Polar Capital Holdings Plc · LSE:POLR
Polar Capital — FY2015 Earnings Presentation
24 slides from Polar Capital's earnings presentation, June 2015
Slide 1: Results Presentation June 2015
Results Presentation June 2015 Tim Woolley (CEO) John Mansell (COO) This presentation is for one-on-one use with non-US professional investors only www.polarcapital.co.uk
Slide 2: Contents
Contents Section I • Business Review Section II • Financial Review For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 2
Slide 3: Financial Review Highlights
Financial Review Highlights • AUM – AUM at 31 March 2015 US$12.3bn from US$13.2bn at March 2014 • Profitability – Pre-tax (pre SBP) profits £33.7m (2014: £34.2m) – Core operating profit excluding performance fees £27.7m (2014: £24.6m) • EPS and Dividend – Adjusted diluted EPS 28.12p (2014: 29.04p)1
Slide 4: Polar Capital AUM: Significant AUM growth but not linear
Polar Capital AUM Significant AUM growth but not linear $bn 16 14 $13.4 $13.2 $12.3 12 $11.4 10 8 $7.2 6 $5.1 $5.3 $3.9 $3.9 4 $3.1 $2.5 $1.9 2 $1.5 0 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Source: Polar Capital, 31 March 2015. For non-US professio
Slide 5: AUM Growth Analysis
AUM Growth Analysis 31 March 2014 31 March 2015 % Increase US$’m US$’m Year on Year Japan 5,629 3,743 - 33.5% Long Only (ex Japan) Technology 1,794 2,037 13.5% North America 1,729 1,972 14.1% Healthcare 1,184 1,503 26.9% Financials 1,064 1,035 - 2.7% GEMs 831 783 - 5.8% Global Alpha 85 100 18% Absol
Slide 6: AUM Flows
AUM Flows AUM at 31 March 2014 $13.2bn Gross inflows quarter 1 [long 1,013 hedge 116] $1,129m quarter 2 [long 1,156 hedge 63] $1,219m quarter 3 [long 971 hedge 161] $1,132m quarter 4 [long 849 hedge 135] $984m Gross outflows quarter 1 [long 1,260 hedge 106] $(1,366)m quarter 2 [long 1,333 hedge 23]
Slide 7: AUM Analysis
AUM Analysis AUM split by strategy Investor mix by geography UK 59.4% Long Only 91.3% Europe 35.6% Alternative 8.7% USA 3.3% Other 1.8% AUM split by business unit Investor mix by holdings Japan 30.5% Bank 32.4% North American 16.1% Private Wealth Manager 17.7% Technology 16.6% Polar Capital Investme
Slide 8: Product Concentration
Product Concentration March March March March 2012 2013 2014 2015 Technology 29% 17% 14% 17% Japan 30% 33% 43% 31% North America - - 13% 16% Europe 12% 10% - - Total of top 3 strategies 71% 60% 70% 64% Number of teams 10 11 9 11 Number of teams with assets > 3 7 7 7 $500m Number of teams with assets
Slide 9: Fund Capacity
Fund Capacity Strategies AUM 31 March 2015 Capacity Technology $2.0bn $2bn+ Japan $3.7bn $5bn+ Europe $0.7bn $1bn+ Healthcare $1.5bn $5bn+ Financials $1.0bn $2bn+ Convertibles $0.3bn $1bn+ Emerging Markets $0.8bn $2bn+ North America $2.0bn $3bn+ Global Equity $0.1bn $5bn+ UK Equity ARF - $1bn+ Europ
Slide 10: Investment Teams: The original vision still holds true
Investment Teams The original vision still holds true Ten to twelve world class investment teams Pre 2010 2010 2011 2012 2013 2014 2015 Technology Technology Technology Technology Technology Technology Technology Japan Japan Japan Japan Japan Japan Japan Europe Europe Europe Europe Europe Europe Eur
Slide 11: Product Overview
Product Overview Long only Alternative UCITS Cayman Global Technology European Forager Japan Japan Alpha European Conviction Healthcare Opportunities ALVA Global Convertible Asian Financials Financial Opportunities Income Opportunities UCITS Global Insurance Global Convertibles Emerging Markets Grow
Slide 12: Lipper Figures For Long Only Strategies 29 May 2015
Lipper Figures For Long Only Strategies 29 May 2015 3 months 6 months 1 year 3 years 5 years % Growth to % Growth to % Growth to % Growth to % Growth to universe position/ universe position/ universe position/ universe position/ universe position/ Strategies universe total Quartile universe total Qu
Slide 13: Alternative Strategies May 2015
Alternative Strategies 29 May 2015 Annualised returns Strategies Inception date YTD 3 years 5 years Inception Forager (AX EUR) 1 August 2003 0.13% 7.38% 7.93% 10.45% Conviction (EUR) 1 April 2006 -2.06% 3.95% 3.72% 5.36% ALVA (A USD) 1 November 2010 2.78% 6.63% n/a 5.85% Global Convertibles (Class I
Slide 14: Sales & Marketing
Sales & Marketing Head of Distribution Secretarial Support Iain Evans Charlotte Keane Head of International Business Development James Brandt North America EMEA Global Banks Institutional UK Third Party Distributor Sales Manager, Sales Manager Capital Growth Advisors Institutional Consultant Head of
Slide 15: Goals and Strategy
Goals and Strategy Goals • To be a leading global investment management boutique • To be a strong dependable partner to our clients offering them a range of interesting and differentiated investment products • To deliver first quartile performance over the investment cycle • To maintain a robust ope
Slide 16: Profitability – by year
Financial Review Profitability – by year Year Year Year to March ’13 to March ’14 to March ’15 Average AUM US$5.7bn US$10.8bn US$13.1bn Core operating profit £10.0m £24.6m £27.7m Performance fee profit £5.5m £7.6m £5.2m Interest and similar income £1.3m £2.0m £0.8m PBT pre S.B.P. £16.8m £34.2m £33.7
Slide 17: Margin analysis – 6 month periods
Financial Review Margin analysis – 6 month periods 6 months 6 months 6 months to March 14 to September 14 to March 15 Average AUM US$12.5bn US$13.4bn US$12.8bn Change (relative) +7% -4% Core operating profit £14.2m £13.9m £13.8m Change (relative) -2% -1% Core operating margin 38% 37% 37% Change (abs
Slide 18: Financial Review Costs
Financial Review Costs Year Year Year to March 13 to March 14 to March 15 Comments Salaries, bonuses and other £13.5m £15.9m £16.7m Increase in staff numbers staff costs Core distributions £4.8m £16.7m £19.5m Increase in core profits Core cash compensation £18.3m £32.6m £36.2m costs For first time s
Slide 19: Financial Review Other operating costs
Financial Review Other operating costs Year to Year to Year to March 13 March 14 March 15 Comments IT £2.5m £3.3m £3.9m Full year of Bloomberg terminals New offices → +£1m in y/e Rent and rates £1.2m £1.4m £1.7m March 2016 Professional fees £0.7m £0.8m £0.7m Insurance £0.4m £0.4m £0.5m Travel and en
Slide 20: Financial Review Dividend
Financial Review Dividend • Total dividend for the year 25.0p (2014: 25.0p) – Implies second dividend payable 19.5p (2014: 21.0p) • Dividend reflects: – Profitability of the company – Health and strength of the company’s balance sheet. Additional cash not required • Policy – Distribution of majority
Slide 21: Financial Review Cash and investments
Financial Review Cash and investments March 2014 March 2015 £m £m Cash £47.0m £41.4m Available for sale investments Alternative fund seed £24.9m £21.2m Long only seed £ 19.0m £30.5m £43.9m £51.7m Total cash and investments £90.9m £93.1m Source: Polar Capital. For non-US professional investor use onl
Slide 22: Financial Review Shareholder analysis at 31 March 2015
Financial Review Shareholder analysis at 31 March 2015 Holding Percentage Directors, founders and staff 27.7m 32% Caledonia 8.0m 9% XL 7.0m 8% EBT 1.2m 1% Blackrock 6.6m 7% Hargreave Hale 5.4m 6% Liontrust 3.4m 4% Free Float = 50% Rathbone 2.8m 3% Artemis 2.8m 3% Others 24.0m 27% Total shares in iss
Slide 23: Summary: Well positioned for long-term growth
Summary Well positioned for long-term growth Funds and • Expanded and differentiated product offering performance • Good performance across a wide range of funds • Significant potential for further growth Fund capacity • Total current capacity in the funds of > US$29 billion, of which only US$12.3 b
Slide 24: Important Information
Important Information Polar Capital 16 Palace Street London SW1E 5JD House View This document has been produced based on Polar Capital research and analysis and represents our house view. All sources are Polar Capital unless otherwise stated. Important Information The information provided in this pr
Polar Capital Holdings — FY2015 Earnings Presentation on 6ix