Pacific Current Group Ltd · ASX:PAC
Pacific Current — H1 2023 Earnings Presentation
38 slides from Pacific Current's earnings presentation, Feb 24, 2023
Slide 1: H1 FY23 Results Presentation
ASX ANNOUNCEMENT 24 February 2023 H1 FY23 Results Presentation Pacific Current Group Limited (ASX:PAC) encloses for immediate release its H1 FY23 Results Presentation. -ENDS- Authorised for lodgement by the Board of Pacific Current Group Limited. CONTACT For Investor enquiries: • Paul Greenwood – Ma
Slide 2: First Half FY23 Results Presentation
oe PACIFIC cure N FIRST HALE FY23 RESULTS PRESENTATION PRESENTERS Paul Greenwood Ashley Killick Managing Director, CEO and CIO CFO 24 February 2023
Slide 3: Important information and 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 Pacific Current, no
Slide 4: 1H23 Overview
1H23 Overvie Pacific Current Group (PAC) is a global investor in investment management firms, with stakes in 15 investment firms across the US, Europe, Australia and Asia. PAC's boutiques offer a diverse range of investment products across multiple asset classes, delivering sustainable and growing m
Slide 5: 1H23 Underlying Results
1H23 Underlying Results =Gore revenue drivers (management feés plus performance fees) grew 29' (41% AUD) ory Stripping out unrealised MTM, Underlying EBITDA would have grown 2A AUD) Increased interest expense due to drawing US$30m on new credit line PACIFIC CURRENT GROUP 1H23 1H22 (Sm) (Sm) | (USSm)
Slide 6: Management Fees and Revenue Trends 1H20-1H23
16 14.9 14 12 11.0 10.3 9.8 10 8 6 5.1 4.6 3.7 4 2.3 1.6 1.7 1.6 2 1.0 1.2 0.1 0.2 - (0.6) (2) 1H20 1H21 1H22 1H23 Management Fees Performance Fees Unrealized MTM Corporate Revenues ▪ ▪ ▪ ▪
Slide 7: Portfolio Update
PORTFOLIO UPDATE PACIFIC CURRENT GROUP
Slide 8: 200% $531 $88,000 150% 100% $5,637 $2,854 $9,735 50% $6,780 $1,412 $3,869 $2,069 $1,537
200% $531 $88,000 150% 100% $5,637 $2,854 $9,735 50% $6,780 $1,412 $3,869 $2,069 $1,537 0% -50%
Slide 9: PAC Tier Boutiques Update
PAC Tier 1 Boutiques Update 2008 investment Z| AETHER | Private equity, real assets USA In market with new seed fund targeting US$250m US$500m fund size Secured US$80m as of 31 December 2022 1.5b 1.5b ig 1.56 30-Jun-20 30-Jun-21 30-Jun-22 31-Dec-22 FUM (USS) PACIFIC CURRENT GROUP Private real estate
Slide 10: Global, international, & EM equity
Global, international, & EM equity G OG 2016 investment PARTNERS USA GQG had an excellent performance year Firm has maintained positive inflows despite difficult equity markets PAC's 4% holding no longer subject to escrow 84.7 86.75 88b 44.8 30-Jun-20 30-Jun-21 30-Jun-22 31-Dec-22 FUM (USS) PACIFIC
Slide 11: PAC Tier Boutique Updates
PAC Tier 2 Boutique Updates Global, international, & fl | Plivate equity, real assets Private and listed infrastructure smal Astarté 2021 investment BEAMELLP 2018 investment BE AM | Siismaticer equity CAPITAL PARTNERS UK - UK GLOBAL INVESTORS | USA Initial Fund (ASOP 1) investments tracking well, pa
Slide 12: PAC Tier Boutique Updates - Hybrid RIA platform
PAC Tier 2 Boutique Updates - Hybrid RIA platform rove 2019 investment USA Though adversely impacted by declining equity markets, the business continues to grow, with solid profit growth expected in CY23 Balance sheet has significantly improved over last few years as debt has declined Operational pe
Slide 13: PAC Tier Boutique Updates
PAC Tier 2 Boutique Updates Private real estate 2019 investment USA PENNYBACKER CAPITAL * In market securing commitments for next flagship fund. US$780m has been secured as at 31 December. Targeting at least USS1.5b = Other strategies likely to be added to platform in 2023 * If Pennybacker achieves
Slide 14: PAC's Business Model
PAC's Business Model PACIFIC CURRENT GROUP
Slide 15: PAC economic model
PAC | | Management Fees Performance Fees 2 Realised capital is recycled and reinvested via new acquisitions Revenue from PAC Boutiques 3 | Corporate revenue, expenses and taxes [MEU Boutique may be sold PAC NPAT 5 | Dividends to PAC shareholders 6 PACIFIC CURRENT GROUP PAC economic model PAC acquire
Slide 16: FUM (US$b)
14 13.1 12.9 13.3 12.8 12.8 12 11.0 11.2 10.3 10.3 9.6 9.6 9.6 10 9.1 8.6 8.0 7.8 8 6.9 FUM (US$b) 6 4 2 - Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22
Slide 17: Basis Points
50 35 33.2 44.7 31.6 45 27.8 39.1 30 27.4 40 35.8 25.0 24.5 24.1 24.4 35 31.2 25 28.2 30.7 29.9 26.4 28.1 27.6 26.0 27.2 24.9 Basis Points Basis Points 30 25.2 24.9 20 22.2 22.3 23.0 21.8 25 27.0 19.1 19.5 18.6 17.5 15 20 20.3 8.3 15 10.6 11.0 10.8 10 7.7 8.1 5.8 10 3.4 4.2 4.6 2.7 2.7 5 1.9 1.4 1.4
Slide 18: Outlook
OUTLOOK PACIFIC CURRENT GROUP
Slide 19: Investment Opportunities
InvestmentO Challenging macroeconomic environment has had little impact on opportunities Opportunities by Asset Class Infrastructure 5% Private Real Estate 10% >150 opportunities reviewed in the last 12 months Valuations remain elevated at the larger end of Private Equity PAC's size range, but sub-U
Slide 20: Operational Outlook
Operational O ut | role} k PAC expects to approach or exceed the upper end of A$3b-A$5b of gross new allocations (ex GQG) for FY23, which translates to A$1b - A$1.6b of Ownership Adjusted FUM. Flows are expected to remain near these levels through FY24. PAC expects to make at least one significant i
Slide 21: Financial Outlook
Financial » Outlook PACIFIC CURRENT GROUP. PAC expects strong growth in boutique contributions (ex MTM) in FY23 and FY24 Driven by increase in both management fees and performance fees Growth at key boutiques New investments PAC projects that 2H23 revenues should exceed 1H23 revenues, assuming flat
Slide 22: Appendices
APPENDICES PACIFIC CURRENT GROUP
Slide 23: Pacific Current Overview
Pacific Current Overview Pacific Current is an ASX-listed, global, multi-boutique asset management business, which leverages its experience and resources to identify exceptional asset managers and help them grow Shares on Issue 51,337,467 Market Cap (31 December 22) $376M 52-Week High $9.54 52-Week
Slide 24: Statutory Profit or Loss
A$000s 1H23 1H22 Statutory Profit Statutory income Revenue from operations 9,247 8,605 Oo r Loss Distributions and dividend income 13,173 10,288 Other income a 85 ¥ Changes in fair value (19,130) (33,433) Results include theg@venues Total statutory income 3,361 (14,455) Employment expenses (7,492) (
Slide 25: Statutory to Underlying Reconciliation
A$000s 1H23, 1H22 Stat uto ry to Reported NLBT (12,238) (22,297) Underlying — 7m oa Amortisation expenses ope . R l t <i Fair value adjustment of financial assets 15,812 32,709 econciliation a Fair value adjustment of financial liabilities 3,318 Impairment of investments and financial assets i) 2,40
Slide 26: Underlying Profit Drivers
U n derl i n 000s 1H23 (A$) 1H22 (A$) 4H23 (US$) 1H22 (US$) : y ie g Boutique contributions 26,912 22,793 18,028 16,675 ‘ P rof it D rl ve rs Revenues 359 2,120 241 1,551 “) Employment 4,258 3,924 2,852 2,870 ¥ Marketing/commissions 7 58 51 43 9 _Ttavel/entertainment 375 124 251 91 @ Advisory, tax a
Slide 27: Underlying Functional P&L Summary
Underlying Functional P&L Summary : Sew e ; year Comparatives are adjustéd to ensure PACIFIC CURRENT GROUP a AS000s 1H23 1H22 Investment Sales Group Total Revenues Boutique contributions Management fees 22,280 22,280 13,366 Performance fees 5,500 5,500 6,308 Unrealised MTM (868) (868) 3,120 Boutique
Slide 28: Statutory Balance Sheet
Book Value (A$000s) 31 Dec 22 30 Jun 22 Statutory Cash 47,152 34,886 Other current assets 22,658 12,16 Non-current assets . Balance Sheet Investments in associates and joint ventures 195,235 195,117 intangible assets 53,547 54,315 “i Se Other financial assets 289,454 304,785 Reflects the consolidati
Slide 29: Alternate Balance Sheet
Alte rnate Book Value (A$000s) eae ee Cash 40,462 23,480 Bala nce Sheet Other Current Assets 19,723 9,342 Current Liabilities (6,286) (17,974) ad PAC’s Investable Cash 53,900 14,848 Reflects.deconsolidation of Investment in Boutiques bsidiaries (i.e. Subsidiaries 59,627 61,378 Associates & Joint Ven
Slide 30: Statutory Cash Flow
Statutory Cash Flow * rior year comparatives » adjusted to‘énsure PACIFIC CURRENT GROUP a AS000s 1H23 1H22 Operating cash flow Net receipts from customers/suppliers/financiers (6,753) (3,404) Dividends received 22,814 13,029 Income tax (paid)/received (13,598) 314 Investing cash flow Repayment of Ha
Slide 31: Alternate Cash Earnings
Alternate Cash ae ns a7 Underlying NPBT 18,541 18,073 F | Ow Accounting earings from boutiques (21,417) (19,377) Dividends from boutiques. 22,814 13,029 a Net interest expense/(income) 439 (60) Reconciles:the undéflying TqRESEoMaTsIeMEREELM 291 236 tes} generated hixe)aa) Changes in operating assets
Slide 32: Private equity, real assets
Private equity, real assets 2008 investment USA Aether Investment Partners is a alternative investment manager sponsoring closed end limited partnerships focused private investments in real assets Primary sectors include natural resources and infrastructure * PAC owns a bottom-line profit share of A
Slide 33: PAC Boutique Investments
PAC Boutique Investments Life settlements 2019 investment Luxembourg Carlisle Management Company ("Carlisle") Is a Luxembourg-based firm focused on investments in life settlements, which is the sale of an existing life insurance policy for more than its cash surrender value but less than its net dea
Slide 34: Private equity, renewable energy
Private equity, renewable energy 2008 investment India Nereus Holdings (Nereus) was originally formed as a renewable energy asset manager in India * Nereus joined with PAC and Hareon to form Nereus Capital Investments (NCI), in order to develop two solar plants in India * PAC owns a bottomline profi
Slide 35: PAC Boutique Investments
PAC Boutique Investments Roc PARTNERS Private equity, Asia-Pacific 2014 investment Australia ROC Partners is a specialized investment firm offering both pooled and customized Asia Pacific private equity solutions * PAC owns a bottom-line profit share of Roc's business STRATEGIC CAPITAL INVESTORS Hed
Slide 36: Ownership Adjusted FUM
Ownership Adjusted FUM conciliation PACIFIC CURRENT GROUP. Tier1 Tier 2 Private Market FUM Ownership Boutique / Public Market (us$m) PAC Interest Adjusted FUM Strategy Dec-22 (Us$m) Aether Private 1,537 100.0% 1,537 Banner Oak Private 6,780 35.0% 2,373 Carlisle Private 2,069 40.0% 828 GQG Partners P
Slide 37: Key Definitions
Key Definitions PACIFIC CURRENT-GROUP. Underlying Results/Earnings Unaudited and non-IFRS financial measures used by PAC management to reflect the recurring elements of PAC's business Boutique Contributions PAC's economic entitlement from portfolio company/boutique investments including Management F
Slide 38: Tips for Revenue Recognition
Ti ps for Revenue recognition Ana | Z I n PAC = Private equity, private infrastructure, and private real estate managers normally charge fees on y g committed capital. Thus, new FUM becomes revenue immediately after the legal commitment is received, even though it may take several years to invest th
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