Polar Capital Holdings Plc · LSE:POLR
Polar Capital — H1 2015 Earnings Presentation
22 slides from Polar Capital's earnings presentation, December 2014
Slide 1: Results Presentation December 2014
Results Presentation December 2014 Tim Woolley (CEO) John Mansell (COO) This presentation is for one-on-one use with non-US professional investors only www.polarcapital.co.uk
Slide 2: Financial Review Highlights
Financial Review Highlights • AUM – AUM at 30 September 2014 increased to US$13.4bn from US$13.2bn at 31 March 2014 – AUM at 30 November 2014 US$13.2bn • Profitability and EPS – Pre-tax (pre SBP) profits up to £12.7m (2013: £10.6m) – Core operating profit excluding performance fees £13.9m (2013: £10
Slide 3: Polar Capital AUM: Significant AUM growth but not linear
Polar Capital AUM Significant AUM growth but not linear 16 14 $13.7 $13.2 $13.4 $13.2 $13.0 12 $11.4 10 $9.2 $bn 8 $7.2 $6.0 6 $5.1 $5.1 $5.3 $3.9 $4.2 4 2 0 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Nov-14 Japan Non-Japan Source: Polar Capital, 28 No
Slide 4: AUM Growth Analysis
AUM Growth Analysis 30 Sep 2013 30 Sep 2014 % Increase US$’m US$’m Year on Year Japan 4,914 5,300 8% Long Only (ex Japan) 5,360 7,139 33% Technology 1,488 1,899 28% Healthcare 794 1,170 47% Financials 975 979 0% GEMs 749 972 30% North America 1,321 2,024 53% Global Alpha 33 95 186% Absolute Return F
Slide 5: AUM Flows
AUM Flows AUM at 31 March 2013 $7.2bn Gross inflows Total [long 8,725 hedge 199] $8,924m Gross outflows Total [long 3,812 hedge 170] $(3,982)m Net flows $4,942m Closure of UK team $(293)m Performance and currency movements $1,392m AUM at 31 March 2014 $13.2bn Gross inflows quarter 1 [long 1,013 hedg
Slide 6: AUM Analysis
AUM Analysis AUM split by strategy – September 2014 AUM split by business unit – September 2014 Japan 39.5% North American 15.1% Technology 14.1% Healthcare 8.7% Financials 7.3% Long Only 92.7% Emerging Markets 7.2% Alternative 7.3% European 5.7% Global Convertibles 1.5% Global 0.7% UK Absolute Retu
Slide 7: Is Our Diversification Strategy Working? Not at the moment!
Is Our Diversification Strategy Working? Not at the moment! March March March September November 2012 2013 2014 2014 2014 Technology 29% 17% 14% 14% 15% Japan 30% 33% 43% 40% 35% Europe 12% 10% - - - North America - - 13% 15% 16% Total 71% 60% 70% 69% 66% Number of teams 10 11 9 11 11 Number of team
Slide 8: Fund Capacity
Fund Capacity Strategies AUM 30 September 2014 Capacity 2001 Technology $1.9bn $2bn+ 2001 Japan $5.3bn $6bn+ 2003 Europe $0.8bn $1bn+ 2007 Healthcare $1.1bn $1.5bn+ 2010 Financials $1.0bn $2.5bn+ 2010 Convertibles $0.2bn $1bn+ 2010 Emerging Markets $1.0bn $2bn+ 2011 North America $2.0bn $3bn+ 2012 G
Slide 9: Lipper Figures For Long Only Strategies
Lipper Figures For Long Only Strategies 28 November 2014 3 months 6 months 1 year 3 years 5 years Since inception Strategies Quartile Quartile Quartile Quartile Quartile Quartile Japan 1 4 4 4 4 2 (Institutional JPY) 19/10/2001 Japan Alpha 2 3 3 4 n/a n/a (Retail USD) 31/10/2012 Healthcare Opportuni
Slide 10: Alternative Strategies
Alternative Strategies 28 November 2014 Annualised returns Strategies Inception date YTD 3 years 5 years Inception Forager (AX EUR) 1 August 2003 4.50% 9.28% 8.40% 10.89% Conviction (EUR) 1 April 2006 1.49% 3.42% 3.89% 5.75% ALVA (A USD) 1 November 2010 0.49% 6.40% n/a 5.88% Global Convertibles (Cla
Slide 11: Distribution Team of 23
Distribution Team of 23 Global Head of Distribution Secretarial Support Head of International Business Development North America EMEA Global Banks Institutional UK Sales Manager, Third Party Sales Sales Manager Global Head of Institutional Consultant Head of UK Discretionary (3 Partners) (France, It
Slide 12: Investor Mix
Investor Mix Investor mix by geography Investor mix by holdings Bank 38.1% UK 55.0% Private Wealth Manager 15.1% Europe 39.5% Polar Capital Investment Company 13.0% Fund of Funds 9.7% USA 1.2% Asset Manager 9.6% Other 4.3% Platform 5.2% Family Office 1.6% Insurance Company 1.4% Pension Fund/Foundati
Slide 13: Goals and Strategy
Goals and Strategy Goals • To be a leading global investment management boutique • To be a strong dependable partner to our clients offering them a range of interesting and differentiated investment products • To deliver first quartile performance over the investment cycle • To maintain a robust ope
Slide 14: Profitability – by period
Financial Review Profitability – by period 6 months 6 months Year 6 months to September 13 to March 14 to March 14 to September 14 Average AUM US$9.3bn US$12.5bn US$10.8bn US$13.4bn Core operating profit £10.4m £14.2m £24.6m £13.9m Performance fee profit - £7.6m £7.6m - Interest and similar income £
Slide 15: Margin analysis – 6 month periods
Financial Review Margin analysis – 6 month periods 6 months 6 months 6 months 6 months to March 13 to September 13 to March 14 to September 14 Average AUM US$6.2bn US$9.3bn US$12.5bn US$13.4bn Change (relative) +50% +34% +7% Core operating profit £5.8m £10.4m £14.2m £13.9m Change (relative) +79% +36
Slide 16: Financial Review Costs
Financial Review Costs 6 months 6 months Year 6 months to September 13 to March 14 to March 14 to September 14 Comments Salaries and bonuses £7.9m £8.0m £15.9m £8.5m Increase in staff numbers Core distributions £6.9m £9.8m £16.7m £9.2m Decrease in Japan profits Core compensation £14.8m £17.8m £32.6m
Slide 17: Financial Review Other operating costs
Financial Review Other operating costs 6 months 6 months Year 6 months to September 13 to March 14 to March 14 to September 14 IT £1.5m £1.8m £3.3m £2.1m Rent and rates £0.7m £0.7m £1.4m £0.8m Professional fees £0.4m £0.4m £0.8m £0.4m Insurance £0.2m £0.2m £0.4m £0.3m Travel and entertainment £0.5m
Slide 18: Financial Review Investment positions and profits
Financial Review Investment positions and profits 6 months to September 2013 12 months to March 2014 6 months to September 2014 Investments & hedging Investments & hedging Investments & hedging Realised Unrealised Realised Unrealised Realised Unrealised Value at profit / profit / Value at profit / p
Slide 19: Financial Review Dividend
Financial Review Dividend • First dividend payable January 2015 5.5p (2014: 4.0p) – Dividend half of first half’s core earnings – Relative increase in first dividend provides no guidance in respect of second dividend – Total dividend will be predicated on total core earnings and performance fees rec
Slide 20: Financial Review Shareholder analysis at 30 September 2014
Financial Review Shareholder analysis at 30 September 2014 Holding Percentage Directors, founders and staff 27.7m 31% Caledonia 8.0m 9% XL 7.0m 8% EBT 1.5m 2% Blackrock 6.5m 7% Hargreave Hale 5.0m 6% Free Float = 50% Others 32.6m 37% Total shares in issue 88.3m 100% At Share Price of £5.00 £6.00 Dil
Slide 21: Summary: Well positioned for long-term growth
Summary Well positioned for long-term growth Funds and • Expanded and differentiated product offering performance • Good performance across a wide range of funds • Significant potential for further growth Fund capacity • Total current capacity in the funds of > US$26 billion of which at the end of N
Slide 22: 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
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