Regal Asian Investments Limited · ASX:RG8
Regal Asian Investments — VGI Partners Global Investments — Investor Presentation (October 2022)
30 slides from Regal Asian Investments's investor presentation, Oct 20, 2022
Slide 1: VG1 Investor Update Presentation ASX announcement
VGI Partners Global Investments Limited ABN 91 619 660 721 39 Phillip Street Sydney NSW 2000 Australia T. +61 2 9237 8923 www.vgipartners.com/lics/vg1 20 October 2022 ASX Market Announcements Office ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 VG1 Investor Update Presentation VGI Par
Slide 2: Authorised for release and investor contact information
Authorised for release by: Ian Cameron, Company Secretary Investor contact information: Ingrid Groer, CFA VGI Partners Global Investments Limited Phone: 1800 571 917 (inside Australia) +61 2 9237 8923 (outside Australia) Email: investor.relations@vgipartners.com 2
Slide 3: VGI Partners Global Investments Limited (ASX: VG1)
VGI Partners Global Investments Limited (ASX: VG1) 20 October 2022
Slide 4: Disclaimer
Disclaimer This document (Information) is provided by Regal Partners Marketing Services Pty Ltd (ACN 637 448 072) (Regal Partners Marketing), a corporate authorised representative of Attunga Capital Pty Ltd (ABN 96 117 683 093) (AFSL 297385) (Attunga). Regal Partners Marketing and Attunga are busine
Slide 5: Speakers
Speakers Robert Luciano Marco Anselmi Brendan O’Connor Rebecca Fesq Chief Investment Officer Portfolio Manager Chief Executive Officer Head of Client Business VGI Partners VGI Partners Regal Partners Regal Partners
Slide 6: Agenda
Agenda 1 Introduction to Regal Partners Limited Brendan O’Connor 2 Market Observations & VG1 Portfolio Update Robert Luciano & Marco Anselmi 3 Q&A All speakers
Slide 7: Introduction to Regal Partners Limited (ASX:RPL)
Introduction to Regal Partners Limited (ASX:RPL) 5
Slide 8: Regal Partners Limited: ASX-Listed Specialist Alternatives Manager
Regal Partners Limited (ASX:RPL) ASX-Listed Specialist Alternatives Manager Regal Partners Limited is an ASX-listed, specialist alternative investment manager with approximately A$5.4bn in funds under management1. • Regal Partners (ASX:RPL) was formed on 3 June 2022, following the merger of ASX-list
Slide 9: Exceptional investment capabilities across a range of alternative asset classes
Exceptional investment capabilities across a range of alternative asset classes Regal Funds is a multi- VGI Partners is a global, Kilter Rural2 offers private Attunga Capital2 offers award-winning specialist high conviction long-short market exposure to private market exposure to alternatives invest
Slide 10: Market Observations & VG1 Portfolio Update
Market Observations & VG1 Portfolio Update
Slide 11: Broad observations: Macro warning signs
Broad observations Macro warning signs Declining bond liquidity Sharp FX moves Credit spreads widening Bloomberg UK and US govt securities liquidity indices DXY Index US corporate BBB – 10 yr Treasury spread (Average yield error) (Weekly index level) (%) 7.5% US UK 120 2.50 7.0% 6.5% Under stressed
Slide 12: Broad observations: Macro warning signs
0 5 10 15 20 25 30 35 40 45 50 2011Q1 2011Q2 Source: Goldman Sachs. 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 Broad observations Macro warning signs 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 More than 40% of SPX option volu
Slide 13: Broad observations: Long and short positioning
Broad observations Long and short positioning Longs: market dislocations can create attractive VGI Partners Global Investments – Historical Short Exposure opportunities Shorts: Continue to have more short on than 60% historically as uncertainty warrants cautiousness, 50% but increasingly seeing bett
Slide 14: Broad observations: Foreign exchange
Broad observations Foreign exchange AUD/USD since 2008 – The portfolio remains fully hedged to AUD with any strengthening to benefit portfolio performance 1.20 Onset of Latest GFC COVID-19 tightening cycle 1.10 1.00 0.90 0.80 0.70 0.60 Oct-08: 0.67 Mar-20: 0.61 Oct-22: 0.62 0.50 2008 2009 2010 2011
Slide 15: Global Portfolio as at 30 September 2022
Global Portfolio as at 30 September 2022 Top 10 Long Investments Sector % of Portfolio Overview eCommerce & Internet 15% Global e-commerce, dominant cloud computing; reinvestment enhancing moat World’s largest derivatives exchange; monopoly in interest rate derivatives; beneficiary Exchanges & Fin S
Slide 16: Recent Notable Portfolio Changes Amongst Top 10 Holdings
Recent Notable Portfolio Changes Top 10 Long Investments1 % of Portfolio Change in Position Size Amongst Top 10 Holdings 15% — Increased position size: CME, SAP, Deutsche Boerse 11% Decreased position size: MasterCard 8% — Exited positions: Olympus, Twitter 7% New addition: Schlumberger 6% 6% — 5% O
Slide 17: Core Long Position
Core Long Position: Current valuation is largely underpinned by Amazon Web Services (AWS) Significant value beyond AWS which market is attributing little-to-no value #1 e-commerce retailer globally; #1 US retailer AWS is a key beneficiary of Enterprise IT’s ongoing shift to the cloud by Gross Mercha
Slide 18: Core Long Position
User Growth: early signs of stabilisation Global Monthly Active Users (MAUs) (m) Core Long Position: 600m 500m Unique platform at the intersection of search and social media with a global active user 400m base of 430m users 300m Highly under-monetised platform relative to the purchase intent signal
Slide 19: New Position
New Position: Highly profitable digital business with significant potential #1 global oil field services provider in a highly consolidated industry structure Digital & Integration Segment - EBIT Margins 55% Favourable end-market dynamics with multi-year upstream capex cycle globally after a decade o
Slide 20: Exited Positions: Olympus & Twitter
Exited Positions: Olympus & Twitter Olympus (7% position) Management executing well but thesis has largely played out and the stock reached our valuation target Twitter (5% position) Held onto position despite noise around merger break – due diligence on deal structure and legal outcomes provided co
Slide 21: New Opportunities: European Industrials and US Software
New Opportunities: European Industrials and US Software European Industrials Opportunities arising with many high-quality businesses on sale due to concerns around European recession US Software Large de-rating + concerns on IT spend pressure valuations starting to look highly attractive in high-q
Slide 22: Short Portfolio
Short Portfolio VG1 short attribution calendar YTD: +13% VGI Partners Master Fund – Historical Short Exposure Continue to see attractive short opportunities More short exposure than historically uncertainty warrants 60% cautiousness; but increasingly the better risk/reward 50% opportunities are st
Slide 23: Short Position – US Auto Dealers
US Auto Dealer Profitability Short Position – US Auto Dealers Public group adjusted earnings per dealership Thesis: abnormally high profitability to come under pressure as supply normalizes and demand falls due to lower credit availability Consumer pressure pressure on large ticket items (cars) Hi
Slide 24: Short Position – Container Shipping
Short Position – Container Shipping Spot container rates are collapsing back towards pre-COVID-19 levels as Unprecedented supply of new container ships, ordered during COVID-19, goods demand shifts back to services and inventory rebuild slows. are set to arrive over coming years bringing further dow
Slide 25: Questions
Questions Robert Luciano Marco Anselmi Brendan O’Connor Rebecca Fesq Chief Investment Officer Portfolio Manager Chief Executive Officer Head of Client Business VGI Partners VGI Partners Regal Partners Regal Partners
Slide 26: VGI Partners Global Investments Limited (ASX: VG1)
VGI Partners Global Investments Limited (ASX: VG1) 20 October 2022
Slide 27: Appendix
VGI PARTNERS Global Investments Appendix
Slide 28: Portfolio Construction Process
Portfolio Construction Process Identify unique businesses Analyse Build portfolio Earnings growth is the driver of stock Build detailed model using VGI Concentrated long investments: performance – we call businesses with Partners’ proprietary template Typically, top 5 holdings consistent earnings gr
Slide 29: VG1 Performance and Portfolio as at September 2022
VG1 Performance and Portfolio As at 30 September 2022 Long Portfolio by Sector Return Period Portfolio (Net Return) 3 Months (3.3%) eCommerce & Internet 34% 1 Year (22.8%) Exchanges & Financial Services 19% Since Inception (p.a.) (0.0%) Information Technology 14% Luxury 10% Gaming & Entertainment 9%
Slide 30: VG1 Investment Guidelines
VG1 Investment Guidelines Exposure Number of Long Investments Typically 10-25 (10-15 Core) Concentration of Long Investments Top five 40-50% of NAV on average Average Size of Long Investments Start at 1-3% and build to 4-10% of Portfolio’s NAV Single Security Long Investment Limit 15% at purchase; m
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