Slide 1: Pacific Current Full Year Results Highlights
31 August 2016 PACIFIC CURRENT FULL YEAR RESULTS HIGHLIGHTS PAC underlying NPAT of A$11.6m for FY16; Net loss of A$48.2m, includes significant non-recurring expenses including an impairment charge of A$77.5m primarily related to continued FUM losses at Seizert and changes to carrying values at s
Slide 2: Operational Results
A review of the portfolio companies owned by the Aurora Trust resulted in the carrying values of investments being affected by an impairment charge of A$119m in the Aurora Trust result (this includes the impairments disclosed at the half year of $21m), which therefore affected the PAC result by A$77
Slide 3: Portfolio and FUM Update
On 4 January 2016, the Company achieved significant deleveraging of the business through the repayment of A$62m of external debt which has reduced the Company’s interest expense and increased financial flexibility. PORTFOLIO AND FUM UPDATE Despite continued market volatility during the year, Core bo
Slide 4: Summary of the Profit and Loss
SUMMARY OF THE PROFIT AND LOSS FOR THE FULL YEAR ENDING 30 JUNE 2016 A$000’s FY16 FY15 % change Total Revenue 5.6 6.7 (16) Share of equity accounted investments (78.5) (4.6) 1,606 Expenses 5.2 7.3 (29) Underlying Net Profit After Tax 11.6 16.6 (30) Underlying earnings per share (cents) 41.5 64.8 (36
Slide 5: Conference Call
CONFERENCE CALL Investors and analysts are invited to participate in a conference call today (31 August 2016) at 11.00am AEST to be hosted by Pacific Current Chairman Mike Fitzpatrick, President, North America & Global CIO, Paul Greenwood, Chief Operating Officer, Joe Ferragina, and Executive Direct
Slide 6: Full Year Results
31 August 2016 FULL YEAR RESULTS Presenters A S X : PA C Paul Greenwood, President North America and Global CIO Joseph Ferragina, COO & Finance Director Tony Robinson, Executive Director
Slide 7: Disclaimer
Disclaimer The information in this presentation is general information about Pacific Current Group and is current only at the date of this presentation. In particular, this presentation: ❯ is not an offer or recommendation to purchase or subscribe for securities in Pacific Current Group Limited, nor
Slide 8: Agenda
Agenda 1. Overview 2. Portfolio Performance 3. FUM Analysis 4. PAC FY16 Statutory & Underlying Profits 5. Trust P&L and Balance Sheet 6. Summary 7. Q & A ASX: PAC // 3
Slide 9: Overview
1 OVERVIEW ASX: PAC // 4
Slide 10: Overview
Overview ❯ Quality assets – Strong progress toward repositioning portfolio into higher growth segments of asset management market ❯ Strong industry dynamics – Highly profitable, growing industry, with abundant opportunities ❯ Secular headwinds – A small number of portfolio facing growing headwinds ❯
Slide 11: Review of FY2016
Review of FY2016 A Challenging year but strong progress has been made ❯ FY2016 Challenges • Difficult year with FUM decline in a small number of boutiques creating impairments and non-recurring items affecting PAC results • Total impairment charge of A$119m at Aurora Trust from adjustments to the ca
Slide 12: Understanding Our Financial Results
Understanding Our Financial Results ❯ Pacific Current (PAC) is a listed corporation that owns 65% of the Aurora Trust (“Trust” or “Aurora”), which was established as a result of the merger between Treasury Group and Northern Lights Capital Partners in November 2014 ❯ Trust results reflect those rela
Slide 13: Financial Results Summary
Financial Results Summary FY 2016 FY16 FY15 % change PAC Statutory (loss)/profit ($48.2m) $135.7m n/a Underlying profit $11.6m $16.6m* (30.0%) Total dividends 25.0cps 52.0cps (51.9%) Trust Statutory (loss) ($120.4m) Underlying profit $6.8m One-off expenses $143.0m One-off gain $15.8m * FY15 underlyi
Slide 14: Operational Results
Operational Results ❯ Results were impacted by write downs, interest charges and other non-labour costs which will not carry through into 2016/17 ❯ Aggregate FUM of A$50.4bn as at 30 June 2016 – up A $1.5bn or 3.0% primarily due to strong market returns ❯ Strong performance from Core boutiques: Aper
Slide 15: Progress on Strategic Plan
Progress on Strategic Plan 1 Simplify business and › Discussions progressing with relevant parties to simplify PAC structure business structure › Sale of several smaller boutiques being contemplated; sale of Octis and Orion completed 2 Further diversify into › A$44m investment in Aperio Group LLC (“
Slide 16: Portfolio Update
2 PORTFOLIO UPDATE ASX: PAC // 11
Slide 17: Core Boutiques
Core Boutiques Core Boutiques FUM as at 30 June 2016 A$41.12b* Revenue A$138.2m Contribution to Aurora A$24.6m Trust earnings Share of earnings to A$16.0m Pacific Current * FUM of private equity funds is based on capital commitments to each fund and does not reflect and return of capital to-date ASX
Slide 18: Core Boutiques
Core Boutiques ASSET GROWTH* 1,120 » Invested at firm inception in 2008, zero FUM 898 898 » 2010 closed on Fund I of US$127 million » 2012 closed on Fund II of US$303 million 430 430 » 2013 closed on Fund III and related fund of US$179 million » 30 June 2016 FUM of US$1.12 billion 30-Jun-12 30-Jun-1
Slide 19: Growth Boutiques
Growth Boutiques Growth Boutiques FUM as at 30 June 2016 A$6.68b* Revenue A$23.6m Contribution to Aurora A$0.7m Trust earnings Share of earnings to A$0.5m Pacific Current * FUM of private equity funds is based on capital commitments to each fund and does not reflect and return of capital to-date. AS
Slide 20: Growth Boutiques
Growth Boutiques 259 » Invested in existing firm in 2014, FUM of approximately US$3 million 159 » Secured anchor investor (SEI) in 2014 and initiated global distribution 135 effort » 30 June 2016 FUM of US$0.26 billion 30-Jun-14 30-Jun-15 30-Jun-16 325 » Invested in existing firm in 2014 to launch n
Slide 21: Other Boutiques
Other Boutiques Other Boutiques FUM as at 30 June 2016 A$2.56b Revenue A$14.3m Contribution to Aurora A$0.1m Trust earnings Share of earnings to A$0.1m Pacific Current ASX: PAC // 16
Slide 22: FUM Analysis
3 FUM ANALYSIS ASX: PAC // 17
Slide 23: Translating the Aurora Trust Portfolio
Translating the Aurora Trust Portfolio Total Contribution to Total FUM Total Revenue Earnings Core Boutiques $41.12b $138.2m $24.6m Growth Boutiques $6.68b $23.6m $0.7m Other Boutiques $2.56b $14.3m $0.1m TOTAL: $50.36b $176.1m $25.4m Total Portfolio FUM: $50.36b Total Portfolio Earnings to Aurora:
Slide 24: PAC FY16 Statutory & Underlying Profits
4 PAC FY16 STATUTORY & UNDERLYING PROFITS ASX: PAC // 19
Slide 25: Review of FY16 Results
Review of FY16 Results PAC Statutory P&L for twelve months to 30 June 2016 PAC ❯ Statutory PAC Profit and loss primarily reflects Statutory P&L Highlights (A$m) share of profit and loss from Aurora Trust, the FY16 business operations of the Group Revenue 5.6 ❯ Aurora Trust impacted by impairment cha
Slide 26: Significant Non-recurring Items
Significant Non-recurring Items Impairment charges, non-labour costs incurred as a result of restructure PAC P&L (A$m) FY16 ❯ All non-recurring items are PAC’s share of PAC Statutory (Loss) After Tax (48.2) expense/gain from Aurora Trust Gain on sale/revaluation/acquisition/deemed disposal of (10.4)
Slide 27: Financial Strength and Dividends
Financial Strength and Dividends Total dividends for the year 25 cps Dividends: 60 ❯ Final dividend of 5 cps fully franked 52 50 ❯ Payout ratio of 60% aggregated underlying NPAT 50 Balance Sheet: 40 40 ❯ Reduction of gearing during the year 34 34 ❯ Comfortable gearing ratios provide platform for gro
Slide 28: Trust P&L and Balance Sheet
5 TRUST P&L AND BALANCE SHEET ASX: PAC // 23
Slide 29: Aurora Trust – P&L
Aurora Trust – P&L Aurora Trust: analysis of current year statutory results ❯ Revenue includes service fee revenue P&L Highlights (A$m) Aurora FY16 ❯ Prior year comparisons omitted due to merger distortions Revenue 6.6 Gain on sale of investments 15.8 ❯ Gain on sale of investments include gain on Sh
Slide 30: Aurora Trust – Underlying P&L
Aurora Trust – Underlying P&L Significant non-recurring items Aurora P&L (A$m) FY16 ❯ Gain on sale for FY16 reflects profit on sale of Aurora (Loss) After Tax (120.4) RARE Less: ❯ Transaction costs incurred at RARE corporate level Gain on sale/revaluation/acquisition/deemed as well as incurred by Au
Slide 31: Aurora Trust – Balance Sheet
Aurora Trust – Balance Sheet Strength provides opportunities Balance Sheet – Aurora Trust ❯ $14.8m of surplus cash available at 30 June 2016, FY16 (A$m) providing balance sheet flexibility Current Assets 30.9 ❯ Repayment of Medley debt of $62m and investment in Non-Current Assets Aperio of $21m Inve
Slide 32: Details of Non-Current Liabilities
Details of Non-Current Liabilities Amount Name Maturity Notes (Face Value) Class X Redeemable US$42m Nov ’16 Unit holder debt, contingent on value of Preference Units* certain NL boutiques achieving profit targets by 2021. Conditional finance obligation in Nov ’16. Relevant boutiques include EAM, Bl
Slide 33: Financial Results of Boutiques
Financial Results of Boutiques Illustrative aggregation of portfolio P&L if all boutiques were 100% owned ❯ Excludes Aurora management and operating costs Aggregate P&L for Boutiques (A$m) FY16 FY15 and interest expense Year end FUM (A$bn) 50.4 34.8 ❯ Employee and other expenses exclude RARE transac
Slide 34: Summary
6 SUMMARY ASX: PAC // 29
Slide 35: Summary
Summary FY17 expected to be more positive after a challenging year for the group ❯ Have delivered on plan to repay debt, redeploy RARE proceeds, and find synergies ❯ Focus continues on group restructure and simplification ❯ New executive team established to oversee a number of strategic initiatives
Slide 36: Q&A
7. Q&A ASX: PAC // 31