Gresham House Energy Storage Fund Plc GBP · LSE:GRID
Gresham House Energy Storage Fund Plc GBP — Gresham House Strategic — Investor Presentation (January 2018)
24 slides from Gresham House Energy Storage Fund Plc GBP's investor presentation, Jan 31, 2018
Slide 1: Gresham House Strategic plc (GHS) Quoted Investment Company
Gresham House Strategic plc (GHS) Quoted Investment Company Strategic Public Equity – Actively engaged investing in smaller companies with value characteristics 31 January 2018 www.ghsplc.com
Slide 2: Gresham House Strategic plc - The Opportunity
Gresham House Strategic plc - The Opportunity ▪ Compelling opportunity to buy at a 25% discount to NAV1 ▪ Concentrated portfolio with considerable potential upside, Relative Performance 130 0% attractively valued and tracking in line with investment 125 -5% manager’s thesis 120 -10% 115 -15% 110 ▪ P
Slide 3: Value stocks set to outperform
Value stocks set to outperform 2.0 Value Versus Growth ▪ Relative performance of value versus growth +2 Std Dev 1.8 provides potentially strongest argument for value in +1 Std 1.6 Dev 40 years Trend 1.4 -1 Std Dev 1.2 -2 Std ▪ The UK Market is trading on valuation multiples Dev 1.0 towards the upper
Slide 4: Smaller companies attractively priced
Smaller companies attractively priced FTSE All Share median EV/EBITDA multiple ▪ The valuation differential between large stocks above (x) 14.0 £250m and smaller, less liquid stocks is significant 11.8 12.0 9.5 10.0 8.0 ▪ The valuation dislocation has been increasing 6.0 4.0 2.0 ▪ Significant opport
Slide 5: Strategic Public Equity - The Investment Strategy; Differentiated and Specialist
Strategic Public Equity- The Investment Strategy; Differentiated and Specialist Influential minority stakes (5%-25%) and active management of investments (Board introductions, advisory) Highly engaged strategy Adding value as an active investor supporting strong management teams Targeting inefficien
Slide 6: Value enhancement through engagement
Value enhancement through engagement ▪ Cornerstone and underwrite ▪ Strategic objectives and new issue of equity milestones Strategic and ▪ Provision of growth capital Provision of corporate ▪ Finance and operations capital advice over the long-term (permanent ▪ M&A and due diligence capital) ▪ Debt
Slide 7: Discount to NAV and Strategy offer a 'Double Discount'
Discount to NAV and Strategy offer a ‘Double Discount’ 1. GHS plc shares currently trade at a 25%1 discount to NAV 2. The NAV represents a concentrated portfolio of stocks which GHAM believes to be trading below intrinsic value: ▪ Gresham House Investment theses for the portfolio holdings identifies
Slide 8: GHS existing portfolio – Attractively valued with significant potential upside
GHS existing portfolio – Attractively valued with significant potential upside NAV £41.3m (1,131.3)1 £17.4m Undervalued with strong £1.5m Growth capital supporting growth prospects strategic refocus £3.5m Buy & build, organic growth £1.4m Strategic change and plus strong cash generation expansion Re
Slide 9: Investment team has strong performance credentials – Over 15yr track record
Investment team has strong performance credentials – Over 15yr track record The team launched and managed the Strategic Public Equity strategy while working at SVG Investment Managers Company Fund Vehicle Years Track Record PFS Downing Active 73% total return since inception vs 55% Downing LLP OEIC
Slide 10: The Team
The Team Combining industry expertise, technical ability and substantial investment experience Investment Committee Investment Team Tony Dalwood, Fund Manager and IC Chairman Graham Bird, Fund Manager and member of IC Prior to Gresham House Tony established SVGIM and launched Graham leads the Strate
Slide 11: Conclusion
Conclusion Portfolio investments compare Attractive entry favourably to the point – 25% indices on discount to NAV valuation, growth forecasts and gearing Alignment - Gresham Significant potential House plc and team upside – Realising members owning intrinsic value of >20% of the Fund portfolio Inve
Slide 12: Appendix
Appendix 12
Slide 13: Top 10 Shareholders
Top 10 Shareholders Shareholders % Gresham House plc 19.3% M&G 11.7% Smith & Williamson 8.6% River & Mercantile 8.6% Unicorn Asset Management 4.6% Hargreaves Lansdown 3.5% Berkshire County Council 2.9% Charles Stanley 2.9% Janus Henderson Investors 2.2% Investec Wealth & Investment 2.2% Source: As o
Slide 14: Highlights
Highlights 2009 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 August 2016: April 2017: December 2015: 2009: August 2015: New ‘sister’ fund - Maiden dividend Name change to Realisation Appointment of Gresham House and share buy- Gresham House strategy GHAM Strategic Public back worth Strategic Plc Equity Fund L
Slide 15: IMI Mobile – GHS shareholding c.15%
IMI Mobile – GHS shareholding c.15% * “Undervalued and poorly understood, significant re-rating opportunity” The Story Value creation to realise intrinsic value IMI provides software and services centred around mobile data and consumer engagement, helping enterprise clients engage and transact with
Slide 16: Northbridge – GHS shareholding c.11.5%
Northbridge – GHS shareholding c.11.5% * “Recovery and growth capital investing alongside management” *Held across two funds The story Value creation to realise intrinsic value Northbridge manufactures specialist industrial equipment for sale and rental and is a leading global supplier of load banks
Slide 17: Be Heard – GHS shareholding c.10%
Be Heard – GHS shareholding c.10% “Primary growth capital, supporting buy & build strategy” The story Value creation to realise intrinsic value Be Heard's strategy is to create a mid-size digital marketing network providing more flexibility than holding groups and greater scale than digital speciali
Slide 18: Quarto Group – GHS shareholding c.4%
Quarto Group – GHS shareholding c.4% “Secondary with opportunity for growth capital” The story Value creation to realise intrinsic value Quarto is a leading global illustrated book publishing and distribution group. Quarto creates more than 1,500 adult and children's books a year, sold into 35 count
Slide 19: Case studies
Case studies Holding in company 16.2% Convertible loan note and private equity Secondary – Recovery and growth Growth capital supporting buy and build strategy ▪ Earnings recovery (refocus on core business) ▪ Earnings growth (bolt on acquisitions and synergies) ▪ Margin recovery (cost reduction in n
Slide 20: Case studies
Case studies Holding in company 4.6% Holding in company 2.7% Primary – Growth capital supporting roll-out strategy Secondary – operational gearing and AUM growth ▪ Multiple expansion / re-rating (proof of concept) ▪ Earnings Growth (organic) ▪ Earnings growth (through site roll-out) ▪ Return of cash
Slide 21: Case studies
Case studies Holding in company 2.1% Holding in company 3.1% Secondary – Growth capital to support strategic refocus Secondary – Recovery and cash generation ▪ Margin growth (cost control) ▪ Cash generation (cost cutting) ▪ Earnings growth (focus on higher margin services, shift away ▪ Resolution of
Slide 22: Case studies
Case studies Holding in company 2.1% Profits growth, cash generation, improved valuation ▪ Acceleration of earnings growth via active growth strategy ▪ Effective sales team implementation and expansion ▪ Margin growth; expansion into UK mid-markets companies ▪ Regulatory changes requiring businesses
Slide 23: Important Information
Important Information This presentation (the “Presentation”) is issued by Gresham House Asset The internal rates of return or IRRs presented on a “gross” basis do not reflect any Management Ltd (“GHAM”), Investment Manager for Gresham House Strategic plc management fees, carried interest, taxes and
Slide 24: Gresham House flagship quoted Strategic Public Equity fund
Gresham House flagship quoted Strategic Public Equity fund Gresham House Asset Management Ltd (GHAM) Octagon Point www.ghsplc.com 5 Cheapside [email protected] London 020 3837 6270 EC2V 6AA GHAM is regulated by the Financial Conduct Authority (FCA) - number 682776 Michael Hart Graham Bird Head o
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