Pollen Street Group Limited · LSE:POLN
Pollen Street — Honeycomb Investment Trust — H1 2022 Earnings Presentation
25 slides from Pollen Street's earnings presentation, Sep 13, 2022
Slide 1: 13 September 2022
13 SEPTEMBER 2022 Private & Confidential. © Pollen Street 2021
Slide 2: Strong year-to-date performance in H1 2022
Strong year-to-date performance in H1 2022, delivering an annualised NAV return of 8.0% over the period and an aggregated NAV return of 54%1 since the IPO of the fund in December 2015 Investments performing strongly, with arrears ratio continuing to decline alongside 97% of investments being senior
Slide 3: H1 performance in line with consistent long-term performance
10% 9% 8% 8.0% 7% 6% 5% 4% 3% 2% 1% 0% H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H2 2020 H1 2021 H2 2021 H1 2022 H1 performance in line with consistent long-term performance Past performance is no indication of future results. Private & Confidential 3
Slide 4: Honeycomb delivered an annualised NAV return of 8.0% over H1 2022
Honeycomb delivered an annualised NAV return of 8.0% over H1 2022 This robust performance was driven by strong credit asset return of 9.0% annualised as the fund was well deployed and experienced minimal impairments. The strong impairment performance was driven by high concentration of senior and st
Slide 5: Income statement H1 2022
Income Statement (£m) H1 2022 H1 2021 YoY change Investment income for the period was £25.5m, a decrease of £2.8m on H1 2021 as a result of: Investment Income1 25.5 28.3 (10%) – Lower gross yield on the investment portfolio as Impairment charge 0.1 (0.5) n.m. higher yielding mezzanine positions refi
Slide 6: High quality investment portfolio with 97% senior and asset secured
Real Estate Secured Consumer High quality investment portfolio with 97% of the Discounted Fee Receivables portfolio senior and asset secured SME SME CBILS Commercial Mortgages Combination of asset backing, and modest LTVs Other (68% average) provide significant downside Training Loans protection NPL
Slide 7: Debt facilities
Term and Revolving credit facility Mortgage SPV financing CBILs SPV financing Topco revolving debt facility being extended to 2024 and mortgage debt facility upsized and extended to provide long term debt visibility and a lower blended margin Asset portfolio is well hedged with £269m of floating rat
Slide 8: Pollen Street
POLLEN @ STREET
Slide 9: Combination with Pollen Street Capital update
At the General Meeting The Company and Pollen The key timing The Company will update The Company intends to of the Company held on Street are finalising the dependency for shareholders when the propose to Shareholders 1 June 2022, remaining conditions completion is the receipt remaining approvals th
Slide 10: Private capital asset manager with expertise in private equity and credit
As of June 2022 Private capital asset manager with expertise in both private equity and credit Private Equity 44% Proven track record of strong returns at low risk Credit 56% Growing and established blue chip investor base 80+ employees, of which 30+ investment professionals Domain expertise in fast
Slide 11: Track record of deployment and realisations
£1.0bn plus £0.8 in satellite and co-investment deployed in £3.0bn deployed across 98 deals in since 20163 29 investments, 13 realisations returning £1.8bn2 Delivered 11% gross IRRs Delivered 28.7% gross IRR / 2.9x gross realised returns Commingled funds, SMAs, Cross platform strategic partnerships,
Slide 12: Megatrends Reshaping Financial and Business Services
Megatrends Reshaping Financial and Business Services Significant SME Financing New Tech Driving Disruptive Business Models Green Transition Whitespace Financial SMEs: Engine of Underserved by Acceleration in The Challengers Services Getting Economic Traditional EV Financing/ Renewable/ Digital Model
Slide 13: Growth of private markets
($TN) ’21E – ’26E CAGR 23.2 4% 8% 9% 17% 15% 27% 32% 25% 24% 33% 5.4 4% 38% 34% 79% 67% 66% 51% 35% 35% 4.0 11% 13.3 Private Private Real Infrastructure Natural Hedge 2.7 17% Equity Debt Estate Resources Funds Increase Stay the same Decrease 4.4 7.6 2.4 4.6 3.2 1.2 11.1 16% 1.6 1.3 Growth of SWFs an
Slide 14: Pollen Street
POLLEN @ STREET
Slide 15: Growth in AuM and investor base
Continued to grow the investor base in H1 2022 with 45% £0.2bn raised in Credit across Flagship Credit III 3.2 3.0 and SMAs 2.2 The Private Equity business is making good progress towards the launch of Flagship PE V in 2023 in line with previous guidance AuM1 is broken down by strategy as follows: –
Slide 16: Medium-Term Guidance (2–3 yrs)
Medium-Term Guidance (2–3 yrs) AuM £4-5bn medium-term fee paying AuM (c.2–3 years)1 Management Fee Rates c.1.25%–1.50% average fee2 over the long term Performance Fees and c.15%–25% of total Fund Management Revenue3 in average over the long term Carry Fund Management Adjusted Long-term fund manageme
Slide 17: Technical Guidance FY22
Technical Guidance FY22 Continued momentum in fundraising from H1 2022 through into H2 Expected to deliver similar growth in AuM1 in H2 2022 as H1 2022 Therefore the Company is on target to deliver FY22 AuM growth of 10% to 15%, reflecting: AuM – 30% to 40% growth in Credit AUM – Small decline in pr
Slide 18: Investment highlights of the combined group
Highly experienced Private Capital Fast-growing with Manager with opportunities to expertise across accelerate from the Private Credit and combination Private Equity Attractive Highly visible and financial profile growing dividends Private & Confidential 18
Slide 19: Contacts
Managing Partner CFO +44 20 3728 6746 +44 20 3922 0156 [email protected] [email protected] PARTNER Corporate Development Director +44 20 3728 6747 +44 203 965 5081 [email protected] [email protected] Private & Confidential 19
Slide 20: Pollen Street
POLLEN @ STREET
Slide 21: The HONY portfolio comprises 35 investments
The HONY portfolio comprises 35 investments, balanced across consumer, SME and property sub-markets and stable during the course of 2022 The portfolio is well-diversified, with an average exposure of £15.8m, maximum single exposure of £56.9m and the ten largest investments representing 66.1% of Net
Slide 22: Definitions
Item Definition Interest income, less amortised acquisition costs, less third-party servicing costs, Investment Yield over average credit assets, annualised Impairments and Write-Offs Includes stages 1, 2 & 3, over average credit assets, annualised Equity & W/C shows the effect on returns of NAV con
Slide 23: Important notice
THIS PRESENTATION IS NOT AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL SECURITIES. IT IS SOLELY FOR USE AT AN INVESTOR PRESENTATION AND IS PROVIDED FOR INFORMATION ONLY. THIS PRESENTATION DOES NOT CONTAIN ALL OF THE INFORMATION THAT IS MATERIAL TO AN INVESTOR. This investor presentation (the “
Slide 24: Track record notes
Track record excludes run off legacy deals from Pollen Street Secured Lending plc which were made "Invested" or "Cost" refers to the total equity invested, including transaction fees and hedging costs, net prior to PSC managing the vehicle. In addition it excludes the run off consumer organic loan o
Slide 25: Pollen Street
POLLEN STREET
Honeycomb Investment Trust — H1 2022 Earnings Presentation on 6ix