Results Presentation Gavin Rochussen, Chief Executive Officer John Mansell, Executive Director Twelve Months to 31 March 2020 polarcapital.co.uk This presentation is for use with non-US professional investors only.
Agenda Overview & highlights – pages 3-4 Market perspective & COVID-19 – pages 6-8 Fund performance & fund flows – pages 9-14 Capacity – page 16 Financial review – pages 17 - 22 Strategy update – pages 20 - 24 Summary & outlook – pages 23 - 30 Appendices – pages 31 - 39 2 This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Overview Well Positioned • Over 70% of AuM Net Inflows outperforming benchmark on • Strong Balance Sheet Tech net inflows of a YTD and • £316m and positive Net assets of three year flows continue £116m including net basis 1 cash of £107m • Majority of open ended • funds had net inflows No debt on balance sheet • Average AuM Resilient Business Model • increased over the Significant surplus • Business continuity plan year despite March sell capital resources initiated with no negative off impact on operations • Active fund specialities providing resilience • Diversified sector and regional funds • Investment team autonomy, within a rigorous oversight framework provides diverse investment outcomes Source: 1. Bloomberg, as at 29 May 2020. Past performance is not indicative or a guarantee of future results. 3 This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Highlights & Challenges AuM recovered from 31 March 2020 level of Performance £12.2bn to fee profits of Fund £14.4bn at the £8.8m Marginal performance end of May 2020 decline in (2019 - £24m) has improved core after the operating profit despite challenging Second interim investment in month of dividend Closure of UK new teams March 2020 maintained at Absolute 25 pence. Equity Fund Total annual dividend maintained Source: Polar Capital, as at 29 May 2020. Past performance is not indicative or a guarantee of future results. 4 This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Market Perspective & COVID-19 5 This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Market Perspective Global indices vs volatility • Fastest bear market rotation after the longest bull market 100% on record 80% • Peak to trough sell off over a four week period saw the S&P 500 fall 33% 60% • Following unprecedented stimulus, markets have gained from the low point with the NASDAQ ahead YTD and the 40% S&P marginally down YTD 20% • Economic outlook remains uncertain with concerns about a second wave of the virus as lockdowns are eased 0% • Healthcare and Technology sectors have benefited. Polar Capital is well positioned in these sectors -20% -40% MSCI All-Country World Index DJ World Technology Index VIX MSCI ACWI/HEALTHCARE NR Source: Bloomberg, as at 29 May 2020. Past performance is not indicative or a guarantee of future results. 6 This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Market Perspective Net sales of active long- term funds across Europe (€m) • Across Europe, equity funds had net inflows in November, 100,000 December and January 50,000 • Net outflows in equities began in February. March 0 witnessed dramatic outflows of all asset classes • Net inflows were recorded in April, although not replacing -50,000 the level of outflows in March -100,000 • This indicates that European investors retain significant -150,000 cash holdings -200,000 -250,000 May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr 2019 2020 Bond Equity Mixed Assets Other Source: Broadridge Fund File and Fund Radar, as at 30 April 2020. Data excludes funds of funds, money market funds and ETFs (unless stated). 7 This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
COVID-19 Operational resilience, wellbeing of staff and client service Initial priorities During lockdown Approaching the new normal • • • Wellbeing of staff Increased client communication Limited numbers will work from the office commencing in July • • Remote working facilities tested Weekly COVID-19 Executive • before lockdown meetings to monitor staff wellbeing Remote client meetings will be a regular feature • • Additional investment in home Encouraged staff communication • working equipment A focus on environmental and social • aspects of ESG with lockdown Weekly updates internally • proving what can be achieved with Rotation of staff to home working the use of technology environment before lockdown to • Seamless operational capability in ensure resilience the remote environment • Polar Capital is addressing • • corporate ESG as a high priority, Allowed staff to work from home Increased attention to portfolio with Board and Exco leadership. prior to lockdown if that was their liquidity We are using the experience of the preference COVID lockdown period to review • Suspended the UK Absolute Equity • all of our activities; travel, recycling, Ensured the centralised trading Fund due to fund manager ill health resource usage. We set the base facility operated remotely (non-COVID related). All holdings line at the March 2020 year end and sold and cash returned to will provide detailed reporting in the unitholders future. Source: Polar Capital. 8 This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Fund Performance & Flows 9 This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Performance Annualised strategy performance against benchmark (since inception) 14.0% 12.0% 1 st Quartile 2 nd Quartile 10.0% 3 rd Quartile 4 th Quartile 8.0% 6.0% 4.0% 2.0% - -2.0% Source: Polar Capital, 29 May 2020, Lipper quartile rankings as at 29 May 2020. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. As a result, you should not make an investment decision on the basis of this information. Rather, you should use the Lipper ratings for informational purposes only. Certain information provided by Lipper may relate to securities that may not be offered, sold or delivered within the United States (or any State thereof) or to, or for the account or benefit of, United States persons. Lipper is not responsible for the accuracy, reliability or completeness of the information that you obtain from Lipper. In addition, Lipper will not be liable for any loss or damage resulting from information obtained from Lipper or any of its affiliates. For Lipper methodology please go to: http://lipperalpha.financial.thomsonreuters.com/wp-content/uploads/2015/11/S026849-Method-Lipper-Leaders-Ratings-System-International.pdf Past performance is not indicative or a guarantee of future returns.* Absolute return product, Fund does not have a benchmark. Funds ordered according to launch date. 10 This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
Performance % of UCITS Funds AuM by quartile ranking • 100.0% 60% of AuM is in the first quartile against the Lipper peer group over three years. 70% is in the upper quartile over 90.0% five years and 80% since inception 80.0% • 60% of AuM is in the first two quartiles against the Lipper 70.0% peer group over one year 60.0% • 78% of AuM is in the first two quartiles against the Lipper 50.0% peer group over three years 40.0% • 85% of AuM is in the first two quartiles against the Lipper 30.0% peer group over five years 20.0% • 98% of AuM is in the first two quartiles against the Lipper 10.0% peer group since inception 0.0% 1Y 3Y 5Y SI 1st quartile 2nd quartile 3rd quartile 4th quartile Source: Polar Capital, 29 May 2020. Totals may not sum due to rounding. Past performance is not indicative or a guarantee of future results. 11 This presentation is for use with non-US professional investors only. Please refer to the Important Information at the end of this presentation.
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