CapMan 2018 Results Significant strategic projects were completed - - PowerPoint PPT Presentation

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CapMan 2018 Results Significant strategic projects were completed - - PowerPoint PPT Presentation

CAPM AN PLC 1-12 2018 CapMan 2018 Results Significant strategic projects were completed J o a k i m F r i m o d i g , C E O H e l s i n k i , 3 1 J a n u a r y 2 0 1 9 Statements regarding future development and disclaimer The


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SLIDE 1

CapMan 2018 Results

Significant strategic projects were completed

J o a k i m F r i m o d i g , C E O H e l s i n k i , 3 1 J a n u a r y 2 0 1 9

CAPM AN PLC

1-12 2018

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SLIDE 2

Statements regarding future development and disclaimer

The following concerns this document, the related oral presentation by either CapMan Plc (hereinafter the "Company") or a representative of the Company as well as the subsequent Q&A sessions. This document published by the Company constitutes the written material of the presentation for potential investors regarding the possible offering of the Company's securities ("Securities"). The material set forth herein is not, and should not be construed as an offer to sell or a solicitation of an offer to subscribe or purchase any Securities, or a part of such offer. Nothing in this material shall form the basis of any contract and nothing in this should be relied upon in connection with any contract or commitment, and nothing in this constitutes a recommendation regarding the

  • Securities. The decision to purchase Securities should be made only on the basis of the
  • ffer document (or similar document) that has been prepared in connection with the
  • ffering of the Securities. The offer document (or similar document) contains more

detailed information concerning the Company and the Securities than set forth in this material, and potential investors should re-view the

  • ffer

document (or similar document) to conduct an independent research and evaluation of the Company's business, financial standing and nature of the Securities before making an investment decision regarding the Securities. Certain statements presented that are not historical facts, including, among others, estimates of the overall economic development and the market situation, expectations concerning the growth and profitability of the combined group, the realisation of synergy benefits and cost savings, as well as statements that contain the expressions "expects”, “estimates”, “forecasts”, “aims”, “believes”, “pursues”, “intends”, “could”, “anticipates” “plans”, “seeks”, “will”, “may”, “likely”, and “would” and

  • ther

corresponding expressions

  • r

their negative variations identify forward-looking statements. Forward-looking statements are based

  • n

the Company's current expectations, estimates, decisions and plans as well as on the currently available facts regarding, among

  • thers,

the Company's financial standing, results

  • f
  • perations,

plans,

  • bjectives, future results and operations. Such statements involve inherent risks and

uncertainties that, if materialized, may cause the actual results of operations of the combined group to be materially different than currently expected. These factors include the overall economic conditions, including currency and interest rate fluctuations impacting the operating environment and profitability of clients and thereby the orders and margins on them received by the combined group; competition; the combined group's business conditions and continuous development and improvement thereof; and the success of possible future acquisitions. Forward-looking statements are further based on numerous assumptions concerning the Company's current and future strategy and the Company's future business environment. No liability is accepted and no explicit or implicit guarantee or warranty is given with regard to this material, and no undue reliance should be placed on the truthfulness, accuracy or completeness of the material or the opinions expressed herein. Portions of this material are in draft form. The information contained in this material has not been independently verified nor will it be updated. The information contained in this material, including forward-looking statements, applies only on the date of this material and is not intended to be a guarantee of the future results. Any unsourced market data used in the material is an estimate made by the Company and has not been independently

  • verified. The Company does not undertake to update any forward-looking statements

except in circumstances specified by law and explicitly waives any liability for the material.

3 1 - J a n - 1 9 2

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SLIDE 3

Significant projects completed in recent months

3 1 - J a n - 1 9 3

Expansion of BVK mandate to

€820m

Infra fund at

€140m

Fundraising continues as planned New infra mandate AUM growth >€400m Annual fee income growth >€4m (in full as of 1/2019) Acqusition of majority of JAM Advisors

  • New service business with

significant growth potential

  • Currently >€3 million sales
  • Strengthened access to

local tier II and III investors

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SLIDE 4

Completed projects as part of CapMan’s strategy

3 1 - J a n - 1 9 4

PRIVATE EQUITY & CREDIT REAL ESTATE INFRA

Buyout funds

CAPS SCALA

OPEN-ENDED FUNDS CLOSED FUNDS MANDATES, CLUBS, OTHERS INTERNATIONAL INVESTORS NORDIC TIER I INVESTORS NORDIC TIER II & III INVESTORS

JAM Advisors SERVICES

Own balance sheet Broad access to capital New & flexible products

Growth fund Credit funds Value added (NRE funds) Yield (NPI & Hotel funds)

Mandate Infra fund Mandates

Other funds

Broad offering in the private assets space Active value creation JAM

X-Ray & reporting

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SLIDE 5

Growth strategy progressing according to plan

3 1 - J a n - 1 9 5

  • CapMan Nordic Real

Estate II fund established

  • CapMan Nordic Property

Income fund established

  • Growth Equity business

area & fund established

  • Infra business area

established

  • Service business strong

growth

  • Infra fund established
  • First Infra mandate

completed

  • BVK mandate

expansion completed

  • Service business

strong growth continued

  • Infra fundraising

continues as planned

  • Second infra mandate

completed

  • Acquisition of

majority of JAM Advisors

  • Buyout fundraising

started

  • Service business

strong growth continues

  • New investment

products & new sources of capital explored

2017 2018 2019

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SLIDE 6

3 1 - J a n - 1 9 6

Highlights for 2018

Growth in fees

22%

Capital raised since October

+€400m 20

new investments and

15

exits Growth in fee-based profitability

108%

Dividend proposal

€0.12/share

Return on fund investments

+10%

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SLIDE 7

Strong development of fees and fee based profitability

3 1 - J a n - 1 9 7

Fees include management fees and service fees on group level. Operating profit includes Management Company and Service Business without carried interest.

24 25 26 27 28 29 30 31 32 33 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018

Fees (excluding carry), LTM

2018 +22%

MEUR MEUR

1 2 3 4 5 6 7 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018

Comparable operating profitability excluding carry (LTM)

+MEUR 6 2018

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SLIDE 8

The strategic direction impacts the earnings model

Towards more stability and predictability

3 1 - J a n - 1 9 8

Illustrative data Time Time Time

Fee profit Balance sheet return Carry

CapMan historically CapMan today CapMan in the future – long-term objective

Carry Balance sheet return

ROE 20%

(Objective for average ROE) Carry Carry Fee profit

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SLIDE 9

Hotels

Business portfolio complemented with new products

3 1 - J a n - 1 9 9

Short-term profitability Long term value upside

Buyout NRE

CaPS

Nest Infra fund

High Moderate Low High

BVK NPI

…to be complemented with new products and services CapMan’s long-term focus areas…

Traditional New in last 15 months

Infra managed account I

Scala Growth

Illustrative data

Strategic plan

Infra managed account II

New Private Equity products New Infra products New Credit products New Real Estate products New services JAM Advisors

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SLIDE 10

Turnover and operating profit

7,5 16,6 26,0 34,8 8,5 19,9 27,1 36,0 5 10 15 20 25 30 35 40 1-3 1-6 1-9 1-12

Turnover

2017 2018 10,5 17,8 22,9 19,5 4,1 10,1 14,9 12,0 5 10 15 20 25 1-3 1-6 1-9 1-12

Operating profit

2017 2018

3 1 - J a n - 1 9 1 0

MEUR MEUR

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SLIDE 11

Result developments in Q4 2018

14,9 12,0 1,0 5,7 1,7 2 4 6 8 10 12 14 16 18 20 1-9 2018 Profit (ex. changes in FV) Changes in FV (ex. trading portfolio) Changes in trading portfolio FV 1-12 2018 Changes in FV (ex. trading portfolio) Profit (ex. changes in FV)

3 1 - J a n - 1 9 1 1

MEUR

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SLIDE 12

Impact of market turbulence in Q4 2018

  • Trading portfolio -9% or -€5.7 million FV

change in Q4 (vs. e.g. -15% for HEX)

  • Trading portfolio sold down by €35 million

in 2018, of which €21 million in Q1-Q3 2018 and €14 million in Q4.

  • Trading portfolio is not part of CapMan’s

core operations and therefore sell-down to continue in 2019

  • Own fund investments developed positively

in 2018 at +10%

3 1 - J a n - 1 9 1 2

CapMan share price and OMX Helsinki development Oct-18 to Jan-19

80,00 85,00 90,00 95,00 100,00 105,00 01/10/2018 01/11/2018 01/12/2018 01/01/2019

CapMan Plc OMX Helsinki

  • 15% in Q4
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SLIDE 13

Investment allocation 31 December 2018

80,6 8,2 39,0 54,5 Fund investments Other investments Trading portfolio Cash & bank

3 1 - J a n - 1 9 1 3

Investments in private markets 49% of total Total €182m

Outstanding commitments €98m 31 Dec 2018 (vs. €67m a year ago) will shift allocation towards private market instruments Fair value developments in 2018: Fund investments +10% Trading portfolio -3%

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SLIDE 14

CapMan’s objective is to pay an annually increasing dividend

4 6 7 9 11 12

  • 2

2 4 6 8 10 12 14 2012 2013 2014 2015 2016 2017 2018 Comparable EPS, cents DPS, cents

3 1 - J a n - 1 9 1 4

Board proposal:

12 cents/share

for 2018 Based on proposal CapMan’s dividend would grow for the 6th year in a row Liquid assets >€90m Distributable earnings >€90m Equity ratio 59%

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SLIDE 15

Long-term financial objectives

3 1 - J a n - 1 9 1 5

Growth of the Management Company and Services business

>10%

Average annual growth

  • bjective

Equity ratio

>60%

Dividend distribution

  • bjective

The company’s

  • bjective is to pay an

annually increasing dividend to its shareholders.

Return on equity

>20%

On average

Board proposal 12 cents/share Dividend per share has grown every year since 2012

Achieved 2018: 22%* Achieved 2018: 7% Achieved 2018: 59%

*Fees include management fees and service fees on group level and exclude carried interest income and items affecting comparability. Financial objectives are not including items affecting comparability.

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SLIDE 16

3 1 - J a n - 1 9 1 6

Financial objectives and outlook estimate for 2019

CapMan’s objective is to pay an annually increasing dividend to its shareholders. The combined growth objective for Management Company and Service business is more than 10 per cent p.a.

  • n average. The objective for return on equity is more than 20 per cent p.a. on average. CapMan’s equity ratio

target is more than 60 per cent. CapMan expects to achieve these financial objectives gradually and key figures are expected to show fluctuation

  • n an annual basis considering the nature of the business. CapMan expects management fees and fees from

services to continue growing in aggregate in 2019. Our objective is to improve the aggregate profitability of Management Company and Service businesses before carried interest income and any possible items affecting comparability. The return on CapMan’s investments have a substantial impact on CapMan’s overall result. The development of industries and local economies, market instrument and inflation development, valuation multiples of peer companies, exchange rates and various other factors outside of CapMan’s control, as well as the combined effect of the aforementioned factors, influence fair value development of CapMan’s overall investments in addition to portfolio company and asset-specific development. CapMan’s objective is to improve results in the longer term, taking into account annual fluctuations affecting the business. For these and other above-mentioned reasons, CapMan does not provide numeric estimates for 2019.

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SLIDE 17

3 1 - J a n - 1 9 1 7

CapMan + JAM Advisors

3 1 J a n u a r y 2 0 1 9

Technologically advanced reporting, analysis and wealth management services and an expanded customer network

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SLIDE 18

JAM Advisors

3 1 - J a n - 1 9 1 8

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SLIDE 19

3 1 - J a n - 1 9 1 9

Founded in

2012

Employees

25

Turnover

€3.3m

Clients

100+

Client portfolio

€9bn

Investment service provider

Fin-FSA approved

Finnish investor focus

Tier II & III

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SLIDE 20

3 1 - J a n - 1 9 2 0

JAM service offering

  • 1. Consolidated reporting
  • 2. X-Ray
  • 3. Wealth Management
  • 4. Investment solutions

Provides a consolidated and transparent view of customers’ total holdings regardless

  • f the asset manager, custodial service

provider or asset class Open architecture investment solutions to guarantee most effective and highest performing solutions Tailored solutions based on client needs New private asset solutions (to be developed) Unique understanding of the customer’s portfolio and needs as well as enriched data

  • n 10,000 instruments

“Wealth management with information not available to others” Analysis and visualization of all instruments and total portfolio characteristics to allow customers to make more informed investment decisions

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SLIDE 21

JAM’s concept in a nutshell

3 1 - J a n - 1 9 2 1

INVESTOR

Asset manager 1 Asset manager 2 Asset manager 3 Asset manager 4 Asset manager 5

Investor

Asset manager 1 Asset manager 2 Asset manager 3 Asset manager 4 Asset manager 5

Traditional reporting flow Consolidated reporting concept INVESTOR

Traditionally reporting services is an asset manager specific service provided to investors JAM consolidates reporting data from several sources to provide investors visibility across all asset managers and asset classes

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SLIDE 22

How JAM creates value for its customers

3 1 - J a n - 1 9 2 2

Consolidation Data enrichment X-Ray analytics Customized reporting X-Ray online Wealth management

Asset manager 1 Asset manager 2 Asset manager 3 Asset manager 4 Asset manager 5

Price & allocations feed 1

Price & allocations feed 2 Price & allocations feed 3

Reporting data

Other

JAM Processes Client interfaces

High degree of automation Superior quality and scalability Algorithm based methods and machine learning

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SLIDE 23

3 1 - J a n - 1 9 2 3

New service business with a unique value proposition Broadened customer access to tier 2 & 3 investors Notable cross selling potential

  • A new fee generating service business for CapMan with sustainable competitive

advantages

  • Excellent growth outlook and scalability
  • Ability to provide improved access to private assets for JAM’s growing

client base with some € 9 Bn of assets under administration

  • In addition to current CapMan products, the acquisition will allow development
  • f new generation CapMan products, tailored for smaller investors
  • Opportunity to create new closely knit customer relationships with tier 2 and 3

investors (i.e. Finnish institutional investors, foundations, family offices and wealthy private clients), many of which aim to increase their allocation to private assets

CapMan expands its service offering and customer network

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SLIDE 24

The acquisition as part of CapMan’s strategy

3 1 - J a n - 1 9 2 4

PRIVATE EQUITY & CREDIT REAL ESTATE INFRA

Buyout funds OPEN-ENDED FUNDS CLOSED FUNDS MANDATES, CLUBS, OTHERS: INTERNATIONAL INVESTORS NORDIC TIER I INVESTORS NORDIC TIER II & III INVESTORS

SERVICES

Own balance sheet Broad access to capital New & flexible products

Growth fund Credit funds Value added (NRE funds) Yield (NPI & Hotel funds) Mandates Infra fund Mandates Other funds

Broad offering in the private assets space Active value creation

X-RAY & REPORTING

CaPS

WEALTH MANAGEMENT

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SLIDE 25

Deal parameters

3 1 - J a n - 1 9 2 5

Current owners of JAM Advisors

60% of JAM shares 5.1 million CapMan shares 60% 40%

Current owners of JAM Advisors

~3%

Transaction overview Post transaction

60%

share in JAM acquired by CapMan

5.1 million

new CapMan shares paid to current

  • wners as transaction consideration,

subject to 2 year lock-up arrangement

Option to acquire remaining 40%

by CapMan in 2023

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SLIDE 26

Long-term financial objectives and transaction impact

3 1 - J a n - 1 9 2 6

Growth of the Management Company and Services business

>10%

Average annual growth

  • bjective

Equity ratio

>60%

Dividend distribution

  • bjective

The company’s

  • bjective is to pay an

annually increasing dividend to its shareholders.

Return on equity

>20%

On average Positive Neutral in 2019 and positive thereafter Neutral Neutral The transaction does not impact CapMan’s financial outlook for 2019 as announced on 31 January 2019

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SLIDE 27

3 1 - J a n - 1 9 2 7

CapMan + JAM Advisors

3 1 J a n u a r y 2 0 1 9

Technologically advanced reporting, analysis and wealth management services and an expanded customer network