Hansa Investment Company Ltd · LSE:HAN
Hansa Investment — Hansa Trust — Investor Presentation (April 2018)
42 slides from Hansa Investment's investor presentation, April 2018
Slide 1: Hansa Trust PLC April 2018
“® HANSA TRUST PLC April 2018
Slide 2: Hansa Trust is a proprietor based investment trust
Hansa Trust is a proprietor based investment trust blending best-in-class third party funds, a global equity portfolio and a strategic holding in Ocean Wilsons Holdings Managed by Hansa Capital Partners the trust adopts a long-term approach, ignoring short-term noise, with a focus on the growth and
Slide 3: Index
HANSA TRUST Index • History of Hansa & Strategic Review • Performance Review • Portfolio Positioning & Characteristics • Ocean Wilsons Holdings • Market Outlook • Appendix 3
Slide 4: History of Hansa & Strategic Review
History of Hansa & Strategic Review 4
Slide 5: Hansa timeline
HANSA TRUST Hansa timeline Rea Brothers acquire a number of Finsbury Trust becomes investment companies, including Hansa Trust Scottish and Mercantile Rea Brothers purchases Strategic review of Hansa 58% of Ocean Wilsons Scottish and Trust initiated Holdings Limited Mercantile becomes Hansa Trust be
Slide 6: Corporate structure
HANSA TRUST Corporate structure 6
Slide 7: Strategic Review March 2018
HANSA TRUST Hansa Trust Strategic Review March 2018 Description Portfolio Hansa Trust Weight January 2014 Core Regional Core Regional exposure based on the output 34.3% of the Hansa House View. Thematic Thematic Growth sectors such as 5.6% Description Portfolio biotechnology and technology Weigh
Slide 8: Performance Review
Performance Review 8
Slide 9: Performance to end March 2018
HANSA TRUST Performance to end March 2018 3 months One year 5 years (p.a.) 15 years (p.a.) NAV Performance TR -2.0% 6.3% 5.9% 12.9% NAV Performance ex. OWHL TR -1.8% 6.0% 8.5% 10.9% Ordinary Share TR -4.6% 16.5% 5.6% 12.7% ‘A’ Ordinary Share TR -3.7% 17.3% 5.8% 12.6% FTSE All-Stocks Gilts TR 0.3% 10
Slide 10: Performance of the different silos one year to March 2018
HANSA TRUST Performance of the different silos one year to 31 March 2018 14% 12% 10% 8% 6% 4% 2% 0% -2% Core Regional Funds Global Equities Thematic Diversifying (ex Ocean Wilsons Cash/FX OWHL) Holdings Limited 10
Slide 11: Core Regional Funds and Global Equities holdings
£10,000,000 £15,000,000 £20,000,000 £25,000,000 £5,000,000 £- Goodhart: Hanjo 2,832,912 Indus Japan Long Only 1,068,450 BlackRock Eur Hedge 816,907 SISF Asian Total Return 694,973 Findlay Park American 673,764 BlackRock Frontiers 494,845 Prince Street Inst 479,033 Odey Absolute Return 236,077 Adelph
Slide 12: Holdings by silo
£10,000,000 £20,000,000 £30,000,000 £40,000,000 £50,000,000 £60,000,000 £70,000,000 £80,000,000 £- Goodhart: Hanjo 3,938,524 Findlay Park American 3,324,895 Select Equity Offshore 2,725,302 SISF Asian Total Return 2,678,145 Vulcan Value Equity 2,094,908 Indus Japan Long Only 1,908,942 BlackRock Eur
Slide 13: Performance of less correlated funds June 2016 to March 2018
HANSA TRUST Performance of less correlated funds 1 June 2016 to 31 March 2018 A basket of lower-correlated funds have been purchased since June/July 2016. The performance since has been positive and outperformed bonds and cash. 25% 20% 15% Performance (GBP) 10% 8.1% 6.6% 4.7% 5% 2.3% 0% -5% -10% -15
Slide 14: Transactions April 2017 to March 2018
HANSA TRUST Transactions 1 April 2017 to 31 March 2018 • Equity Purchases £42.0m: • Equity Sales £36.2m: – White Mountains Insurance Group £3.0m – NCC Group - £6.4m (profit of £4.3m) – CK Hutchison £2.8m – Experian Group Limited £6.3m (profit of £4.1m) – Exor NV £2.7m – UBM PLC - £5.5m (profit of £1
Slide 15: Global Equities – performance by size of holding
HANSA TRUST Global Equities – performance by size of holding 31 March 2018 1 Year 3 Year Performance Performance Value % of (or since (or since Initial Purchase 31/03/18 Total % of Global initial initial Security Name Date (GBP) NAV Equity Silo purchase) purchase) Hansteen Holdings PLC 25/11/2005 4,
Slide 16: Global Equities as at end March 2018
HANSA TRUST Global Equities as at end March 2018 Geographic Exposure by Listing Performance 1 April 2017 to 31 March 2018 Asia 10% 19% Europe 9% 41% 8% 7% 6% 5% 4% 3% US 2% 40% 1% 0% World Index FTSE 100 Global Equities Performance
Slide 17: Portfolio Positioning & Characteristics
Portfolio Positioning & Characteristics 17
Slide 18: Current Positioning (as at March 2018)
HANSA TRUST Current Positioning (as at 31 March 2018) 25.0% 19.7% 20.0% 15.0% 13.1% 12.9% 11.3% 10.0% 7.0% 7.0% 6.3% 5.0% 3.7% 4.1% 3.6% 3.2% 3.4% 1.2% 1.8% 0.4% 1.0% 0.2% 0.0% 18
Slide 19: Portfolio Characteristics (as at March 2018)
HANSA TRUST Portfolio Characteristics (as at 31 March 2018) Look-through analysis of Hansa Trust portfolio, including holdings in Ocean Wilsons (Investments) Ltd* Geographic Exposure Sector Exposure 3.5% 0.4% 1.0% 0.5% 1.0% 0.2% 4.5% 3.6% 0.2% 7.0% 5.1% 22.8% 8.0% 26.2% 7.8% 8.2% 12.8% 8.0% 8.2% 11.
Slide 20: Other Portfolio Characteristics
HANSA TRUST Other Portfolio Characteristics (as at 31 March 2018) Liquidity Annual 3rd Party Management Fees on Underlying Holdings Cash 0% 1 < x ≤ 1.5% 1.5 < x ≤ 2% 3% 3% Fixed 32% 1 Week 38% 0% 46% 0 < x ≤ 1% 48% 1 month 3 months 9% 12% > 6 months 4% 6 months 5% Look-through analysis of Hansa Trus
Slide 21: Dividend Profile
HANSA TRUST Dividend Profile Dividend Policy The Trust’s dividend policy was updated in 2014, and it is now to pay two similar interim dividends each year. Barring unforeseen circumstances, the dividend is expected to grow over time reflecting the longer term returns of the portfolio. Dividend Payme
Slide 22: Discount
HANSA TRUST Discount Hansa Trust Ord and A combined Hansa Trust Ord and A combined (relative to AIC overall 0% average discount) -5% 10% 5% -10% 0% -15% -5% -20% -10% -25% -15% -30% -20% -25% -35% -30% -40% -35% -45% -40% -50% -45% Nov-08 Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-1
Slide 23: Ocean Wilsons Holdings
Ocean Wilsons Holdings 23
Slide 24: Ocean Wilsons Holdings
HANSA TRUST Ocean Wilsons Holdings Ocean Wilsons Holdings is a Bermudian investment holding company whose main assets are a controlling interest in Wilsons Sons and an international investment portfolio, both run with a long-term view. The Oceans holding is controlled by the Hansa Trust board 24
Slide 25: Wilson Sons
HANSA TRUST Wilson Sons Revenue EBITDA Wilson Sons is among Brazil’s largest and oldest port, maritime and logistics services companies 25
Slide 26: Wilson Sons
HANSA TRUST Wilson Sons Despite the challenges faced in Brazil in recent years, Wilsons has generated significant economic value 26
Slide 27: Wilson Sons
HANSA TRUST Wilson Sons Wilson Sons operates in a market with significant structural growth potential 27
Slide 28: Ocean Wilsons Investments (Limited) as at December 2017
HANSA TRUST Ocean Wilsons Investments (Limited) as at 31 December 2017 30% 28.8% 25% 20% 15% 13.3% 9.4% 10% 8.2% 6.5% 6.4% 6.6% 5% 3.0% 3.2% 2.7% 2.1% 2.0% 2.3% 2.6% 1.0% 1.0% 0.5% 0.4% 0% Ocean Wilsons Investments (Limited) is an investment portfolio focused on achieving long-term returns while emp
Slide 29: Market Outlook
Market Outlook 29
Slide 30: Market outlook…..a choppy start to the year
HANSA TRUST Market outlook…..a choppy to start to the year Start of year (1 Jan 2018) Peak (26 Jan 2018) to Local Currency Returns as of 17 Apr 2018 to Peak (26 Jan 2018) Trough (8 Feb 2018) Q1 2018 YTD Equities - Regions MSCI ACWI + FM NR USD 7.3 -9.0 -0.9 1.2 MSCI World (Developed) NR USD 7.0 -9.0
Slide 31: Market outlook…..reasons for volatility
HANSA TRUST Market outlook…..reasons for volatility Source: Deutsche Bank Source: FactSet ….the catalyst for the correction appeared to be disappointing inflation numbers. Certainly the market had started to bake in persistently low inflation but another key factor is market complacency 31
Slide 32: Market outlook……correction or crash?
HANSA TRUST Market outlook……correction or crash? Aggregate Index Historical Percentile 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% P/E to Growth EV/Sales EV/EBITDA Price/Book Forward P/E FCF yield Cyclically adjusted P/E S&P500 STOXX600 ……under a wide range of valuation measures, equity markets are
Slide 33: Market outlook……correction or crash?
HANSA TRUST Market outlook……correction or crash? Source: Deutsche Bank …….economic growth is largely improving in both developed and emerging markets. No sign of recession any time soon 33
Slide 34: Market outlook……correction or crash?
HANSA TRUST Market outlook……correction or crash? Source: Standard & Poors. Thompson Financial. FactSet. Credit Suisse …..stronger economic growth is feeding through to improved corporate profitability. 34
Slide 35: Market outlook……correction or crash?
HANSA TRUST Market outlook……correction or crash? …….clearly we are at an inflection point in the liquidity cycle but still huge amounts of liquidity being pumped into the system. A significant jump in yields may limit equity returns 35
Slide 36: Market outlook……correction or crash? Excess & Exuberance
HANSA TRUST Market outlook……correction or crash? Excess & Exuberance Arguments for….. Arguments against….. Pockets of consumer excess in areas such Mortgage debt, which is far more important, auto debt is well under control Overall country debt levels still high in Banks are key to healthy economies
Slide 37: Market outlook……correction or crash?
HANSA TRUST Market outlook……correction or crash? Global Financial Crisis Liquidity pumped into the system ? via zero interest rate policies and QE The avoidance of a Liquidity global collapse in economies and the cycle banking system saw valuations inflects normalise across asset classes Equities ri
Slide 38: Positioning……technology and innovation
HANSA TRUST Positioning……technology and innovation Source: GAM. New Relic ……despite the strong performance, valuations remain attractive, especially if growth is taken into consideration. Tech has important implications geographically and for existing industries 38
Slide 39: Positioning……emerging and frontier markets
HANSA TRUST Positioning……emerging and frontier markets Source: GAM. Statista Digital Market Outlook …..EM and FM remain structurally attractive combined with lower valuations 39
Slide 40: Positioning……bonds
HANSA TRUST Positioning……bonds …..bonds remain unattractive albeit we watch the current rise in yields 40
Slide 41: Summary as at March 2018
HANSA TRUST Summary as at 31 March 2018 Look-through analysis of Hansa Trust portfolio, including top 30 holdings in Ocean Wilson (Investments) which are grossed up to 100%. Strategic Allocation Strategic 19.7% Hedge Funds (non directional) Equities 7.7% 58.5% Lower Risk Assets Cash Riskier Assets 0
Slide 42: Conclusion
HANSA TRUST Conclusion • Clearly markets are in the more mature stages of their lifecycle • Higher valuations remove the safety net and can lead to higher portfolio volatility and being susceptible to disappointment • For this reason we are getting prepared to add to more defensive positions as the