Hansa Investment Company Ltd · LSE:HAN
Hansa Investment — Hansa Trust — Investor Presentation (February 2018)
45 slides from Hansa Investment's investor presentation, February 2018
Slide 1: Hansa Trust February 2018
HANSA TRUST PLC HANSA TRUST February 2018
Slide 2: Hansa Trust is a proprietor based investment trust
Hansa Trust is a proprietor based investment trust blending best‐in‐class third party funds, a global equity portfolio and a strategic holding in Ocean Wilsons Holdings Managed by Hansa Capital Partners the trust adopts a long‐term approach, ignoring short‐term noise, with a focus on the growth and
Slide 3: Index
HANSA TRUST Index • History of Hansa & Strategic Review • Performance Review • Portfolio Positioning & Characteristics • Ocean Wilsons Holdings • Market Outlook • Appendix 3
Slide 4: History of Hansa & Strategic Review
History of Hansa & Strategic Review 4
Slide 5: Hansa timeline
HANSA TRUST Hansa timeline Rea Brothers acquire the Finsbury Trust management of a number of becomes Hansa Trust invesment companies, including Scottish & Mercantile Rea Brothers purchases 58% of Ocean Wilsons Holdings Limited on behalf Strategic review of Hansa Hansa Trust began life as the Alto of
Slide 6: Corporate structure
HANSA TRUST Corporate structure 6
Slide 7: Strategic Review
HANSA TRUST Hansa Trust Strategic Review December 2017 Description Portfolio Hansa Trust Weight January 2014 Core Regional Regional exposure based on the output of the Hansa 34.6% Silo House View. Description Portfolio Weight UK Special situation UK equities 65% Equities but also included larger
Slide 8: Performance Review
Performance Review 8
Slide 9: Performance to end December 2017
HANSA TRUST Performance to end December 2017 31 Dec 2017 – Financial YTD* One year 5 years (p.a.) 15 years (p.a.) 16 Feb 2018 NAV Performance TR 8.5% 11.2% 8.2% 12.3% NAV Performance TR ‐2.2% NAV Performance ex. OWHL TR 9.0% 13.2% 9.5% 9.6% NAV Performance ex. OWHL TR ‐1.3% Ordinary Share TR 21.6% 2
Slide 10: Performance of the different silos one year to December 2017
HANSA TRUST Performance of the different silos one year to 31 December 2017 25% 20% 15% 10% 5% 0% Core Regional Funds Global Equities Thematic Diversifying (ex OWHL) Ocean Wilsons Cash/FX Holdings Limited 10
Slide 11: Core Regional Funds and Global Equities holdings
£‐ £5,000,000 £10,000,000 £15,000,000 £20,000,000 £25,000,000 £30,000,000 £35,000,000 £40,000,000 Goodhart: Hanjo 3,653,592 SISF Asian Total Return 1,806,424 Findlay Park American 1,724,103 Indus Japan Long Only 1,611,985 Adelphi Eur Select Equity 1,036,736 BlackRock Eur Hedge 973,093 Prince Street
Slide 12: Core Regional Funds and Global Equities holdings (comparison)
£‐ £10,000,000 £20,000,000 £30,000,000 £40,000,000 £50,000,000 £60,000,000 £70,000,000 £80,000,000 Goodhart: Hanjo 4,499,604 Findlay Park American 4,125,277 SISF Asian Total Return 3,691,655 Select Equity Offshore 3,669,933 Vulcan Value Equity 2,893,279 Indus Japan Long Only 2,417,562 BlackRock Eur
Slide 13: Performance of less correlated funds June 2016 to December 2017
HANSA TRUST Performance of less correlated funds 1 June 2016 to 31 December 2017 A basket of lower‐correlated funds was purchased in June/July 2016. The performance since has been positive and outperformed bonds and cash. 25.0% 20.0% 15.0% Performance (GBP) 10.0% 8.6% 6.3% 5.0% 1.8% 1.8% 0.0% ‐5.0%
Slide 14: Transactions January 2017 to December 2017
HANSA TRUST Transactions 1 January 2017 to 31 December 2017 • Equity Purchases £36.4m: • Equity Sales £41.9m: – CK Hutchison £2.8m – Galliford Try PLC ‐ £7.8m (profit of £4.1m) – Berkshire Hathaway £2.7m – NCC Group ‐ £6.8m (profit of £4.5m) – Exor NV £2.7m – Experian Group Limited £6.3m (profit of
Slide 15: Global Equities – performance by size of holding
HANSA TRUST Global Equities – performance by size of holding 31 December 2017 1 Year 3 Year Performance Performance Value % of (or since (or since Initial Purchase 31/12/17 Total % of Global initial initial Security Name Date (GBP) NAV Equity Silo purchase) purchase) Hansteen Holdings PLC 25/11/2005
Slide 16: The transition from UK Equities to Global
HANSA TRUST The transition from UK Equities to Global as at end December 2017 % of holding Purchases Geographic Exposure by Listing Sales sold Berkshire Hathaway Asia Galliford Try 100% 19% Europe Liberty Global Experian 100% 41% Interactive Brokers Cape 100% Bayer Hargreaves Services 100% CVS Healt
Slide 17: Portfolio Positioning & Characteristics
Portfolio Positioning & Characteristics 17
Slide 18: Current Positioning
HANSA TRUST Current Positioning (as at 31 December 2017) 25% 19.8% 20% 15% 13.2% 11.1% 10% 8.4% 7.0% 6.4% 6.9% 5% 3.7% 4.1% 3.8% 3.6% 3.2% 1.1% 1.4% 1.6% 1.8% 1.5% 1.0% 0.5% 0% 18
Slide 19: Portfolio Characteristics
HANSA TRUST Portfolio Characteristics (as at 31 December 2017) Look‐through analysis of Hansa Trust portfolio, including holdings in Ocean Wilson (Investments) Ltd* Geographic Exposure 2.4% Sector Exposure 2.3% 4.6% 2.3% 2.3% 0.8% 1.5% 2.9% 6.2% 18.2% 9.6% 35.7% 6.4% 10.4% 6.5% 14.0% 7.2% 10.5% 7.7%
Slide 20: Other Portfolio Characteristics
HANSA TRUST Other Portfolio Characteristics (as at 31 December 2017) Liquidity Annual 3rd Party Management Fees on Underlying Holdings Cash 1.5 < x ≤ 2% 2% 1 < x ≤ 1.5% 4.5% 4.6% Fixed 1 Week 0% 34% 35% 40.2% 0 < x ≤ 1% 50.7% 1 month 3 months 9% 11% > 6 months 4% 6 months 5% The position in Ocean Wi
Slide 21: Dividend Profile
HANSA TRUST Dividend Profile Dividend Policy The Trust’s dividend policy was updated in 2014, and it is now to pay two similar interim dividends each year. Barring unforeseen circumstances, the dividend is expected to grow over time reflecting the longer term returns of the portfolio. Under certain
Slide 22: Discount to asset value
HANSA TRUST Discount Hansa Trust Ord and A combined Hansa Trust Ord and A combined (relative to AIC overall 0% average discount) ‐5% 10% ‐10% 5% 0% ‐15% ‐5% ‐20% ‐10% ‐25% ‐15% ‐30% ‐20% ‐25% ‐35% ‐30% ‐40% ‐35% ‐45% ‐40% ‐50% ‐45% May‐08 Nov‐08 May‐09 Nov‐09 May‐10 Nov‐10 May‐11 Nov‐11 May‐12 Nov‐1
Slide 23: Ocean Wilsons Holdings
Ocean Wilsons Holdings 23
Slide 24: Ocean Wilsons Holdings
HANSA TRUST Ocean Wilsons Holdings Ocean Wilsons Holdings is a Bermudian investment holding company whose main assets are a controlling interest in Wilsons Sons and an international investment portfolio, both run with a long‐term view. The Oceans holding is controlled by the Hansa Trust board 24
Slide 25: Wilson Sons
HANSA TRUST Wilson Sons Revenue EBITDA Wilson Sons is among Brazil’s largest and oldest port, maritime and logistics services companies 25
Slide 26: Wilson Sons
HANSA TRUST Wilson Sons Despite the challenges faced in Brazil in recent years, Wilsons has generated significant economic value 26
Slide 27: Wilson Sons
HANSA TRUST Wilson Sons Wilson Sons operates in a market with significant structural growth potential 27
Slide 28: Ocean Wilsons Investments (Limited)
HANSA TRUST Ocean Wilsons Investments (Limited) as at 31 December 2017 30% 28.8% 25% 20% 15% 13.3% 9.4% 10% 8.2% 6.5% 6.4% 6.6% 5% 3.0% 3.2% 2.7% 2.1% 2.0% 2.3% 2.6% 1.0% 1.0% 0.5% 0.4% 0% Ocean Wilsons Investments (Limited) is an investment portfolio focused on achieving long‐term returns while emp
Slide 29: Market Outlook
Market Outlook 29
Slide 30: Market outlook: a choppy start to the year
HANSA TRUST Market outlook…..a choppy to start to the year Start of year (1 Jan 2018) Peak (26 Jan 2018) to LC Returns as of 16 Feb 2018 to Peak (26 Jan 2018) Trough (9 Feb 2018) YTD Equities ‐ Regions MSCI ACWI + FM NR USD 7.3 ‐8.9 2.0 MSCI World (Developed) NR USD 7.0 ‐8.8 1.8 MSCI EM (Emerging Ma
Slide 31: Market outlook: reasons for volatility
HANSA TRUST Market outlook…..reasons for volatility Source: Deutsche Bank Source: FactSet ….the catalyst for the correction appeared to be disappointing inflation numbers. Certainly the market had started to bake in persistently low inflation but a key factor is also market complacency 31
Slide 32: Market outlook: correction or crash?
HANSA TRUST Market outlook……correction or crash? Aggregate Index Historical Percentile 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% P/E to Growth EV/Sales EV/EBITDA Price/Book Forward P/E FCF yield Cyclically adjusted P/E S&P500 STOXX600 Source: Goldman Sachs ……under a wide range of valuation measure
Slide 33: Market outlook: correction or crash?
HANSA TRUST Market outlook……correction or crash? Source: Deutsche Bank …….economic growth is largely improving in both developed and emerging markets. No sign of recession any time soon 33
Slide 34: Market outlook: correction or crash?
HANSA TRUST Market outlook……correction or crash? Source: Standard & Poors. Thompson Financial. FactSet. Credit Suisse …..stronger economic growth is feeding through to improved corporate profitability. 34
Slide 35: Market outlook: correction or crash?
HANSA TRUST Market outlook……correction or crash? ……clearly we are at an inflection point in the liquidity cycle but still a huge amount of liquidity is being pumped into the system. A significant jump in yields may limit equity returns 35
Slide 36: Market outlook: correction or crash? Excess & Exuberance
HANSA TRUST Market outlook……correction or crash? Excess & Exuberance Arguments for….. Arguments against….. Pockets of consumer excess in areas such Mortgage debt, which is far more important, auto debt is well under control Overall country debt levels still high in Banks are key to healthy economies
Slide 37: Market outlook: correction or crash?
HANSA TRUST Market outlook……correction or crash? Global Financial Crisis Liquidity pumped into the system ? via zero interest rate policies and QE The avoidance of a Liquidity global collapse in economies and the cycle banking system saw valuations inflects normalise across asset classes Equities ri
Slide 38: Positioning: technology and innovation
HANSA TRUST Positioning……technology and innovation Source: Financial Times Source: GAM. New Relic ……despite the strong performance, valuations remain attractive, especially if growth is taken into consideration. Tech has important implications geographically and for existing industries 38
Slide 39: Positioning: emerging and frontier markets
HANSA TRUST Positioning……emerging and frontier markets Source: GAM. Statista Digital Market Outlook …..EM and FM remain structurally attractive combined with lower valuations 39
Slide 40: Positioning: bonds
HANSA TRUST Positioning……bonds Source: Financial Times …..bonds remain unattractive albeit we watch the current rise in yields 40
Slide 41: Summary as at December 2017
HANSA TRUST Summary as at 31 December 2017 Lower Risk Assets Bonds Cash 2.2% 1.8% Directional Hedge Funds 4.0% Hedge Funds Private Equity (non 7.1% directional) 7.6% Wilson Sons Riskier Assets 19.8% Strategic Allocation Equities 57.5% …..we’re currently running 12% in defensive assets. We’re minded
Slide 42: Conclusion
HANSA TRUST Conclusion • Clearly markets are in the more mature stages of their lifecycle • Higher valuations remove the safety net and can lead to higher portfolio volatility and being susceptible to disappointment • For this reason we are getting prepared to add to more defensive positions as the
Slide 43: Appendix
Appendix 43
Slide 44: Performance of the different silos three years to December 2017
HANSA TRUST Performance of the different silos three years to 31 December 2017 60% 50% 40% 30% 20% 10% 0% Core Regional Funds Global Equities Thematic Diversifying (ex OWHL) Ocean Wilsons Holdings Cash/FX Limited 44
Slide 45: Important Notice
IMPORTANT NOTICE This presentation pack is issued by Hansa Capital Partners LLP, which is authorised and regulated by the Financial Conduct Authority. Hansa Capital Partners LLP is the Portfolio Manager and Company Secretary to Hansa Trust PLC. Investment Trusts are UK Public Listed companies and ar