Manulife Financial Corporation · TSX:MFC
Manulife Financial — Conference Presentation (September 2012)
20 slides from Manulife Financial's conference presentation, Sep 5, 2012
Slide 1: Investments: A Cornerstone of Manulife's Financial Strength
Investments A Cornerstone of Manulife’s Financial Strength Warren A. Thomson Senior Executive Vice President & Chief Investment Officer September 5, 2012
Slide 2: Caution Regarding Forward-Looking Statements
Caution Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the “safe harbour” provisions of Canadian provincial securities laws and the U.S. Private Securities Litigation Reform Act of 1995. The forward-looking statements in this presenta
Slide 3: Our investment philosophy is not dependent on risky fixed income markets to meet yields
Our investment philosophy is not dependent on risky fixed income markets to meet yields Highly sophisticated Asset Liability Management strategy Bottom-up development of asset mix to match needs of individual product segments: Generally don't take interest rate risk on the first 20-30 years of
Slide 4: MFC has a strong risk management culture
MFC has a strong risk management culture Centralized control & monitoring of all investment & Asset Liability Management functions Strong corporate oversight by “arms length” credit committee and corporate credit risk management Credit committee’s mandate includes approving exposure limits by borrow
Slide 5: History of delivering investment related gains
History of delivering investment related gains Investment Experience Related Gains/(Losses)1 (C$ millions, excludes gains/losses from interest rate risk management activities) Average investment gain: $153 million 279 256 217 213 169 161 126 134 91 (115) 2 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q1
Slide 6: Diversified high quality asset mix avoids risk concentrations
Diversified high quality asset mix avoids risk concentrations Total Invested Assets (C$227.9 billion) Fixed Income Non-Fixed Income Private Placement Debt Diversified, high quality portfolio: 9% Government Bonds 25% 87% of the total portfolio is Fixed Income, of which Securitized MBS/ABS 96% is In
Slide 7: Public bonds & private placement debt highly diversified by industry
Public bonds & private placement debt highly diversified by industry Public Bonds & Private Placement Debt (C$ 140.5 billion, Carrying Value as at June 30, 2012) 59.9 Private Placements 2% Public Bonds 41% 20.9 5% 10.3 9.9 9.4 1% 1% 7.1 6.9 10% 1% 4.8 4.4 3.9 3.0 7% 2% 6% 6% 1% 1% 4% 3% 3% 3% 2% 1%
Slide 8: Below investment grade holdings limited and concentrated in BB
Below investment grade holdings limited and concentrated in BB Limited BIG Holdings High Quality BIG Allocation (Carrying Value as at June 30, 2012) (Carrying Value as at June 30, 2012) MFC Barclays U.S. High Yield Index 70% BB 3% A 28% BBB 18% 43% 40% ≤ B 2% AA 19% 18% 17% AAA 30% 12% BB B CCC and
Slide 9: Credit provisions & impairments significantly declined since the height of the recession
Credit provisions & impairments significantly declined since the height of the recession Credit Provisions & Impairments (C$ Millions, Pre-tax) 455 189 Long term expected level based on Moody's 173 default studies applied to our aggregated credit 150 exposure: ~$84 million per quarter 59 24 61 19 11
Slide 10: MFC has a high quality mortgage portfolio
MFC has a high quality mortgage portfolio Mortgages by Geography Mortgages by Type (C$34.7 billion, Carrying Value as at June 30, 2012) (C$34.7 billion, Carrying Value as at June 30, 2012) Commercial Mortgages Other Mortgages Canadian Single- Canada (Non-CMHC1) Family Residential Retail C$10.8B
Slide 11: Alternative assets experience key competitive advantages, particularly in low rate environment
Alternative assets experience key competitive advantages, particularly in low rate environment Total Invested Assets (C$227.9 billion, Carrying Value as at June 30, 2012) Alternative Assets as a Competitive Advantage Fixed Income 87% Alternative to public equities Strong historical returns Div
Slide 12: Leveraging internal capabilities in the well diversified alternative space
Leveraging internal capabilities in the well diversified alternative space Alternative Assets Public Equities (C$19.8 billion, Carrying Value as at June 30, 2012) (C$10.7 billion, Carrying Value as at June 30, 2012) Power & Infrastructure 14% Shareholder Non-Shareholder Commercial 37% 63% Leases Rea
Slide 13: Unlevered Commercial Real Estate Portfolio Characterized by High Occupancy Rates
Unlevered Commercial Real Estate Portfolio Characterized by High Occupancy Rates Commercial Real Estate By Type Portfolio (C$8.6 billion, Fair Value as at June 30, 2012) Fair Value Occupancy Location (C$ Millions) Rates Company Own-Use Office –Downtown 15% 54% Toronto 2,274 98% Washington 1,113 97%
Slide 14: Well-diversified portfolio of other Alternative Assets
Well-diversified portfolio of other Alternative Assets Power & Infrastructure Long-lived power & infrastructure assets are a good match for our liabilities Private Equity & Mezzanine Primarily fund investments that are diversified across vintage years and industry sectors Timberland 728,000 ac
Slide 15: Manulife Asset Management's Global Footprint
Manulife Asset Management’s Global Footprint Europe CANADA 8 Investment 57 Investment Professionals Professionals JAPAN 13 Investment Professionals USA 121 Investment Professionals ASIA 123 Investment Professionals* More than 300 Investment Professionals; Offices in 17 countries and territories Unit
Slide 16: Manulife Asset Management: A full spectrum of investment capabilities
Manulife Asset Management: A full spectrum of investment capabilities Public Markets Alternative Markets ($148 billion AUM) ($12 billion AUM) Hancock Hancock Hancock Manulife Equity Fixed Income Timber Agricultural Renewable Energy Real Estate* U.S. U.S. Canada Canada U.K. U.K. Asia/Ja
Slide 17: External global recognition of our asset management capability driving C$222 billion AUM
External global recognition of our asset management capability driving C$222 billion AUM1 Manulife Asset Management Total AUM (C$ billions) 9 Named ‘Best 9 Asia Pacific 9 Top performer in Asia Bond region ‘Fund CNH market House’ Manager of the (China Dim Sum 222 Year’ (MGF USD High Yield 209 211 Asi
Slide 18: Strong leadership in Target Risk Funds
Strong leadership in Target Risk Funds John Hancock is the #1 provider of target-risk Lifestyle Portfolios in the U.S. Lifecycle Conservative Lifecycle Moderate Lifecycle Balanced Lifecycle Growth Lifecycle Aggressive Portfolio Portfolio Portfolio Portfolio Portfolio . Source: Barron’s (June 25, 201
Slide 19: Hancock Natural Resource Group: World Leader in Institutional Timberland & Farmland Investing
Hancock Natural Resource Group: World Leader in Institutional Timberland & Farmland Investing Assets under management (US$ Billions) 12.5 Hancock Agricultural Investment Group Hancock Timber Resource Group 10.4 10.6 9.5 9.2 8.1 7.3 5.6 2.9 2004 2005 2006 2007 2008 2009 2010 2011 2012* 20% market s
Slide 20: Conclusion
Conclusion Diversified, stable General Fund asset mix High quality, high performing investment portfolio Strong credit and risk management culture with centralized controls Returns enhanced through the use of alternative assets in lieu of increasing credit risk Leveraging strong internal a
Manulife Financial — Conference Presentation (September 2012) on 6ix