Pinnacle Investment Management Group Limited · ASX:PNI
Pinnacle Investment Management — Wilsons Advisory Rapid Insights Conference 2018
34 slides from Pinnacle Investment Management's conference presentation, May 24, 2018
Slide 1: Pinnacle Investment Management Group Limited – Presentation
For personal use only 24 May 2018 By electronic lodgement The Manager Company Announcements Office ASX Ltd 20 Bridge Street SYDNEY NSW 2000 Pinnacle Investment Management Group Limited – Presentation Pinnacle Investment Management Group Limited is pleased to attach a copy of a presentation that will
Slide 2: Pinnacle Investment Management Group Limited (PNI)
For personal use only Pinnacle Investment Management Group Limited (PNI) Alan Watson and Adrian Whittingham Wilsons Advisory – Rapid Insights Conference 31 May 2018
Slide 3: Update at 31st May 2018
Update at 31st May 2018 For personal use only • First Half Results Presentation just over 2 months ago • First half FY18 Financial Highlights • First half FY18 Business Highlights • Second half FUM and Net Flow Update • New affiliate – Firetrail Investments • Group Overview and Business Focus • Dist
Slide 4: First half FY18 financial highlights
First half FY18 financial highlights For personal use only • NPAT from continuing operations attributable to shareholders of $8.1 million up 170% from $3.0 million in prior corresponding period (PCP). • Diluted earnings per share from continuing operations of 5.0 cents up 138% from 2.1 cents in PCP
Slide 5: First half FY18 business highlights
First half FY18 business highlights For personal use only • Record FUM, FUM inflows and Affiliate Revenues • FUM at 31 December 2017 $32.3 billion (up $5.8 billion or 22% from $26.5 billion at 30 June 2017 and up $9 billion or 39% from $23.3 billion at 31 December 2016). • Retail FUM now $7.1 billio
Slide 6: Funds Under Management – December 2017
Funds Under Management – 31 December 2017 For personal use only 4
Slide 7: Funds Under Management – December 2017
Funds Under Management – 31 December 2017 For personal use only Consistent growth in retail FUM over the medium term – currently 22% of total FUM 5
Slide 8: Funds Under Management – December 2017
Funds Under Management – 31 December 2017 For personal use only Date Pinnacle Hyperion Plato Solaris RCL Palisade Antipodes Spheria Two Trees (total) ($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m) 31 Dec 17 32,338 6,056 4,644 6,618 6,552 1,585 6,261 596 26 30 Jun 17 26,526 5,877 4,003 5,135 5,956 1,51
Slide 9: Financial summary
Financial summary For personal use only Composition of Group Results ($m) 1H2018 1H2017 • Strong growth in Pinnacle Pinnacle* 8.1 4.1 earnings Group overheads (Wilson Group) 0.0 (0.9) • Affiliate base management Profit before tax (PBT) from continuing operations 8.1 3.2 Minority Interests 0.0 (0.2)
Slide 10: Highlights of interim results
Highlights of interim results For personal use only 1H2018 1H2017 Pinnacle Affiliates (100% aggregate basis) FUM ($billion) 32.3 23.3 • Continuing strong FUM and Revenue ($million) 70.5 52.3 revenue growth Net profit before tax 36.1 24.3 • Total Affiliates’ Revenues of Tax expense (10.7) (7.1) Net p
Slide 11: Significant components of 1H2018 results
Significant components of 1H2018 results For personal use only • Reduction in ‘Pinnacle Parent’ operating loss o Total reduction of $2.1m on PCP, to a loss of $1.8m o Strong growth in distribution revenue (net of growth in cost) from Affiliates o Balanced by continuing medium term investment in Hori
Slide 12: A strong and flexible balance sheet at December 2017
A strong and flexible balance sheet at 31 December 2017 For personal use only • $33m of cash and principal investments • Includes $24.6m invested in strategies managed by Pinnacle Affiliates • Excludes nearly $10m of cash applied for Affiliate equity recycling loans and Affiliate equity purchased •
Slide 13: Second half highlights to April 2018
Second half highlights to 30 April 2018 For personal use only • Pinnacle funds under management (FUM) of $35.7 billion at 30 April 2018, up 10% from $32.3 billion at 31 December 2017 and up from $26.5 billion at 30 June 2017. • Retail FUM now $7.7 billion, up from $7.1 billion at 31 December 2017 an
Slide 14: Firetrail Investments
Firetrail Investments For personal use only • Business established • Team of 10 in place and investment process commenced • Initial strategies • High Conviction • Absolute Return • Highly Recommended rating by Zenith for the High Conviction strategy • Marketing commenced • Terms • 23.5% equity • Dis
Slide 15: Affiliate updates
Affiliate updates For personal use only • Antipodes – addition to the Colonial First Choice platform as a stand alone option. Demand for Antipodes EQMF • Hyperion – Global Equity strategy ranked No 1 for 1 year and 3 years to 31 March 2018 in the Morningstar Institutional survey • Palisade – Recent
Slide 16: Pinnacle Affiliates continue to win major industry Awards
Pinnacle Affiliates continue to win major industry Awards For personal use only 2016 Morningstar Fund Manager of the Year Awards: • Hyperion – Australian Fund Manager of the Year • Hyperion – Domestic Equities Category Winner, Australia • Hyperion – Domestic Equities Small Caps Category Winner, Aust
Slide 17: Continuing strong investment performance of Affiliates
Continuing strong investment performance of Affiliates 100% of Pinnacle Affiliated Investment Manager strategies and products (with a track record exceeding 5 years) have out For personal use only performed their benchmarks over the 5 years to 30 April 2018 5Y 10Y Inception Inception date Pinnacle I
Slide 18: Affiliates’ investment performance to April 2018
Affiliates’ investment performance to 30 April 2018 For personal use only 1Y 3Y 5Y 10Y Inception Inception date Pinnacle Investment Management Hyperion Asset Management - Gross Performance Hyperion Australian Growth Companies Fund 6.23% 7.86% 10.46% 9.70% 12.23% 1/10/2002 Outperformance 0.52% 2.07%
Slide 19: Affiliates’ investment performance to April 2018
Affiliates’ investment performance to 30 April 2018 For personal use only 1Y 3Y 5Y 10Y Inception Inception date Pinnacle Investment Management Palisade Investment Partners - Gross Performance Palisade Diversified Infrastructure Fund 12.08% 13.87% 15.23% 10.68% 1/08/2008 Palisade Australian Social In
Slide 20: Discussion of Business Focus
For personal use only Discussion of Business Focus 18
Slide 21: Australia’s leading “multi-affiliate” investment management firm
Australia’s leading “multi-affiliate” investment management firm For personal use only Structure promotes independence, accountability, focus and longevity • Executives of both Pinnacle and Pinnacle Affiliates have significant equity interests • Equity ownership enhances alignment with shareholders
Slide 22: Overview of Pinnacle Affiliates
Overview of Pinnacle Affiliates For personal use only • Antipodes Partners – a pragmatic value manager of global equities (long only and long-short) o Funds under management have grown to in excess of $7.2 billion in under 3 years • Firetrail Investments – high conviction investment manager of Austr
Slide 23: Overview of Pinnacle Affiliates (continued)
Overview of Pinnacle Affiliates (continued) For personal use only • Resolution Capital – a specialist manager of Australian and Global listed real estate securities portfolios. o Funds under management has grown to more than $7.4 billion. • Solaris Investment Management – a specialist manager of Aus
Slide 24: Focus on managing the business to maximise profits and Company value
Focus on managing the business so as to maximise profits and Company value over the medium term For personal use only • We continue to build Pinnacle by taking a medium term approach o Make decisions and release information when it is reliable and representative of ‘real’ or genuine trends o Selecti
Slide 25: Focus on managing the business to maximise profits and Company value
Focus on managing the business so as to maximise profits and Company value over the medium term For personal use only • How does ‘Horizon 2’ add value in the Medium Term? o Investment in growth initiatives that don’t require additional capital to be raised o Reasonable limits to be set given short-t
Slide 26: Horizon 2 examples undertaken in last 12 months
Focus on managing the business so as to maximise profits and Company value over the medium term For personal use only Horizon 2 examples undertaken in last 12 months: • Seeded Two Trees Global Macro Fund on 1 November 2017 with $5m o Promising discussions with early-stage investors • Established Dub
Slide 27: Ongoing expansion of domestic distribution platform
Focus on managing the business so as to maximise profits and Company value over the medium term For personal use only • Ongoing expansion of domestic distribution platform o Adding ‘capital markets’ expertise to accelerate launch of listed offerings (e.g. LICs, LITs, EQMFs) o Continued expansion of
Slide 28: Recap on Horizon Criteria – What could we acquire?
Recap on Horizon 3 Criteria – What could we acquire? For personal use only Criteria • Must not place the Company at risk • Only consider if low risk and high return on capital • Exercise great care and careful due diligence • Must be synergistic with existing core • Few will meet this test Status •
Slide 29: Evolution of Pinnacle’s Distribution capability
Evolution of Pinnacle’s Distribution capability For personal use only • Adapt o Grow ahead of our boutiques o Listen to clients and move quickly to meet their evolving needs o Do not become the market – be ahead of it • Resource o Growing adviser engagement – 15+ in retail o Direct (non advised & of
Slide 30: Evolution of Pinnacle’s Distribution capability
Evolution of Pinnacle’s Distribution capability For personal use only • Traditional `intermediated retail’ distribution expertise expanded over time to include `direct and exchange traded’ o Intermediated (Financial Advisers) Private managed funds – Platform & Direct Exchange traded funds o Dire
Slide 31: Progress to date – Platform and Reputation
Progress to date – Platform and Reputation For personal use only • A platform for GROWTH o Continuing investment excellence o Widespread industry recognition and support o ‘Article of faith’ reputation • Increasing diversification • Proven ability to build high quality investment managers, and facil
Slide 32: Summary and plans for the remainder of FY18
Summary and plans for the remainder of FY18 For personal use only • Maintain current momentum and investment to deliver medium term growth • Maintain culture – attract exceptional individuals to our business and retain them • Continue to deliver growth within existing affiliates • Continue to assess
Slide 33: Disclaimer
Disclaimer For personal use only • This presentation has been prepared by Pinnacle Investment Management Group Limited (PNI). The information in this presentation is current as at 22 May 2018. • This presentation is not an offer or invitation for subscription or purchase of securities or a recommend
Slide 34: Disclaimer
Disclaimer For personal use only • Morningstar Awards 2016 (c). ©2018 Morningstar, Inc. All rights reserved. Awarded to Hyperion Asset Management for Australian Fund Manager of the Year, Domestic Equities Category Winner and Domestic Equities Small Caps Category Winner, Australia. The Morningstar An
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