Aventus Capital Inc. · TSXV:AVTS
Aventus Capital — The Westaim — Q3 2023 Earnings Presentation
35 slides from Aventus Capital's earnings presentation, Nov 14, 2023
Slide 1: Q3 2023 Investor Presentation
Q3 2023 Investor Presentation November 14, 2023
Slide 2: Disclaimer
Disclaimer Safe Harbour Statement This document and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part either directly or indirectly without the prior written consent of each of The Westaim Corporation (“Westaim” or the “Corporation” or t
Slide 3: Disclaimer
Disclaimer Safe Harbour Statement Supplementary financial measures concerning the Arena FINCOs and Arena (the “Arena Supplementary Financial Measures”) contained in this presentation are unaudited and have been derived from the unaudited consolidated financial statements of Arena FINCOs and Arena fo
Slide 4: Important Disclosures
Important Disclosures Non-GAAP Measures Westaim Westaim reports its consolidated financial statements using Generally Accepted Accounting Principles (“GAAP”) and accounting policies consistent with IFRS. Westaim uses both IFRS and non-generally accepted accounting principles (“non-GAAP”) measures to
Slide 5: Important Disclosures
Important Disclosures Arena With respect to the section on Arena the information therein is being provided solely in relation to the management company and the investment manager, including their funds, subsidiaries and affiliates. Returns shown are unaudited. Past performance is not indicative or a
Slide 6: The Westaim Corporation
The Westaim Corporation The Westaim Corporation Westaim is a publicly listed (TSXV:WED) Canadian investment holding company specializing in providing long-term capital to businesses operating primarily within the global financial services industry. Our focus has been, and continues to be, to seek hi
Slide 7: Westaim Q3 2023 Quarterly Operating Highlights
Westaim Q3 2023 Quarterly Operating Highlights Westaim's Q3 2023 earnings continue to be driven by gains on its Skyward Specialty ownership • Q3 2023 Net Income attributable to AIGH (100%) was $4.1 million compared to Q3 2022 Net Loss attributable to AIGH of $8.2 million; YTD 2023 Net Income attribu
Slide 8: Westaim Summary Quarterly Operating Results
Westaim Summary Quarterly Operating Results • Profit and comprehensive income for Q3 2023 was $23.0 Three months Nine months million ($0.16 diluted earnings per share) compared to a loss ended September 30 ended September 30 and comprehensive loss of $16.7 million ($0.12 diluted loss (Amounts in mil
Slide 9: Westaim Summary Statement of Financial Position
Westaim Summary Statement of Financial Position As at September 30, 2023 June 30, 2023 December 31, 2022 • Book value per fully diluted share increased $1.00 (39.1%) to $3.56 at September 30, 2023 from $2.56 at December 31, (Amounts in millions of US$ except per share data) 2022. Book value per full
Slide 10: Westaim Diluted Earnings per Share: Three months ended September 30, 2023
Westaim Diluted Earnings per Share (US$): Three months ended September 30, 2023 $0.01 - - $0.16 $0.15 - Income from Skyward Income from Arena FINCOs Income from Westaim holding Net impact of options and Fully diluted EPS Specialty and ASOF Arena company net expenses other Three months ended (excludi
Slide 11: Westaim Book Value per Share: Three months ended September 30, 2023
Westaim Book Value per Share (US$): Three months ended September 30, 2023 $0.15 $0.01 $0.01 - $0.02 - $3.56 $3.37 Fully diluted BVPS Income from Income from Income from Westaim holding Impact of NCIB Net impact of options Fully diluted BVPS June 30, 2023 Skyward Arena FINCOs Arena company net expens
Slide 12: Westaim Diluted Earnings per Share: Nine months ended September 30, 2023
Westaim Diluted Earnings per Share (US$): Nine months ended September 30, 2023 $1.10 ($0.04) $0.03 ($0.04) - $1.05 Income from Skyward Loss from Arena FINCOs Income from Arena Westaim holding Net impact of options and Fully diluted EPS Specialty and ASOF company net expenses other Nine months ended
Slide 13: Westaim Book Value per Share: Nine months ended September 30, 2023
Westaim Book Value per Share (US$): Nine months ended September 30, 2023 $1.10 ($0.04) $0.03 ($0.04) $0.04 ($0.09) $3.56 $2.56 Fully diluted BVPS Income from Loss from Income from Westaim holding Impact of NCIB Net impact of Fully diluted BVPS December 31, 2022 Skyward Arena FINCOs Arena company net
Slide 14: Arena Investors Global Holdings overview
All data is as of September 30, 2023 unless otherwise specified Arena Investors Global Holdings, including its joint ventures and affiliates, is a global financial institution with over 150 people across 8 global offices and operating in over 20 countries
Slide 15: About Arena Investors
About Arena 15 • Credit-oriented, asset backed-orientated investments, but not “traditional private credit”. ABOUT ARENA • Broad Platform – capabilities across Corporate, Real Estate, Structured Finance, and Corporate INVESTORS ( 1 ) Securities allow the firm to find the most compelling opportunitie
Slide 16: Arena – Key Highlights
Arena – Key Highlights 16 • Arena is a growing global financial institution • Mandate flexibility and diversification contribute to consistency across cycles Differentiated Approach • Proprietary sourcing and global infrastructure with a focus on small size • Servicing and systems that govern proces
Slide 17: Arena – Q3 2023 Quarterly Result Highlights
Arena – Q3 2023 Quarterly Result Highlights 17 YTD YTD (dollars in millions) Q3 2023 Q3 2022 Q3 2023 Q3 2022 Arena Investors Management Fees $ 7.7 $ 8.1 $ 23.2 $ 23.6 Q3 2023 Results: Servicing Fees 2.9 3.0 8.3 8.3 Other Income 0.1 (0.3) 0.6 (0.1) • Net income for Q3 2023 was $4.1 million (Q3 2022:
Slide 18: Arena – Investment vehicles
Arena – Investment vehicles (1) 18 $ 3 . 3 B AU M (2) Permanent Capital (Arena F INCOs) EXCESS CAPACIT Y OPPO RT UN IT IES • Arena Finance $0.9B A R E N A F U L LY D I V E R S I F I E D • Arena Origination Company New Zealand S T R AT E G Y $ 2 . 1 B Open-ended Evergreen Funds • Arena Special Opport
Slide 19: Arena – Investing: Performance & Deployment (drawdown funds)
Arena – Investing: Performance & Deployment 19 • The following table presents the performance data for the significant drawdown funds: As of September 30, 2023 Original Capital MoIC2 IRR3 4 Year of Realized Unrealized Total Primary Investment AUM Capital Invested ($ in millions) inception Value Valu
Slide 20: Arena – Investing: Performance & Deployment (open-ended funds)
Arena – Investing: Performance & Deployment 20 • The following table presents the performance data for the significant open-ended funds: As of September 30, 2023 Returns (%) 4 Since Inception Year of Quarter-to-date Year-to-date Primary Investment Strategy AUM (Annualized) inception ($ in millions)
Slide 21: Arena Investors – Assets Under Management
Arena Investors – Assets Under Management Through September 30, 2023 21 • Arena Investors’ assets under management (including undrawn commitments) were $3.3B at September 30, 2023. From December 31, 2015, to September 30, 2023, AUM has grown at a CAGR of ~42%. In 2023, Arena is launching/has launche
Slide 22: Arena – Deal Structure Aligns Arena Management and Westaim
Arena – Deal Structure Aligns Arena Management and Westaim • Arena was founded by Dan Zwirn and Westaim in August 2015 under an arrangement designed to align Arena’s senior management interests very tightly with those of Westaim and its shareholders. The principal elements of the arrangement include
Slide 23: Arena
fs ARENA
Slide 24: Arena FINCOs: Summary of Operating Results
Arena FINCOs: Summary of Operating Results Three months ended Nine months ended • Q3 2023 Net Income was $0.9 million (+0.6% net September 30 September 30 investment return) compared to Q3 2022 Net Loss of (Currency amounts in millions of US$) 2023 2022 2023 2022 $2.6 million (-1.5% net investment r
Slide 25: Arena FINCOs: Summary of Net Assets
Arena FINCOs: Summary of Net Assets (Currency amounts in millions of US$) Fair Value September 30, 2023 June 30, 2023 December 31, 2022 • The combination of the secured notes and Cash and cash equivalents $12.6 $15.4 $16.7 revolving credit facility are being utilized for Investments: efficient treas
Slide 26: Arena FINCOs: Portfolio breakdown
Arena FINCOs: Portfolio breakdown as at September 30, 2023 Equity / REO / Hard Other Securities Corporate Assets(1) 21% Private 52% Investments 26% Debt 48% Structured Finance and Assets 28% Real Estate Investments 25% Arena FINCOs held 225 positions at September 30, 2023 compared to 297 positions a
Slide 27: Company Update: Skyward Specialty Insurance
SKYWARD SPECIALTY INSURANCE COMPANY UPDATE
Slide 28: Skyward Specialty at a Glance
SKYWARD SPECIALTY AT A GLANCE Business Overview Select Financial Metrics • A rapidly growing and innovative specialty insurance company, YTD FY (US$ millions) delivering commercial property and casualty products and solutions on 2023(1) 2022(1) a non-admitted and admitted basis Select Income Stateme
Slide 29: Skyward Specialty Trading Price and Volume
SKYWARD SPECIALTY TRADING PRICE AND VOLUME • At December 31, 2022, Westaim's estimated fair value of Skyward Specialty’s fully diluted common shares, using multiple valuation techniques, was determined to be $15.00 per share • At September 30, 2023, the Westaim’s estimated fair value of the Skyward
Slide 30: Skyward Specialty – Summary Statements of Operations
SKYWARD SPECIALTY - SUMMARY STATEMENTS OF OPERATIONS (1) (Currency amounts in millions of US$) Three months ended September 30 Nine months ended September 30 Written Premium Growth and Revenue As at 2023 2022 2023 2022 • GWP increased 31.6% to $355.7 million in Q3 2023 vs. $270.3 million in Q3 2022;
Slide 31: Skyward Specialty – Summary Balance Sheets
SKYWARD SPECIALTY - SUMMARY BALANCE SHEETS (Currency amounts in millions of US$) As at September 30, 2023 December 31, 2022 Assets • Total Skyward Specialty stockholders’ equity increased Investments $1,395.9 $1,082.4 to $535.4 million or 27.0% from Q4 2022; increase in Cash and cash equivalents 53.
Slide 32: Appendix – Skyward Specialty Insurance
SKYWARD SPECIALTY INSURANCE APPENDIX
Slide 33: Appendix – Skyward Specialty Supplementary Financial Measures
APPENDIX – SKYWARD SPECIALTY SUPPLEMENTARY FINANCIAL MEASURES (1) • Adjusted operating income (loss) – Skyward Specialty defines adjusted operating income (loss) as net income (loss) excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or
Slide 34: Appendix – Skyward Specialty Supplementary Financial Measures
APPENDIX – SKYWARD SPECIALTY SUPPLEMENTARY FINANCIAL MEASURES (1) • Adjusted Loss Ratio / Adjusted Combined Ratio – Skyward Specialty defines adjusted loss ratio and adjusted combined ratio as the corresponding ratio (calculated in accordance with GAAP), excluding losses and LAE related to the LPT a
Slide 35: The Westaim Corporation contact details
The Westaim Corporation 70 York Street, Suite 1700 Toronto, Ontario Canada M5J 1S9 www.westaim.com [email protected]