeycomb Board of Directors Biographies
HONEYCOMB BOARD OF DIRECTORS BIOGRAPHIES ROBERT SHARPE Robert has over 45 years’ experience in retail banking. He is currently also Chairman at MetroBank plc, Hampshire Trust Bank plc and Aspinall Financial Services Limited Robert has had an extensive number of Board appointments both in the UK and
Slide 92: Pollen Street Management Biographies
POLLEN STREET MANAGEMENT BIOGRAPHIES LINDSEY Lindsey and the other founding partners founded Pollen Street in 2013. Lindsey is the Managing Partner as well as Chair of the investment MCMURRAY committee. Lindsey has been a private equity investor for 25 years with a particular focus on the Financial
Slide 93: Disclaimer
DISCLAIMER THIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT IS SOLELY FOR USE AT AN INVESTOR PRESENTATION AND IS PROVIDED FOR INFORMATION ONLY. THIS PRESENTATION DOES NOT CONTAIN ALL OF THE INFORMATION THAT IS MATERIAL TO AN INVESTOR. This investor presenta
Slide 94: Notes on Investment Performance
NOTES ON INVESTMENT PERFORMANCE Notes to Investment Performance – Credit Notes to Investment Performance – Equity Track record excludes run off legacy deals from Pollen Street Secured Lending plc which were "Invested" or "Cost" refers to the total equity invested, including transaction fees and hedg
Pollen Street Group — Merger or Acquisition (March 2022) on 6ix