Slide 1: Pacific Current Group Full Year Results
Page 1 of 39 33° 51' 50.457" S, 151° 12' 23.437" E Level 29, 259 George Street, Sydney NSW 2000 T: +61 2 8243 0400 // F: +61 2 8243 0410 30 August 2019 PACIFIC CURRENT GROUP FULL YEAR RESULTS Year ended 30 June 2019 Pacific Current Group (ASX: PAC, “Pacific Current”) is pleased to report the Company
Slide 2: Summary of Financial Results
Page 2 of 39 33° 51' 50.457" S, 151° 12' 23.437" E Level 29, 259 George Street, Sydney NSW 2000 T: +61 2 8243 0400 // F: +61 2 8243 0410 During the year PAC exited three successful investments. The Company sold its 23.4% interest in Aperio for approximately US$72m (A$101.6m), having acquired the sta
Slide 3: Conference Call
Page 3 of 39 33° 51' 50.457" S, 151° 12' 23.437" E Level 29, 259 George Street, Sydney NSW 2000 T: +61 2 8243 0400 // F: +61 2 8243 0410 CONFERENCE CALL Investors and analysts are invited to participate in a conference call on Monday, 2 September 2019 at 9:00am AEST. The call will be hosted by Pacif
Slide 4: FY2019 Results
Page 4 of 39 F Y 2 0 1 9 R E S U LT S For the full-year ended 30 June 2019 PRESENTERS: Paul Greenwood, CEO & CIO Ashley Killick, CFO ASX : PAC Tony Robinson, Chairman
Slide 5: Agenda
Page 5 of 39 Agenda 1. Overview 2. Portfolio Update 3. Q & A 4. Appendices // 2
Slide 6: Overview
Page 6 of 39 OVERVIEW
Slide 7: FY19 Strategic Goals
Page 7 of 39 FY19 Strategic Goals ❯ In FY19 PAC’s primary focus was on the following: • Reshape portfolio to make it less vulnerable to market shocks and more aligned with long-term trends in asset allocation • Facilitate growth in our portfolio companies • Improve investor understanding of PAC and
Slide 8: Overview – FY19 Highlights
Page 8 of 39 Overview – FY19 Highlights ❯ Financial Results – Significant growth in underlying profits ❯ Portfolio Growth – Rapid FUM growth, with solid investment performance during the year ❯ Portfolio Management – Busy year with three divestments, three new investments, and one increased stake ❯
Slide 9: FY19 Financial Results Summary
Page 9 of 39 FY19 Financial Results Summary FY19 FY18 Change Adjusted FUM at 30 June2 A$50.9b A$33.7b +51.2% Underlying net profit before tax3 A$27.4m A$18.3m +49.7% Underlying net profit after tax3 A$20.6m A$18.3m +12.6% Underlying EPS4 A$0.43 A$0.38 +12.6% Dividends per share A$0.25 A$0.22 +13.6%
Slide 10: Overview - Portfolio Growth
Page 10 of 39 Overview - Portfolio Growth ❯ Portfolio Growth • Strong FUM growth, with 7 of 11 managers with FUM growing. GQG, Carlisle, Aether, and Roc experienced the most rapid growth • Active equity managers had a mixed year of performance, while private capital strategies generally fared well •
Slide 11: Overview – Portfolio Management Highlights
Page 11 of 39 Overview – Portfolio Management Highlights ❯ Investments Sold • Sold 23.4% stake in Aperio for approximately US$72m (A$101.6m) • Exercised “Put” option to sell remaining 10% stake in RARE for A$21.5m • Sold position in Celeste to management for A$1.6m ❯ New Investments • Purchased 24.9
Slide 12: Overview - Investment Opportunities
Page 12 of 39 Overview - Investment Opportunities ❯ Engaged in multiple late-stage discussions/negotiations, with additional capital likely to be deployed in the near term ❯ Deal flow remains robust, with over 140 deal opportunities reviewed in FY19 ❯ We continue to emphasize firms with private capi
Slide 13: Portfolio Update
Page 13 of 39 P O R T F O L I O U P D AT E
Slide 14: Boutique Results
Page 14 of 39 Boutique Results Tier 1 Boutiques Tier 2 Boutiques FY19 FY18 Change FY19 FY18 Change FUM as at 30 June A$47.6b A$58.8b -18.9% FUM as at 30 June A$9.8b A$16.3b -39.5% Adjusted FUM as at 30 June1 A$41.0b A$24.1b +70.2% Adjusted FUM as at 30 June1 A$9.8b A$9.5b +3.3% PAC Share of profits
Slide 15: Portfolio - Performance
Page 15 of 39 Portfolio Company Update - Performance ❯ Private Capital Strategies • Characterizing private equity performance (Roc and Aether) is always difficult, but results appear consistent with expectations • Carlisle and VPC have much less volatile results due to the underlying assets. Perform
Slide 16: Portfolio Company Update
Page 16 of 39 Portfolio Company Update FUM 30 June 2018 vs. 30 June 2019 (in each manager’s home currency) Tier 1 Boutiques Tier 2 Boutiques 30 7 13% Billions Billions 85% 6 25 5 20 4 15 3 10 2 5 9% -12% 1 -11% 2% 56% -24% 15% -79% 16% 0 0 Aether Carlisle * GQG Seizert Victory Alphashares Blackcrane
Slide 17: Portfolio Company Update
Page 17 of 39 Portfolio Company Update Quarterly FUM progress (excluding boutiques sold during the period) 70 Billions 60 +10% +13% 50 +4% +12% +6% 40 +10% +10% +19% 30 20 10 - 30/06/2017 30/09/2017 31/12/2017 31/03/2018 30/06/2018 30/09/2018 31/12/2018 31/03/2019 30/06/2019 Aether Carlisle Carlisle
Slide 18: FUM Roll Forward
Page 18 of 39 FUM Roll Forward A$m Total FUM as at 30 June Inflows / Outflows from Boutique Foreign Exchange Total FUM as at 30 June Net Flows Other 2018 Acquisitions/Divestments Movement 2019 Open End 67,589 (43,065) 12,823 4,657 2,526 44,530 Closed End 7,595 4,242 1,222 (314) 191 12,936 Total 75,1
Slide 19: Portfolio Analysis
Page 19 of 39 Portfolio Analysis Continued progress in making revenue stream more diverse and resilient FUM FUM 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% Public Equity Non-Public Equity Open End Closed End FY2018 FY2019 30-Jun-18 30-Jun-19 Source of PAC Revenues ❯ PAC’s reliance on public equi
Slide 20: Expanding PAC's Diversification
Page 20 of 39 Expanding PAC’s Diversification ❯ PAC has reduced its risk of equity market declines through diversification into more resilient cash flow streams and investment structure ❯ In FY19 roughly 33% of revenues had no direct link to equity markets ❯ A significant majority of FY20 revenues a
Slide 21: Q&A
Page 21 of 39 Q&A
Slide 22: Appendix A
Page 22 of 39 APPENDIX A
Slide 23: Overview of PAC Investments
Page 23 of 39 Overview of PAC Investments Tier 1 Boutiques Tier 2 Boutiques Diversified real assets China ETF index International and provider global equity Global and emerging markets equity International and Private infrastructure emerging markets small cap US equity Australian REIT Alternative en
Slide 24: Tier 1 Boutiques
Page 24 of 39 Tier 1 Boutiques Boutique: Equity Ownership: 100% PM / CIO: Sean Goodrich and Troy Schell Economics: 100% of excess management fee* FUM (30 June 19): US$1.5bn Final close of ARA V in July 2019, total commitments of Fund Flows: US$268m First Investment: Invested at firm inception in 200
Slide 25: Tier 1 Boutiques
Page 25 of 39 Tier 1 Boutiques Boutique: Equity Ownership: 5% equity PM / CIO: Rajiv Jain Economics: Equity and revenue share FUM (30 June 19): US$25.1bn Growing exceptionally rapidly in multiple geographies and Fund Flows: distribution channels First Investment: Invested at inception in June of 201
Slide 26: Tier 1 Boutiques
Page 26 of 39 Tier 1 Boutiques Boutique: Equity Ownership: 100% preferred equity, 50% common equity PM / CIO: David Collon, Edward Eberle Preferred profit share, reduced to pro rata after certain Economics: milestones FUM (30 June 19): US$2.3bn Fund Flows: Net outflows despite some new business wins
Slide 27: Tier 1 Boutiques
Page 27 of 39 Tier 1 Boutiques Boutique: Equity Ownership: 24.9% PM / CIO: Richard Levy and Brendan Carroll Economics: Equity share FUM (30 June 19): US$2.8bn Fund Flows: Flat since PAC investment but accelerating in 3Q19 First Investment: July 2018, FUM US$3.1bn Seeing heightened interest across th
Slide 28: Tier 1 Boutiques
Page 28 of 39 Tier 1 Boutiques Boutique: 16% of Gross Revenues and 40% in the event of Equity Ownership: sale/liquidation CEO / CIO: Jose Garcia and Tim Mol Economics: Revenue Share FUM (30 June 19): US$1.9bn Recently closed first private equity style fund raise of Fund Flows: US$230m First Investme
Slide 29: Tier 2 Boutiques
Page 29 of 39 Tier 2 Boutiques » Provides direct exposure to Chinese markets primarily through a series of China indexes » Revenue generated through an index licensing agreement » Equity ownership: 36%, Jun-19 FUM: US$124m » Active global and international equities manager » Equity ownership: 25%, J
Slide 30: Tier 2 Boutiques
Page 30 of 39 Tier 2 Boutiques » Private equity fund focused on alternative energy infrastructure and project development in India » Equity ownership 50%, FUM: n/a » Strategic partner and financial advisory business for private companies, hedge funds and private equity » Equity ownership: 29.9%, FUM
Slide 31: Appendix B
Page 31 of 39 APPENDIX B
Slide 32: FY19 Financial Results Summary
Page 32 of 39 FY19 Financial Results Summary FY19 FY18 1 Change ❯ Revenue from ordinary activities increased by 35.4% primarily attributable to the dividends from Revenue form ordinary activities A$62.9m A$46.4m +35.4% GQG, Carlisle, EAM and RARE. Net gains on investments A$72.5m A$103.0m -29.6% ❯ T
Slide 33: Statutory Profit & Loss
Page 33 of 39 Statutory Profit & Loss (A$m) FY19 FY18* Change ❯ Results include the revenues and expenses of operating subsidiaries (i.e. Seizert, Aether and SCI) Revenue 41.5 37.5 10.7% Other income 21.4 8.9 139.4% ❯ Impairment in FY19 primarily reflects write-down of Seizert Net gains on investmen
Slide 34: Statutory to Unaudited Underlying Reconciliation
Page 34 of 39 Statutory to Unaudited Underlying Reconciliation (A$m) FY19 FY18 Change ❯ Statutory results impacted by large abnormal items Reported NPBT 54.0 95.4 (43.5)% ❯ Impairment of investment in FY19 primarily relates Non-cash items to Seizert Impairment of investments 28.8 4.9 Share-based pay
Slide 35: Underlying Profit & Loss
Page 35 of 39 Underlying Profit & Loss (A$m) FY19 FY18 Change ❯ Restated P&L on a ‘look-through’ basis adjusted for one-off/non-cash items Revenue 7.6 9.7 -19.6% Gross employee expenses 10.1 9.6 5.2% ❯ Excludes non-recurring and/or non-cash items to Commission expenses 1.0 2.3 -58.3% show underlying
Slide 36: Statutory Balance Sheet
Page 36 of 39 Statutory Balance Sheet Book Value (A$m) 30 June 2019 30 June 2018 ❯ Reflects consolidation of Corporate Admin as well as operating subsidiaries (i.e. Aether, Seizert and Cash 80.2 130.1 SCI) Other Current Assets 22.4 20.3 Non-Current Assets ❯ Carrying values have been tested and/or ad
Slide 37: Alternate Balance Sheet
Page 37 of 39 Alternate Balance Sheet Book Value (A$m) 30 June 2019 30 June 2018 ❯ Reflects deconsolidation of operating subsidiaries (i.e. Aether, Seizert and SCI) Cash 68.3 122.2 Other Current Assets 17.0 12.9 ❯ Notable cash movements during the year, Current Liabilities (21.1) (30.9) ❯ Investment
Slide 38: Outlook FY20 – What should shareholders expect?
Page 38 of 39 Outlook FY20 – What should shareholders expect? ❯ Changes in earnings composition stemming from: • Increased contributions from VPC & Roc • Annualization of Carlisle investment • Deployment of significant capital • Reduced contributions from Seizert due to reduction in FUM • No Aperio
Slide 39: Disclaimer
Page 39 of 39 Disclaimer The information in this presentation is general information about Pacific Current Group (‘Pacific Current’ or ‘PAC’) 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 secur