Slide 1: Pacific Current Group Interim Results
28 February 2018 PACIFIC CURRENT GROUP INTERIM RESULTS Six-month period ended 31 December 2017 HIGHLIGHTS • Underlying NPBT of A$8.7m for the six months ended 31 December 2017, up 26% compared to A$6.9m in 1H17; • Underlying NPAT of A$9.3m for the six months ended 31 December 2017, up 60% compared t
Slide 2: Capital Management
Seizert underwent a period of underperformance beginning shortly after the merger of Treasury Group and Northern Lights. Performance experienced a subsequent rebound, though results for 2017 were mixed, with strong results for its Large Cap Value strategy and significant underperformance for its Mid
Slide 3: Dividend and Outlook
The changes reflect the tax impact on PAC through the recognition of US tax assets and liabilities that have been taken up since consolidation. The equity position as at 30 June 2017 has been reduced by A$40m, as opposed to A$48m previously indicated. This is due to the net deferred tax asset of A$8
Slide 4: Conference Call
CONFERENCE CALL Investors and analysts are invited to participate in a conference call at 11:00am AEDT on Wednesday, 28 February 2018 to be hosted by Pacific Current Group’s Chairman, Mike Fitzpatrick, President, North America & Global CIO, Paul Greenwood, Chief Financial Officer and COO, Joseph Fer
Slide 5: Pacific Current Group Interim Results
PACIFIC CURRENT GROUP IN Meee E SULTS For the half-year ended 31 December 2017 PRESENTERS: Paul Greenwood, President, North America and Global ClO ASX: PAC Joseph Ferragina, Chief Financial Officer and COO Tony Robinson, Executive Director
Slide 6: Disclaimer
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 securities in Pacif
Slide 7: Agenda
Agenda Overview Portfolio Update Financials Q&A Appendix aR oN = PACIFIC CURRENT GROUP
Slide 8: Overview
= = = aa Lu > O
Slide 9: Overview — Interim Highlights
Overview — Interim Highlights > First Half of 2018 (1H18) Financial Highlights - 30 June 2017 to 31 December 2017 Underlying NPBT of AS8.7m, up 26% from AS6.9m in 1H17 Underlying NPAT of AS9.3m compared to A$5.8m in 1H17 Statutory profit of AS89.5m compared to AS6.1m in 1H17 * Includes a net after t
Slide 10: Overview — Interim Highlights (Investment Opportunities)
Overview — Interim Highlights > Investment Opportunities Divested IML on 3 October 2017 and Goodhart on 26 January 2018 Pipeline of attractive opportunities at all-time high Most likely new investments will be in firms offering private capital and non- active equity strategies Pipeline spans continu
Slide 11: FUM A$67bn, NPAT and NPBT Highlights
» ▪ FUM 32% A$67bn* 63% ▪ 5% ▪ A$9.3m** NPAT » 60% A$89.5m statutory » A$8.7m** NPBT 26% A$104.7m statutory 19.6cps** » EPS 6% 187.4cps statutory *FUM of private equity funds is based on capital commitments to each fund and does not reflect any return of capital to date. FUM excludes IML due to sale
Slide 12: Core, Growth and Other Boutiques
TEAM Aurora Trust Core Boutiques Growth Boutiques Other Boutiques // 8
Slide 13: Core Boutiques Key Metrics
TEAM Core Boutiques Key Metrics 1H17 1H18 FUM as at 31 December Revenue for the half year Earnings to the Group* » » // 9
Slide 14: Growth Boutiques Key Metrics
TEAM Growth Boutiques Key Metrics 1H17 1H18 FUM as at 31 December Revenue for the half year Earnings to the Group* » » // 10
Slide 15: Other Boutiques Key Metrics
TEAM Other Boutiques Key Metrics 1H17 1H18 FUM as at 31 December Revenue for the half year Earnings to the Group* » // 11
Slide 16: Portfolio Update
Slide 17: Investment Performance: 1 Year, 3 Years, 5 Years
❯ • • • • 1 Year 3 Years 5 Years - - - // 13
Slide 18: FUM Growth by Boutique
Core Boutiques Growth Boutiques Other Boutiques 25 12 1.2 +23% Billions Billions Billions +79% +27% 30-Jun-17 10 30-Jun-17 1 30-Jun-17 20 31-Dec-17 31-Dec-17 31-Dec-17 8 0.8 15 +21% 0.6 +118% +27% 6 -4% 10 4 0.4 +10% 5 +0.1% 2 0.2 +13% +92% +11% - 0 0 0 Aperio (USD) RARE (AUD) Seizert (USD) Aether G
Slide 19: Traditional and Non-Traditional Economics
Traditional Economics Non-Traditional Economics ❯ PAC earnings from Core Boutiques generally operate under traditional economics, with fees directly correlated to FUM. • Core Boutiques accounted for > 86% of boutique earnings in 1H18; Aether was the largest contributor followed closely by Seizert. I
Slide 20: Boutique Profile
Boutique: Equity Ownership: PM / CIO: Economics: FUM as at 31 Dec 17: Fund Flows: First Investment: Commentary: USD (millions) 23,809 1,200 1,200 USD (millions) 1,120 898 898 15,579 13,200 10,000 Asset Growth: 430 7,100 30-Jun-13 30-Jun-14 30-Jun-15 30-Jun-16 30-Jun-17 31-Dec-17 31-Dec-13 31-Dec-14
Slide 21: Boutique Profile
Boutique: Equity Ownership: PM / CIO: Economics: FUM as at 31 Dec 17: Fund Flows: First Investment: Commentary: USD (millions) AUD (millions) 4,986 4,425 9,934 4,014 9,069 8,192 2,994 3,113 3,117 7,107 5,854 Asset Growth: 5,346 30-Jun-13 30-Jun-14 30-Jun-15 30-Jun-16 30-Jun-17 31-Dec-17 30-Jun-13 30
Slide 22: Boutique Profile
Boutique: Equity Ownership: PM / CIO: Economics: FUM as at 31 Dec 17: Fund Flows: First Investment: Commentary: USD (millions) 813 USD (millions) 721 970 Asset Growth: 505 259 325 159 122 30-Jun-15 30-Jun-16 30-Jun-17 31-Dec-17 30-Jun-15 30-Jun-16 30-Jun-17 31-Dec-17 // 18
Slide 23: Boutique Profile
Boutique: Equity Ownership: PM / CIO: Economics: FUM as at 31 Dec 17: Fund Flows: First Investment: Commentary: USD (millions) AUD (millions) 10,698 5,837 5,252 5,039 4,837 5,987 Asset Growth: 70 30-Jun-16 30-Jun-17 31-Dec-17 30-Jun-15 30-Jun-16 30-Jun-17 31-Dec-17 // 19
Slide 24: Other Boutiques
Other Boutiques ALPHA Funds Management Nereus L@ rownern LIGHTS STRATEGIC CAPITAL INVESTORS Provides direct exposure to Chinese markets primarily through a series of China indexes Revenue generated through an index licensing agreement Equity ownership: 31%, Dec-17 FUM: US$574m* Australian small cap
Slide 25: Financials
Slide 26: Underlying Pro Forma P&L: Revenue and Expenses
TEAM ❯ Revenue ❯ Share of earnings from boutiques Total revenue Gross employee expenses Occupancy expenses Travel and entertainment expenses Advisory, tax and accounting expenses ❯ Legal and consulting expenses ❯ Insurance expenses Interest expense ❯ Other expenses ❯ Total expenses Underlying pro fo
Slide 27: Underlying P&L (A$m) 1H17 1H18
TEAM A$10.7m ❯ A$8.2m ❯ • • // 23
Slide 28: Q&A
Slide 29: Appendix
Slide 30: Statutory P&L Highlights
PAC PAC ❯ Statutory Statutory P&L Highlights (A$m) 1H17 1H18 Revenue 20.1 19.8 Net gains on investments 8.1 103.8 ❯ Employee expenses 8.8 10.5 Other expenses 18.4 8.8 Depreciation and amortisation expenses 1.2 0.7 ❯ Interest expenses 1.9 1.2 Share of net profits/(losses) of associates ❯ 7.7 2.5 and
Slide 31: Underlying P&L Reconciliation
Underlying P&L (A$m) 1H17 1H18 ❯ Statutory net profit after tax 6.1 89.5 ❯ Gain on sale of investments (0.5) (104.3) Income tax expense on the sale of IML (1H17: Aubrey) 0.1 17.9 Take-up of liability relating to S class shares - 2.9 ❯ issued by Aperio Loss on redemption and cancellation of X- RPUs (
Slide 32: Balance Sheet – PAC (A$m) 31 Dec 2017
Balance Sheet – PAC (A$m) 31 Dec 2017 ❯ Current assets 120.6 ❯ Non-current assets Other financial assets 69.6 ❯ Investments in associates 54.2 ❯ Intangible assets 99.9 Plant and equipment 6.1 ❯ Loans and other receivables 13.2 243.1 Total assets 363.7 ❯ Current liabilities 18.9 Non-current liabiliti
Slide 33: Details of Non-Current Liabilities
Details of Non-Current Liabilities Amount : (Face Valug) Maturity Notes USS0.8m* Nov 2018 Promissory notes Vendor finance related to Seizert acquisition. Compound y Interest accrued at LIBOR rate + 5% on total liability. USS8.75m Nov 2019 * The amount shown above is lower than previously stated due