Slide 1: Q2 2015 Earnings Presentation
Q2 2015 Earnings Presentation August 6, 2015
Slide 2: Disclaimer
Disclaimer Forward Looking Statements This presentation may contain forward looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by words such as “expect,” “anticipate,” “may,” “intends,
Slide 3: Overview and Highlights
Overview and Highlights • Q2’15 ENI per share (excluding extraordinary performance fee) of $0.32 up 14% over Q2’14 ENI per share of $0.28 ‒ Total Q2’15 ENI (including extraordinary performance fee) of $49 million up 45% over Q2’14 ENI of $34 million ‒ Extraordinary performance fee of $11.4 million (
Slide 4: Growth Strategy
Growth Strategy OMAM’s multi-boutique model is well positioned for growth, with four key areas of focus… Four Key Multi-Boutique Value Proposition Drives Growth Areas New Incremental Growth Opportunities Partnerships Global Distribution Collaborative Organic Growth (Growth and Seed / Co-Investment C
Slide 5: AUM Progression and Mix
AUM Progression and Mix AUM Progression (Last 12 Months) AUM Mix (6/30/15) AUM $B AUM by Affiliate $B % Total $230 $4.2 $7.5 $75 33% $210 1.9% 3.5% 97 43% $190 $226.6 7 3% $214.9 $170 4 2% 28 12% $150 Q2'14 Q2'15 2 1% AUM Progression (2nd Quarter) 14 6% Total $227 100% $B $230 $0.8 $1.8 AUM AUM by A
Slide 6: Net Client Cash Flows and Revenue Impact
Net Client Cash Flows and Revenue Impact AUM Net Client Cash Flows (“NCCF”) Revenue Impact of NCCF(1) $B $M $4 $3.8 $20 $19.1 $20.0 $3.6 $18.4 $3.3 $3.2 $3.1 $16.5 $3.0 $15 $13.5 $11.6 $11.3 $2 $1.6 $10.0 $1.2 $10 $8.6 $1.0 $0.8 $5.8 $4.5 $5 $- $1.1 $(0.2) $- $(1.0) $(1.0) $(1.4) $(3.0) $(2) $(5) $(
Slide 7: Net Client Cash Flows Breakdown
Net Client Cash Flows Breakdown AUM Net Client Cash Flows (“NCCF”) - by Asset Class Revenue Impact of NCCF - by Asset Class $B $M $5 $25 $4 $0.2 $20 $1.4 $0.4 $1.3 $0.7 $0.0 $0.2 $3 $2.1 $7.8 $0.3 $0.9 $15 $2.6 $0.7 $2 $0.1 $5.2 $3.2 43 $4.2 $2.6 $0.7 $1 $0.1 22 $10 $0.2 $1.8 $18.6 $0.9 $13.9 $0.8 4
Slide 8: Competitive Investment Performance
Competitive Investment Performance Products representing ≥ 70% of revenue outperforming on a 1-, 3- and 5-year basis Commentary • OMAM uses revenue-weighted performance as its primary investment metric ‒ Ties investment performance to business performance ‒ Reflects percent of management fee revenue
Slide 9: Financial Highlights – Q2 2015
Financial Highlights – Q2 2015 • Q2’15 Economic Net Income (excluding extraordinary performance fee) up 11% to $38 million from $34 million in Q2’14 ‒ Positive impact of higher management fees and lower effective tax rate, partially offset by public company expense and increases in general and admin
Slide 10: Quarterly AUM Growth and Higher Fee Rates Drive Increases in Revenue and Profit
Quarterly AUM Growth and Higher Fee Rates Drive Increases in Revenue and Profit Average AUM ENI Revenue(1) (5) Pre-tax ENI(5) $B $M Performance Fees $M % Change Q2’14 to Q2’15: 9% % Change Q2’14 to Q2’15: 11% % Change Q2’14 to Q2’15: 9% $250 $227 $200 $184 $70 $63 $216 $218 $222 $168 $225 $208 $159
Slide 11: Key Drivers of Financial Performance
Key Drivers of Financial Performance Economic Net Income (“ENI”) reflects the underlying economic earnings of the business Financial Highlights (1) Three Months Ended Six Months Ended June 30, June 30, Q-O-Q P-O-P $M 2015 2014 2015 2014 Growth Growth 1 Management fees $164.9 $147.0 $321.8 $285.6 12.
Slide 12: Management Fee Growth Driven by Higher Fee Global/Non-U.S. Assets and Alternatives
1 Management Fee Growth Driven by Higher Fee Global/Non-U.S. Assets and Alternatives(1) Average AUM and Fee Rate by Asset Class Gross Management Fee Revenue by Asset Class Avg. AUM $B % Change: 10% % Change $M % Change: 12% % Change $250 $400 $381 34.2 $225 33.6 13% $350 $339 $204 15% $35.1 (16%) 43
Slide 13: Moderate Core Expense Growth Creates Operating Leverage in Business
2 Moderate Core Expense Growth Creates Operating Leverage in Business Commentary • Total ENI operating expenses reflect Affiliate operating expenses, Center expenses including public company expenses, and key initiatives, including Global Distribution (excluding variable compensation) • Q2’15 core o
Slide 14: Variable Compensation Scalable as the Business Grows
3 Variable Compensation Scalable as the Business Grows Commentary • Variable compensation typically awarded based on contractual percentage (e.g., ~25 – 30%) of each Affiliate’s ENI earnings before variable compensation, plus Center bonuses ‒ Affiliate variable compensation includes cash and equity
Slide 15: Affiliate Key Employee Distributions Typically Will Grow In-Line With the Business
4 Affiliate Key Employee Distributions Typically Will Grow In-Line With the Business Commentary • Represents employees’ share of profit from their respective Affiliates, ranging from 15 – 35%, in some cases following an initial preference to OMAM(1) • Employee ownership levels projected to remain st
Slide 16: Balance Sheet Can Be Leveraged To Grow Business
Balance Sheet Can Be Leveraged To Grow Business • New fund consolidation guidance adopted by OMAM in 2015 results in removal of Consolidated Funds from GAAP balance sheet and income statement Balance Sheet Capital ($M ) June 30, 2015 December 31, 2014 (U.S. GAAP) Excluding Consolidated Including Con
Slide 17: Appendix
Appendix gE OMAM ;
Slide 18: Reconciliation: GAAP to ENI and Adjusted EBITDA
Reconciliation: GAAP to ENI and Adjusted EBITDA Three Months Ended, Six Months Ended, ENI Adjustments June 30, June 30, $m 2015 2014 2015 2014 i.1 Exclude notional non-cash corporate cost allocations U.S. GAAP net income attributable to controlling interests $49.4 $8.8 $83.6 $19.1 ii. 2 Exclude inte
Slide 19: Definitions and Additional Notes
Definitions and Additional Notes References to “OMAM” or the “Company” refer to OM Asset Management plc; references to the “Parent” or “Old Mutual” refer to Old Mutual plc; references to the “Offering” refer to the Company’s initial public offering dated October 8, 2014 and references to the “Prospe
Slide 20: Definitions and Additional Notes
Definitions and Additional Notes Methodologies for calculating investment performance: Revenue-weighted investment performance measures the percentage of management fee revenue generated by Affiliate strategies which are beating benchmarks. It calculates each strategy’s percentage weight by taking i