Polar Capital Technology Trust PLC · LSE:PCT
Polar Capital Technology Trust — Shareholder Meeting (September 2013)
37 slides from Polar Capital Technology Trust's shareholder meeting presentation, Sep 2, 2013
Slide 1: AGM Presentation
AGM Presentation 2 September 2013 This presentation is for one-on-one use with non-US professional investors only www.polarcapital.co.uk
Slide 2: Results As At 30 April 2013
Results As At 30 April 2013 Year ended Year ended Change 30/4/12 30/4/13 (y/y) Net Assets £503,292,000 £528,845,000 +5.1% NAV per ordinary share 392.56p 412.41p +5.1% Price per ordinary share 387.00p 398.50p +3.0% Price per subscription share 12.75p 7.88p -38.2% Benchmark Change +6.0% Ordinary share
Slide 3: PCT As At 31 July 2013
PCT As At 31 July 2013 Year ended Year ended Change Change As at 31/7/13 30/4/12 30/4/13 (y/y) (y/y) Net Assets £503,292,000 £528,845,000 +5.1% £576,438,000 +19.5% NAV per ordinary share 392.56p 412.41p +5.1% 449.34p +19.5% Price per ordinary share 387.00p 398.50p +3.0% 437.60p +16.1% Price per subs
Slide 4: Full Year Review
Full Year Review DJ World Technology vs FTSE World TR since Apr 2012 • Global equities rally sharply (FTSE World + 21.4%) as decisive intervention trumps a muted economic recovery • Technology stocks materially trailed (DJ World Tech + 6% in Sterling terms) as market broadens / capex hiatus / smartp
Slide 5: Full Year Review
Full Year Review DJ World Technology vs FTSE World TR since Nov 2008 • Global equities rally sharply (FTSE World + 21.4%) as decisive intervention trumps a muted economic recovery • Technology stocks materially trailed (DJ World Tech + 6% in Sterling terms) as market broadens / capex hiatus / smartp
Slide 6: PCT Performance
PCT Performance 10 year PCT performance: April 2003 – April 2013 350 325 300 275 250 225 200 175 150 125 100 75 Apr 03 Oct 03 Apr 04 Oct 04 Apr 05 Oct 05 Apr 06 Oct 06 Apr 07 Oct 07 Apr 08 Oct 08 Apr 09 Oct 09 Apr 10 Oct 10 Apr 11 Oct 11 Apr 12 Oct 12 Apr 13 Dow Jones World Technology Index PCTT Ord
Slide 7: Undemanding Valuations
Undemanding Valuations Forward absolute PE: 1992 – present Source: Ned Davis, 16 August 2013. For non-US investor use only. Please refer to the Important Information at the end of this presentation. 7
Slide 8: Undemanding Valuations
Undemanding Valuations Forward relative PE: 1992 – present Source: Ned Davis, 16 August 2013. For non-US investor use only. Please refer to the Important Information at the end of this presentation. 8
Slide 9: 2010: Harnessing The Potential Of The New Cycle
2010: Harnessing The Potential Of The New Cycle “The battle between local and distributed forms of computing has already been played out in the world of electricity generation at the end of the 19th century. Once it became economically possible to distribute power over long distances, incumbent tech
Slide 10: 2011: Public Clouds And The Mass Production Of IT
2011: Public Clouds And The Mass Production Of IT “The shift to cloud computing represents nothing less than the industry transitioning to a mass production model. Standardisation is making it possible to deliver a more monolithic, easily automated form of IT… Just as the skyscraper changed the skyl
Slide 11: 2012: The Internet And The Mass Adoption Of IT
2012: The Internet And The Mass Adoption Of IT “Cheap and plentiful bandwidth, aided by the proliferation of smartphones and tablets has enabled the Internet to become truly ubiquitous. This process bears close resemblance to the post-war experience of the aviation industry which was transformed by
Slide 12: 2013: Extracting Value In The 'Big Data' Era
2013: Extracting Value In The ‘Big Data’ Era “The combination of cheap, scalable computing, together with new tools developed by Internet companies is making it possible to extract value from data sources that just a few years ago would have been uneconomic to (data) mine. Just as the ability to pro
Slide 13: What Does The New Technology Cycle Look Like?
What Does The New Technology Cycle Look Like? IT spending unlikely to resemble the 1990s1 Profound shift in IT priorities2 Ranking 2013 2012 2011 2010 2009 Analytics and Business Intelligence 1 1 5 5 1 Mobile technologies 2 2 3 6 12 Cloud computing (SaaS, laaS, PaaS) 3 3 1 2 16 Collaboration technol
Slide 14: What Does The New Technology Cycle Look Like?
What Does The New Technology Cycle Look Like? IT spending unlikely to resemble the 1990s1 1. Source: Goldman Sachs, May 2013. For non-US investor use only. Please refer to the Important Information at the end of this presentation. 14
Slide 15: What Does The New Technology Cycle Look Like?
What Does The New Technology Cycle Look Like? Profound shift in IT priorities1 Ranking 2013 2012 2011 2010 2009 Analytics and Business Intelligence 1 1 5 5 1 Mobile technologies 2 2 3 6 12 Cloud computing (SaaS, laaS, PaaS) 3 3 1 2 16 Collaboration technologies 4 4 8 11 5 Legacy Modernisation 5 6 7
Slide 16: Cloud Computing: IT as a Variable Cost
Cloud Computing: IT as a Variable Cost • Unrelenting data growth + budget pressure is forcing an architectural rethink away from the “IT sprawl” • Data centre consolidation enabled by virtualisation / bandwidth offers significant power, real estate, labour savings • ‘Clouds’ predominantly private fo
Slide 17: Broadband Applications: Expanding The Market
Broadband Applications: Expanding The Market • Social, mobile and cloud adoption driving growth of online advertising, e-commerce and SaaS • iPhone/Android users access e-commerce 4x more vs. other smartphones and 10-20x non smartphone users1 • Software as a service (SaaS) targets a $150bn opportuni
Slide 18: Mobile Computing: Making The Internet Ubiquitous
Mobile Computing: Making The Internet Ubiquitous • Smartphone penetration (> 1bn globally1) has transformed the value of the Internet (Metcalfe’s Law) • Less exposure to smartphones (due to 42% penetration rate2), focused instead on emerging markets, LTE and mobile payments • Mobile data is forecast
Slide 19: Big Data: What Is It And Why Now?
Big Data: What Is It And Why Now? 2012: mass consumption of IT mass adoption + new applications = unprecedented data growth It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities illustrated. A list of all recommendations made
Slide 20: Big Data: What Is It And Why Now?
Big Data: What Is It And Why Now? 2012: mass consumption of IT 2.4bn Global Internet users 1.5bn Smartphone subscribers 30bn Number of RFID tags mass adoption + new applications = unprecedented data growth Source: IBM and Kleiner Perkins, 2012 Internet Trends report. It should not be assumed that re
Slide 21: Big Data: What Is It And Why Now?
Big Data: What Is It And Why Now? 2012: mass consumption of IT 5.1bn 2.4bn Global Internet users Number of daily searches 6bn Hours of video / month 1.5bn Smartphone subscribers 1.1bn Monthly active users 500m 30bn Number of RFID tags Number of daily tweets 4.3bn Daily database ‘writes’ mass adoptio
Slide 22: Big Data: What Is It And Why Now?
Big Data: What Is It And Why Now? 2012: mass consumption of IT 5.1bn 2.4bn Number of daily searches Global Internet users 1.5bn 6bn Hours of video / month 1.1bn 90% of the world’s data created in the last two Smartphone subscribers Monthly active users years alone 500m 30bn Number of RFID tags Numbe
Slide 23: Big Data: New Tools Required To Extract Value
Big Data: New Tools Required To Extract Value • Today companies only retain the data they perceive to be valuable – c. 5% of the total – discarding the rest • The prospect of extracting value from untapped sources has led data to be described as ‘the next natural resource’ • Existing IT solutions (h
Slide 24: Big Data: New Tools Required To Extract Value
Big Data: New Tools Required To Extract Value • Today companies only retain the data they perceive to be valuable – c. 5% of the total – discarding the rest • The prospect of extracting value from untapped sources has led data to be described as ‘the next natural resource’ • Existing IT solutions (h
Slide 25: Big Data: The Automation Of Knowledge Work
Big Data: The Automation Of Knowledge Work • As the mining experience demonstrates, massive datasets challenge our basic assumptions about the value of data • When ‘n’ is exceptionally large, enormous value can be extracted from data where individual bytes appear worthless • The ability to process v
Slide 26: Big Data: The Automation Of Knowledge Work
Big Data: The Automation Of Knowledge Work • As the mining experience demonstrates, massive datasets challenge our basic assumptions about the value of data • When ‘n’ is exceptionally large, enormous value can be extracted from data where individual bytes appear worthless • The ability to process v
Slide 27: New Cycles Challenge The Value Of Incumbency
New Cycles Challenge The Value Of Incumbency Source: Bloomberg Source: Bloomberg Source: Bloomberg Source: Bloomberg. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made withi
Slide 28: New Cycles Challenge The Value Of Incumbency
New Cycles Challenge The Value Of Incumbency “The Innovator’s Dilemma” How low-end disruption occurs over time “This…is about the failure of companies to stay atop their industries when they confront certain types of market and technological change. It's not about the Performance failure of simply a
Slide 29: New Cycles Challenge The Value Of Incumbency
New Cycles Challenge The Value Of Incumbency Global Technology M&A avg. premiums: 1995 – 20131 Select M&A activity2 Date Target Acquirer Premium Value $m 60% Dec-11 SuccessFactors SAP 52% 3,368 Dec-11 Blue Coat Systems Private equity 52% 837 50% Feb-12 Taleo Oracle 25% 1,838 40% May-12 Ariba SAP 19%
Slide 30: New Cycles Challenge The Value Of Incumbency
New Cycles Challenge The Value Of Incumbency US Technology sector (weighted) 1969 - present US Technology sector (un-weighted) 1969 - present Source: Piper Jaffray, August 2013. For non-US investor use only. Please refer to the Important Information at the end of this presentation. 30
Slide 31: PCT Positioning As At 31 July 2013
PCT Positioning As At 31 July 2013 Sector and geographic exposure (%) Market cap exposure (%) Software 21.0% Semiconductors & Semiconductor Equipment 20.0% Internet Software & Services 16.1% Computers & Peripherals 11.7% Large (greater than US$10bn) 68.2% Communications Equipment 9.8% Medium (US$1bn
Slide 32: PCT Positioning As At 31 July 2013
PCT Positioning As At 31 July 2013 Largest overweights Largest underweights Market cap exposure versus benchmark1 Amazon Apple Check Point Software Tech Broadcom Citrix Systems Canon Large-cap -11.10% Ebay Cisco Systems Facebook Dell Harman International EMC Hirose Electric Hewlett-Packard Impax Env
Slide 33: Outlook
Outlook • Productivity likely to remain a corporate focus given muted recovery • We remain constructive on markets, although volatility likely to persist – aligned interests / undemanding valuations / strong balance sheets • Our conviction in a new technology cycle continues to increase – pace of in
Slide 34: Appendix
Appendix For non-US investor use only. Please refer to the Important Information at the end of this presentation. 34
Slide 35: Apple
Apple • Our largest position at c.7.3% of NAV, but our largest underweight position versus the benchmark1 • Positives: product pipeline, ecosystem, IP position, valuation / balance sheet / dividend • Negatives: smartphone penetration > 42%, additional share gains get more difficult2 • Likely to reta
Slide 36: 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
Slide 37: Important Information Cont.
Important Information Cont. Polar Capital 4 Matthew Parker Street London SW1H 9NP Regulatory Status This document is Issued in the UK by Polar Capital. Polar Capital LLP is a limited liability partnership number OC314700. It is authorised and regulated by the UK Financial Conduct Authority (”FCA”) a
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