H&g High Conviction Ltd. · ASX:HCF
H&g High Conviction — Investor Presentation (May 2023)
17 slides from H&g High Conviction's investor presentation, May 4, 2023
Slide 1: Placement Presentation May 2023
For personal use only ASX: HCF Placement Presentation May 2023 H&G Investment Management Ltd (ACN: 125 580 305) on behalf of H&G High Conviction Limited (ACN: 660 009 165)
Slide 2: Important Information
IMPORTANT INFORMATION Status of this document This document contains general information regarding H&G High Conviction Limited (HCF) as at the date of this presentation. The information contained in this document (including this notice) (Information) is not comprehensive and subject to change. The I
Slide 3: Good companies caught up in size/liquidity factor crisis
Good companies caught up in size/liquidity factor crisis Microcaps have dramatically underperformed “bluechip” ASX 200 For personal use only Last 12 month return – ASX Emerging Companies Index minus ASX 200 Index 140.0% 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% -18.6% -20.0% -40.0% -60.0% -80.0% 2
Slide 4: Number of companies appearing in HCF's sweet spot
Number of companies appearing in HCF’s sweet spot Striking increase in investment opportunities For personal use only Companies with market capitalisation < $200m and revenue > $5m p.a. 600 500 400 300 200 100 0 3
Slide 5: Long-term market outperformance
Long-term market outperformance Value of $10,000 invested since inception as at 31 March 2023 For personal use only $35,000 $30,952 $30,000 $25,000 HCF Pre-Tax Total Return $20,000 ASX Small Ords Accumulation Index $15,000 $11,449 $10,000 $5,000 $- *Performance data, as applicable throughout this pr
Slide 6: Where we fit in the LIC landscape
Where we fit in the LIC landscape A uniquely concentrated microcap investment company For personal use only Reported Strategy HCF Bubble size indicates last reported Micro number of holdings Micro/small Small/Mid Mid/Large Large ← Negative Positive → 1 Year Return Sources: Bell Potter Weekly LIC Rep
Slide 7: A selected portfolio of companies on a journey
A selected portfolio of companies on a journey Every firm has its own needs, return/risk, and time to maturity For personal use only Proptech Group Po Valley Energy Centrepoint IRR1 Alliance Kiland Connexion Telematics Cirrus Networks Lifecycle of investment2 1. IRR is presented as a notional concep
Slide 8: Team available to HCF
Team available to HCF A lifetime of experience For personal use only PORTFOLIO MANAGEMENT GOVERNANCE & INVESTMENT COMMITTEE PLUS, THE WIDER H&G GROUP 8 YEARS 30 YEARS 30 YEARS EXPERIENCE EXPERIENCE EXPERIENCE JOSEPH CONSTABLE DAVID GROVES SANDY BEARD DIRECTOR & PORTFOLIO MANAGER CHAIRMAN CHAIRMAN –
Slide 9: Offer details
Offer details Overview For personal use only Size Up to $3m (within remaining 15% placement capacity) Offer Price $1.04 per share (Post-tax NTA as at 30th April 2023) Bidding Eligible sophisticated and wholesale investors Lead Manager Morgans Corporate Limited (ABN 32 010 539 607) (“Morgans”) Contac
Slide 10: Why invest now in HCF?
Why invest now in HCF? Continuing our strong momentum with more dry powder For personal use only ▪ Placement facilitates getting set now considering tight register and turnover of c. $3,500 per day ▪ Investing cash in a buyer’s market following 2022/3 microcap sell-off ▪ Greater scale as a voice for
Slide 11: Thank you for your time
Thank you for your time For personal use only Since Pre-tax performance as of inception Friday, 31 March 2023 3 months 12 months 2 years p.a. 7 years p.a. 10 years p.a. p.a HCF Pre-Tax Total Return 5.2% 14.5% 15.7% 7.8% 9.3% 7.6% ASX Small Ords Accumulation 1.9% -13.2% -2.4% 6.8% 5.2% 0.9% Index Out
Slide 12: Appendices
For personal use only APPENDICES 1. Portfolio characteristics 2. Points of difference & alignment 3. Attractive businesses at attractive prices 4. Shareholders of the company 5. Structure and fees
Slide 13: Portfolio characteristics
Portfolio characteristics As at 31 March 2023 For personal use only Primary exposures as a percentage of Top Holdings total equities allocation Key Portfolio Metrics Po Valley Energy Ltd (PVE.AX) Number of companies 17 21% 5% Kiland Ltd (KIL.AX) 6% Median market cap $46m 8% Centrepoint Alliance Ltd
Slide 14: Point of difference & alignment
Point of difference & alignment For personal use only UNIQUE POINT DEEP VALUE ACTIVE ENGAGEMENT PROVEN TRACK OF DIFFERENCE Concentrated portfolio of Close relationship with RECORD Access to the knowledge, overlooked and undervalued management & board Long-term superior returns experience and network
Slide 15: Attractive businesses at attractive prices
Attractive businesses at attractive prices We invest in and actively engage with undervalued microcap companies For personal use only The opportunities we seek What we do Significant mispricing Intensive due diligence across entire universe of microcaps to unearth select bargains Discounts to inhere
Slide 16: Shareholders of the company
Shareholders of the company Top Shareholders include managers (& family), as well as supportive investors For personal use only Investor/Group – as at 2nd May 2023 % of SOI Former H&G High Conviction Fund Unit Holders 26.7 Constable Group 25.6 Perennial Value Management 14.1 Hancock & Gore Limited 6
Slide 17: Structure and Fees
Structure and Fees For personal use only ASX-listed $60m Hancock & Gore market cap diversified (“H&G”; ASX: HNG) investment group 100%-owned Investment management agreement H&G Investment ASX Listed Private Equity H&G High Conviction Investments Investments Management Ltd Limited (ASX: HCF) (HGIM) M
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