Pacific Current Group Ltd · ASX:PAC
Pacific Current — FY2023 Earnings Presentation
40 slides from Pacific Current's earnings presentation, Aug 25, 2023
Slide 1: ASX Announcement: FY2023 Results
ASX ANNOUNCEMENT 25 August 2023 FY2023 Results - Investor Presentation & MD’s Overview Pacific Current Group Limited (ASX:PAC)(Pacific Current) attaches the following documents relating to Pacific Current’s FY2023 financial results: • FY2023 Results - Investor Presentation; and • Managing Director’s
Slide 2: Full Year 2023 Results Presentation
PACIFIC CURRENT GROUP FULL YEAR 2023 RESULTS PRESENTATION PRESENTERS Paul Greenwood Ashley Killick Managing Director, CEO and ClO CFO u 25 August 2023
Slide 3: 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 notan offer or recommendation to purchase or subscribe for securities in Pacific Curren
Slide 4: PAC is a global investor in investment management firms
Pacific Current Group (PAC) is a global investor in investment management firms, with stakes in 16 investment firms across the US, Europe, Australia and Asia. PAC’s boutiques offer a diverse range of investment products across multiple asset classes, delivering sustainable and growing management fee
Slide 5: Underlying Results
= FY23 FY22 | ~FY23 FY22 Comments n er yl n g ($m) (ASm) _| (Us$m) — (US$m) R : Ss u lts Boutique management fees 397 325 267 gag Ge nee Te aa Perse ewe Sec Boutique performance fees 12.2 145 82 10.5 Led by VPC, SCI, and Roc Boutique unrealised MTM an (12) ay (08) Noncash item, primarily related to
Slide 6: Boutique contributions by revenue type
30 26.7 24.8 25 23.7 23.6 20 15 10.5 10 8.2 6.6 5.1 5 3.3 3.0 2.9 1.9 0.9 - (1.0) (0.8) (1.1) (5) FY20 FY21 FY22 FY23 Management Fees Performance Fees Unrealized MTM Corporate Revenues
Slide 7: Fair Value vs Book Value
FAIR VALUE VS BOOK VALUE PACIFIC CURRENT GROUP
Slide 8: NAV vs Fair Value and NAV vs Share Price
NAV vs Fair Value NAV vs Share Price (per share) 8.40 AUD & # EE NAV/share EE FY Increment ‘on 11.92 11.09 1115 8.39 & 2 a rs - a cae Ss * s s Share Price IFRS requires PAC to use a variety of accounting treatments, resulting in some assets reported at fair value in PAC's statutory accounts, while o
Slide 9: Strategic Update
STRATEGIC UPDATE PACIFIC CURRENT GROUP
Slide 10: Strategic Transaction Process
Strategic Transaction TS is Considering ives following otential PACIFIC CURRENT GROUP In late July, Regal Partners announced that it had provided PAC with a NBIO to purchase PAC for A$10.77 per share (based on 24 July GQG stock price). GQG Partners announced it also intends to make an offer to acqui
Slide 11: Portfolio Update
PORTFOLIO UPDATE PACIFIC CURRENT GROUP
Slide 12: Boutique FUM growth
200% $642 150% $104,100 100% $1,412 $5,713 $2,964 $7,389 50% $1,478 $3,712 $7,778 $1,991 $1,545 0% -50%
Slide 13: FUM (US$b)
16 14.1 14 13.3 13.4 13.1 12.9 12.8 12.8 12 11.0 11.2 10.3 10.3 9.6 9.6 9.6 10 9.1 8.6 FUM (US$b) 8.0 7.8 8 6.9 6 4 2 - Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23
Slide 14: Fee margins in basis points
50 35 33.2 44.7 31.6 29.9 45 27.8 39.1 30 27.4 40 35.8 24.1 25.0 24.5 24.4 35 31.2 30.7 29.9 25 28.2 28.1 26.4 26.0 Basis Points 27.2 27.6 25.4 Basis Points 30 25.2 24.9 24.9 24.7 20 23.0 22.2 22.3 21.8 25 19.5 27.0 19.1 18.6 17.5 15 20 20.3 19.1 8.3 15 10.6 11.0 10.8 10 7.7 8.1 5.8 10 5.6 3.4 4.5 4
Slide 15: Boutique updates
PAC USA Inmarket with Aether Seed Fund | targeting USS250m - ss500m fund size Secured USS78m as of 30 June 2023, 30-Jun-20 30-Jun-21. 30-Jun-22 30-Jun-23 FUM (USS) GOG & Partners | USA GQG growth driven by exceptional track record since inception © Firm has maintained positive inflows despite dificu
Slide 16: Boutique updates continued
Global, international, & EM small cap equity 2 E AM. © 2014 investment USA to launch new investment vehicle in Australia in 2023 reconfiguration of different mandate with large clients 160 tab 14> 15> 30-Jun-20 30-Jun-21 30-Jun-22 30-Jun-23 FUM (USS) _ Private real estate [aS Penevencere 2019 invest
Slide 17: Outlook
OUTLOOK PACIFIC CURRENT GROUP
Slide 18: Operational Outlook
Operational @) ut | oo k Actively soliciting acquisition proposals from a broad group of high-quality prospective partners PAC expects its portfolio companies, ex GQG, to receive A$S2b-A$5b of gross new commitments in FY24 PAC intends to make at least one significant investment in 1H24 into a high g
Slide 19: Financial Outlook
Financial Outlook PACIFIC CURRENT GROUP PAC expects strong growth in boutique contributions (both management fees and performance fees) in FY24 due to: Growth in management fees from key boutiques, including Victory Park, Pennybacker, Roc, GQG, and IFP Annualisation of Cordillera investment Increase
Slide 20: Appendices
APPENDICES PACIFIC CURRENT GROUP
Slide 21: 12000 11000 10000 9000 8000 7000 6000 0 4 4000
12 12000 11 11000 10 10000 9 9000 8 8000 7 7000 6 6000 5 5000 4 4000
Slide 22: Statutory Profit or Loss
Statutory Profit ee -_ -_ Distributions and dividend income 27.293 22,418 or Loss Ofer ears 74 ws Changes in fair value (14,681) (66,741) 3 Total statutory income 30,913 (22,539) Results include thed@venues Employment expenses (15,832) (14,381) Impairment expenses (14,022) (4,182) Administration and
Slide 23: Statutory to Underlying Reconciliation
A$000s FY23 FY22 Reported NLBT (17,545) (48,186) Statutory to _ Underlying Titre ps ze Fair value adjustment of financial assets 17,904 Reconci | lation : ¥ Fair value adjustment of financial liabilities (3,223) 414 ie impairment of investments and financial assets 14,022 4,182 Share-based payment e
Slide 24: Underlying Profit Drivers
U n d e rl i n $000s FY23 (A$) FY22 (AS) FY23 (US$) FY22 (US$) y g Boutique contributions 50,213, 45,845 33,788 33,251 Profit Drivers Revenues 1,314 3,987 884 2,892 Employment 8,485 7.991 5710 5,796 Marketing/commissions 602 300 405 217 Ses : @ _Travel/entertainment 651 393 438 285 Underl ing NPBT F
Slide 25: Underlying Functional P&L Summary
~ Underlying Functional P&L Summary geo PACIFIC CURRENT GROUP AS000s FY23 FY22 Investment Sales Group Total Revenues Boutique contributions Management fees 39,661 39,661 32,523 Performance fees 12,211 12,211 14,476 Unrealised MTM (1,659) (1659) (1154) Boutique contributions 50,213, : : 50,213, 45,84
Slide 26: Balance Sheet
AS000s 30 June 23 30 Jun 22 Statutory Cash 23,201 34,886 Other current assets 20,854 12,116 Non-current assets . Balance Sheet investments in associates and joint ventures 189,715 195,117 intangible assets 41,388 54,315 x Other financial assets 324,893 304,785 2) Other assets 6,259 3,499 Reflects th
Slide 27: Alternate Balance Sheet
Alternate econts 30 Jun 23 30 Jun 22 Cash 16,095 23,480 Balance Sheet Other Current Assets 20,219 9342 Current Liabilities (4,956) (17,974) ‘ PAC's Investable Cash 31,358 14,848 Reflects.deconsolidation of [TOSSES S bsidiaries (Aether Subsidiaries 44,388 61,378 gee PAC ona Associates & Joint Venture
Slide 28: Cash Flow
A$000s FY23 FY22 Statutory Cash Operating cash flow F ] ow Net receipts from customers/suppliers/financiers (1,491) ~ Dividends received 33,762 ! Income tax paid (8,803) ma Investing cash flow dl Repayment of Hareon liability (17,638) (278) Net proceeds from disposal of associate/subsidiary 12,364 5
Slide 29: Alternate Cash Flow
Alternate Cash Flow Reconciles-the undéflying as generated lixelaa) iia PACIFIC CURRENT GROUP AS000s FY23 FY22 Underlying NPBT 31,692 35,385 Accounting earnings from boutiques (41,308) (35,005) Dividends from boutiques 46,014 33,762 Net interest expense 344 23 Depreciation and amortisation 693 508 C
Slide 30: PAC Boutique Investments: Aether and Astarte
Private equity, real assets 2008 investment USA Aether Investment Partners is an alternative investment manager sponsoring closed- end limited partnerships focused private investments in real assets § Primary sectors include natural resources and infrastructure § PAC owns a bottom-line profit share
Slide 31: PAC Boutique Investments: Carlisle and Cordillera
PAC Boutique Investments > Carlisle Life settlements 2019 investment Luxembourg Carlisle Management Company ("Carlisle") Is a Luxembourg-based firm focused on investments in life settlements, which is the sale of an existing life insurance policy for more than its cash surrender value but less than
Slide 32: PAC Boutique Investments: IFP and Nereus
PAC Boutiqu INDEPENDENT [rewanctan] PARTNERS Hybrid RIA platform 2019 investment USA Independent Financials Partners ("IFP”) is a hybrid Registered Investment Advisor (RIA) platform that secures and manages middle Office servicing relationships with RIAs § IFP utilises a proprietary platform to use
Slide 33: PAC Boutique Investments: Proterra, Roc, SCI
PROTERRA Private equity and private credit, natural resources 2019 investment USA Proterra Investment Partners (‘Proterra") manages private equity and private credit strategies focused on global natural resources § The investment team’s industry experience, dedicated emphasis on natural resources, a
Slide 34: Ownership-adjusted FUM
a Own ers h I Private Market FUM Ownership Boutique / Public Market (us$m) PAC Interest Adjusted FUM ‘Adjusted FUM —— _ ! Aether Private 1545 100.0% 1545 a3: Cl | I Banner Oak Private 7,389 35.0% 2,586 fa aE Carlisle Private 1991 40.0% 796 © Cordillera Private 1412 24.9% 362 2 GQG Partners Public 10
Slide 35: Key Definitions
Key Definitions Underlying Results/Earnings Unaudited and non-IFRS financial measures used by PAC management to reflect the recutring elements of PAC's business Boutique Contributions PAC's economic entitlement from portfolio company/boutique investments including Management Fees and performance fee
Slide 36: Understanding Fair Value NAV
Understanding Fair Value NAV The statutory consolidated financial statements have been prepared on the basis of historical cost, except for certain financial instruments that are measured at Fair Value at the end of each reporting period. As such, the Group’s investments in operating subsidiaries (s
Slide 37: Tips for Analysing PAC
Tips for Analysing PAC Revenue recognition § Private equity, private infrastructure, and private real estate managers normally charge fees on committed capital. Thus, new FUM becomes revenue immediately after the legal commitment is received, even though it may take several years to invest the commi
Slide 38: Managing Director's Financial Year Overview – FY23
Tacoma // Denver // Sydney // Melbourne Managing Director’s Financial Year Overview – FY23 I am pleased to offer a few observations and reflections on FY23 and what the future may hold for the Pacific Current Group. Market Environment The economic environment became more challenging in FY23, as surg
Slide 39: Portfolio Highlights
in active fundraising mode and PAC’s salesforce devoting significant time to securing external capital for PAC to manage. Portfolio Highlights PAC made a new US$30m investment in Cordillera Investment Partners (Cordillera) in April. Cordillera epitomizes many of the attributes we desire in our inves
Slide 40: Strategic review and independent board committee
In light of these developments, PAC hired UBS to help evaluate these offers and ensure we consider an appropriate breadth of potential partners. Additionally, given that some PAC board members are on GQG’s board and another is on the board of River Capital Pty Ltd (a financing partner for the Regal