Kinetics Spin-off and Corporate Restructuring Fund - Institutional Class · NASDAQ:LSHUX
Kinetics Spin-off and Corporate Restructuring Fund - Institutional Class — Kinetics Spin-Off and Corporate Restructuring Fund — Investor Presentation (May 2024)
32 slides from Kinetics Spin-off and Corporate Restructuring Fund - Institutional Class's investor presentation, May 2024
Slide 1: Kinetics Spin-Off and Corporate Restructuring Fund
Kinetics Spin-Off and Corporate Restructuring Fund (LSHEX, LSHAX, LSHCX, LSHUX) 1st Quarter 2024 © 2024 Horizon Kinetics LLC ®. All rights reserved.
Slide 2: Important Risk Disclosures
Important Risk Disclosures You should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. For a free copy of the fund’s prospectus, which contains this and other information, visit our website at www.kineticsfunds.com or call 1-800-930-3828. You sh
Slide 3: Agenda
Agenda I. Firm Overview II. Investment Philosophy & Process III. Kinetics Spin-Off and Corporate Restructuring Fund Review IV. Appendix – Management Bios – Research Publications – Contact Information – Definitions © 2024 Horizon Kinetics LLC ®. All rights reserved. 3
Slide 4: Firm Overview
Firm Overview © 2024 Horizon Kinetics LLC ®. All rights reserved. 4
Slide 5: Firm Overview: At a Glance
Firm Overview At a Glance Horizon Kinetics LLC Investment Approach Independent, employee owned, serving clients since 1994. Independent Thinking $7.0 billion in firm-wide assets under management1. − Primary source data driven process. 79 employees. − Research analysts culturally guided to ov
Slide 6: Firm Overview: Guiding Principles
Firm Overview Guiding Principles Background: Our co-founders created Horizon Asset Management LLC in 1994 and Kinetics Asset Management LLC in 1996, both are now consolidated under Horizon Kinetics Asset Management LLC, in answer to the extraordinary structural changes that were occurring in the per
Slide 7: Strategy and Client Type Overview
Firm Overview Strategy and Client Type Overview Firmwide Assets Under Management1 $7.0 B Client Assets by Type1 Separately Managed Accounts2 $3.5 B – Equities – High-Yield – Opportunistic Investments, i.e. Distressed Debt Kinetics Mutual Funds and Active ETF3 $2.3 B – Broad Markets – Specialty Marke
Slide 8: Investment Philosophy & Process
Investment Philosophy & Process © 2024 Horizon Kinetics LLC ®. All rights reserved. 8
Slide 9: The Equity Yield Curve
Investment Philosophy The Equity Yield Curve Investors’ short-term interests can create significant mispricing of long-term investments. We believe a long-term investment horizon is essential to reducing chance of loss and earning excess return. Equity Yield Curve Return Dynamics Typical Investors L
Slide 10: Capitalizing on Market Inefficiencies
Investment Philosophy Capitalizing on Market Inefficiencies Why are securities mispriced? Information asymmetry and human emotion (fear and greed) were once the drivers for significant market pricing discrepancies. As markets have modernized, adherents have long advocated an “efficient market” due t
Slide 11: Investment Process: Idea Generation
Investment Process Idea Generation Dynamic, unconventional thinking is required IDEA GENERATION in order to consistently find successful long- Conventional Screens Unconventional Attributes term investments over the course of a full (Mainstream Investors) (Horizon Kinetics) business cycle. Style Own
Slide 12: Investment Process: Portfolio Construction
Investment Process Portfolio Construction Avoid attempting to time the market, and instead average into and out Time Diversification of positions over time. Positions are sized by portfolio managers’ judgment of discount rate Initial Position Sizing/ magnitude along with an assessment of unconventio
Slide 13: Fundamental Risk Management
Fundamental Risk Management Quantifiable Risk versus Actual Risk Result Diversification •Eliminate single security risk Risk Parameters • Generic portfolio with exposure Conventional to all companies, good and bad Standard Deviation •Minimize return variability • “Predictable” lower long-term Tracki
Slide 14: Investment Team
Investment Team Portfolio Management and Research Team Investment Oversight Committee Steven Bregman Murray Stahl Peter Doyle President CEO, CIO President, Kinetics Mutual Funds, Inc. (39 years of Industry Experience) (46 years of Industry Experience) (39 years of Industry Experience) Strategies Cor
Slide 15: Spin-Off Overview
Spin-Off Overview © 2024 Horizon Kinetics LLC ®. All rights reserved. 15
Slide 16: Spin-Off Strategy
Spin-Off Strategy A Long History of Spin-Off Research & Investing Horizon authors research report entitled “Spin-Offs 1996 Revisited: A Review of a Structural Pricing Anomaly”. Horizon begins publishing The Spin-Off Report. 1996 Spin-Off research implemented via a dedicated long-only 1997 equity inv
Slide 17: What is a Spin-Off?
What is a Spin-Off? Spin-Off Parent company distributes 100% of a subsidiary as a tax-free dividend of shares. Immediately following the transaction, there are 2 separate firms with exactly the same shareholder base. Carve-Out 2-step process that involves an IPO or rights offering for minority
Slide 18: Spin-Off Opportunity & Incentive
Spin-Off Opportunity & Incentive Opportunity to Improve Efficiency As a subsidiary of a large conglomerate, management tends to focus on increasing revenue, and controlling costs becomes secondary. Furthermore, subsidiaries are often allocated company expenses that are Parent Company not necessarily
Slide 19: Spin-Off Valuation
Spin-Off Valuation Pre- Short-Term Selling Pressures: Transition Period Long-Term Success transaction Years 1 & 2* Institutional constraints: Incentivized Management ― Market capitalization ― Style box More competitive operations ― Industry sector Sub-par peer comparisons: Performance history ― Grow
Slide 20: Spin-Off Case Study
Spin-Off Case Study One of the first spin-offs Horizon covered in the Spin-Off Report in 1996 was Anheuser-Busch’s spin-off of its Campbell-Taggart bakery subsidiary (renamed Earthgrains Co.). This was the ideal spin-off situation in several respects. As a small subsidiary of the world’s largest bre
Slide 21: Performance & Strategy Update
Kinetics Spin-Off and Corporate Restructuring Fund Performance & Strategy Update © 2024 Horizon Kinetics LLC ®. All rights reserved. 21
Slide 22: Historical Performance Results
Historical Performance Results The Spin-Off and Corporate Restructuring Fund-LSHUX (Inst. Class) − U.S. focused global all-cap fund comprised of investments in: − Spin-off companies and parent companies of spin-offs. − Subsidiary companies resulting from an equity “carve out” or “partial initial pub
Slide 23: Kinetics Spin Off Fund
Kinetics Spin Off Fund The Spin-Off and Corporate Restructuring Fund - Fund Information Expense Ratios Inception Class Assets* (MM) Ticker CUSIP 12b-1 fee Date Gross Net Advisor A 5.9 5/4/2007 LSHAX 494613557 0.25% 2.21% 1.63% Advisor C 0.3 5/24/2007 LSHCX 494613540 0.75% 2.71% 2.38% Institutional 1
Slide 24: Portfolio Top Holdings
Portfolio Top 10 Holdings The Spin-Off and Corporate Restructuring Fund – March 31, 2024 % of Name Horizon Kinetics’ Perspective Portfolio Texas Pacific Land Corp. is a land owner that generates cash flow via periodic land sales, oil royalties from owned land in Texas, and its water services busines
Slide 25: Portfolio Statistics
Portfolio Statistics The Spin-Off and Corporate Restructuring Fund – March 31, 2024 Fund Characteristics Top 10 Sectors, 4 % Total Net Assets $22.7 million Total Number of Holdings* 22 Investment Style Global Equity Market Cap Focus All Cap Minimum Purchase(1) $2,500 Inception Date 7/11/07 (Inst. Cl
Slide 26: Recent Insights
Recent Insights 1st Quarter 2024 Commentary 4th Quarter 2023 Commentary Reading Length: 33 pages/May 2024 Reading Length: 24 pages/January 2024 Somewhere along the line, people got the idea that we “hate” technology Prefatory Remarks stocks. Perhaps it was because we were among the few to write shor
Slide 27: Appendix
Appendix © 2024 Horizon Kinetics LLC ®. All rights reserved. 27
Slide 28: Management Bios
Management Bios Murray Stahl Steven Bregman Chairman, Chief Executive Officer, Chief Investment Officer President Murray is Chief Executive Officer, Chairman of the Board of Horizon Kinetics Steven is the President of Horizon Kinetics and is a co-founder of the Firm. and is a co-founder of the Firm.
Slide 29: Management Bios
Management Bios Alun Williams Mark Herndon Chief Operating Officer Chief Financial Officer Alun joined the Firm in 2009 and, after 12 years as the firm’s Director of Trading Mark joined the Firm in 2024 and currently serves as Chief Financial and Operations, took over the role of Chief Operating Off
Slide 30: Written Research
Written Research At The Foundation of Our Process Horizon Kinetics Research Reports Horizon Kinetics White Papers Contrarian Research The Equity Yield Curve Eclectic Musings Report Established April 1995 • The Equity Yield Curve, 2012 • Russell 2000® Index Construction: When Small Caps Became a Big
Slide 31: Contact Information
Contact Information Offices: New York, NY 470 Park Avenue South New York, NY 10016 White Plains, NY 1 North Lexington Avenue White Plains, NY 10601 Summit, NJ 25 Deforest Avenue Summit, NJ 07901 Telephone: 646.495.7334 Fax: 646.495.0078 Email: [email protected] Website(s) www.horizonkinetics.co
Slide 32: Definitions
Definitions Beta: A statistic that measures the volatility of the fund, as compared to that of the overall market. The market’s beta is set at 1.00; a beta higher than 1.00 is considered to be more volatile than the market, while a beta lower than 1.00 is considered to be less volatile. The Beta has
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