Hansa Investment Company Ltd · LSE:HAN
Hansa Investment — Investor Presentation (January 2019)
37 slides from Hansa Investment's investor presentation, January 2019
Slide 1: Hansa Trust PLC January 2019
i HANSA TRUST PLC January 2019
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 a number of Finsbury Trust becomes investment companies, including Hansa Trust Scottish and Mercantile Rea Brothers purchases Strategic review of Hansa 58% of Ocean Wilsons Scottish and Trust initiated Holdings Limited Mercantile becomes Hansa Trust be
Slide 6: Corporate structure
HANSA TRUST Corporate structure 6
Slide 7: Strategic Review December 2018
HANSA TRUST Hansa Trust Strategic Review 31 December 2018 Description Portfolio Hansa Trust Weight January 2014 Core Regional Core Regional exposure based on the output 32.9% of the Hansa House View. Description Portfolio Thematic Thematic Growth sectors such as 5.5% Weight biotechnology and tec
Slide 8: Performance Review
Performance Review 8
Slide 9: Performance to end December 2018
HANSA TRUST Performance to end December 2018 Financial YTD 2018 2017 5 years (p.a.) 15 years (p.a.) NAV Performance TR 2.6% 0.5% 11.2% 4.7% 10.2% NAV Performance ex. OWHL TR ‐0.1% ‐2.4% 13.3% 4.7% 7.9% Ordinary Share TR 4.4% 0.0% 27.7% 5.9% 10.2% ‘A’ Ordinary Share TR 1.1% 0.6% 21.2% 5.2% 9.9% FTSE
Slide 10: Performance of the different silos one year to December 2018
HANSA TRUST Performance of the different silos one year to 31 December 2018 15% 10% 5% 0% ‐5% ‐10% Core Regional Funds Thematic Global Equities Ocean Wilsons Holdings Diversifying Assets Cash/FX Exposure Ltd 10
Slide 11: Contribution to performance by holding
‐£10,000,000 £‐ £2,000,000 £4,000,000 £6,000,000 £8,000,000 ‐£8,000,000 ‐£6,000,000 ‐£4,000,000 ‐£2,000,000 Findlay Park American 911,922 Select Equity Offshore 202,717 Odey Absolute Return 170,682 Pershing Square 18,257 BlackRock Eur Hedge 13,130 Egerton Long ‐ Short 36,523 SR Global Frontiers 285,
Slide 12: Holdings by value across silos
£‐ £10,000,000 £20,000,000 £30,000,000 £40,000,000 £50,000,000 £60,000,000 £70,000,000 £80,000,000 £90,000,000 £100,000,000 Findlay Park American 6,296,321 Select Equity Offshore 5,112,292 Vulcan Value Equity 4,061,349 SISF Asian Total Return 3,357,688 Goodhart: Hanjo 3,029,073 BlackRock Eur Hedge 2
Slide 13: Performance of less correlated funds June 2016 to December 2018
HANSA TRUST Performance of less correlated funds 1 June 2016 to 31 December 2018 A basket of lower‐correlated funds have been purchased since June/July 2016. The performance since has been positive and outperformed bonds and cash. 40% 30% 20% Performance (GBP) 8.5% 10% 6.9% 4.2% 1.4% 0% ‐10% ‐20% ‐3
Slide 14: Transactions during 2018
HANSA TRUST Transactions during 2018 • Equity Purchases £18.2m: • Equity Sales £12.9m: – KT Corp ADR £2.9m – Informa Plc £3.3m (profit of £2.2m) – Orange £2.6m – Softbank £2.2m (loss of £0.3m) – C&C Group PLC £2.3m – CBRE Group Inc £2.1m (profit of £0.3m) – Coca‐Cola Bottlers Japan Holdings £2.1m –
Slide 15: Global Equities – performance by size of holding
HANSA TRUST Global Equities – performance by size of holding 31 December 2018 1 Year 3 Year Performance Performance % of (or since (or since Initial Purchase Value Total % of Global initial initial Security Name Date (GBP) NAV Equity Silo purchase) purchase) Berkshire Hathaway Inc 03/04/2017 3,879,6
Slide 16: Global Equities Silo as at December 2018
HANSA TRUST Global Equities Silo as at 31 December 2018 Geographic Exposure by Listing Performance 1 January 2018 to 31 December 2018 0% Asia 19% ‐2% Europe ‐4% 34% ‐6% ‐8% ‐10% ‐12% US ‐14% 47% World Index FTSE 100 Hansa Trust Global Equities Performance
Slide 17: Portfolio Positioning & Characteristics
Portfolio Positioning & Characteristics 17
Slide 18: Current Positioning (as at December 2018)
HANSA TRUST Current Positioning (as at 31 December 2018) 25% 20.4% 20% 15% 14.2% 13.5% 12.7% 10% 6.5% 6.0% 5.6% 5% 4.1% 2.9% 3.0% 1.8% 1.9% 2.1% 1.3% 1.2% 0.9% 1.3% 0.5% 0% 18
Slide 19: Portfolio Characteristics (as at December 2018)
HANSA TRUST Portfolio Characteristics (as at 31 December 2018) Look‐through analysis of Hansa Trust portfolio, including holdings in Wilson Sons and Ocean Wilsons (Investments) Ltd* Geographic Exposure Sector Exposure 7.6% 3.0% 2.2% 1.3% 1.8% 1.3% 0.7% 5.2% 0.3% 7.8% 6.3% 25.3% 31.9% 6.4% 8.3% 13.6%
Slide 20: Other Portfolio Characteristics
HANSA TRUST Other Portfolio Characteristics (as at 31 December 2018) Annual 3rd Party Management Fees on Total Liquidity Underlying Holdings Between 1% and Between 1.5% Cash 1.5% and 2% 1% 3.8% 1.9% Fixed 37% 1 Week 41% No Fee Less than 1% 50.6% 43.8% > 6 months 3% 6 months 1 month 4% 3 months 3% 11
Slide 21: Dividend Profile
HANSA TRUST Dividend Profile Dividend Policy Since 2014 the Trust’s dividend policy has been 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. Dividend Payments and Annual
Slide 22: Discount to asset value
HANSA TRUST Discount Hansa Trust Ord and A combined (relative to AIC overall Hansa Trust Ord and A combined average discount) 0% 10% ‐5% 5% ‐10% 0% ‐15% ‐5% ‐20% ‐10% ‐25% ‐15% ‐20% ‐30% ‐25% ‐35% ‐30% ‐40% ‐35% ‐45% ‐40% ‐50% ‐45% Dec‐07 Dec‐08 Dec‐09 Dec‐10 Dec‐11 Dec‐12 Dec‐13 Dec‐14 Dec‐15 Dec‐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 Wilson Sons is among Brazil’s largest and oldest port, maritime and logistics services companies 25
Slide 26: Wilson Sons: significant economic value generated
HANSA TRUST Wilson Sons Despite the challenges faced in Brazil in recent years, Wilsons has generated significant economic value 26
Slide 27: Wilson Sons: structural growth potential
HANSA TRUST Wilson Sons Wilson Sons operates in a market with significant structural growth potential 27
Slide 28: Ocean Wilsons Investments (Limited) as at December 2017
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: Macro Overview: 2018 vs 2017 returns
Hansa Capital Partners Macro Overview 50% 40% 30% % Returns 20% 41% 17% 25% 27% 23% 10% 20% 22% 6% 13% 12% 15% 17% 17% 13% 6% 4% 4% 5% 10% 12% 13% 2% 10% 1% 3% 1% 4% ‐1% 5% ‐3% 0% ‐4% ‐3% ‐4% 0% 0% ‐1% ‐6% 3% 2% ‐4% ‐9% ‐11% 0% ‐9% ‐8% ‐10% ‐7% ‐9% ‐2% ‐14% ‐2% 0% ‐12% ‐9% ‐4% ‐10% ‐17% ‐19% ‐7% ‐17
Slide 31: Macro Overview: stylised stock market cycle
Hansa Capital Partners Macro Overview…..stylised stock market cycle Early Stage Bear Market Late Stage Bear Market Early Stage Bull Market Late Stage Bull Market – Economies enter recession – Revulsion – Economies exit recession – Rising volatility (interest rates start to bite) – Sentiment indicato
Slide 32: Macro Overview: economies
Hansa Capital Partners Macro Overview…….economies ‐ Capacity tightening within economies ‐ If there is an issue in China this would be a major issue for global ‐ growth (Country contributions to global GDP growth 2017‐19) ‐ Undeniably a long economic cycle 2018 has been characterised by economic dow
Slide 33: Macro Overview: economies cycle length
Hansa Capital Partners Macro Overview……economies Very long periods of economic expansion are not unprecedented + The composite ISM implies 3.8% growth in the US + + + At current GDP levels the likelihood of negative returns is low A muted recovery by historic standards 33
Slide 34: Macro Overview: rates
Hansa Capital Partners Macro Overview……..rates Value vs growth has continued its downtrend US bond yields recently broken the long‐term downtrend 150 year average 3.5 is 2.2% 3.0 2.5 2.0 1.5 1.0 0.5 0.0 ‐0.5 ‐1.0 US 10 yr minus 2 yr yield The US yield curve has been flattening albeit has recently st
Slide 35: Macro Overview: breakdown of 2018 returns
Hansa Capital Partners Macro Overview…….. Breakdown of 2018 returns between earnings, PE multiple and currency 1-yr chg in NTM EPS 1-yr chg in NTM P/E 1-yr FX contribution US$ Price return (%) 60 Strong earnings ... imply the weakness in prices led to significant derating 40 20 0 -20 -40 -60 AC APxJ
Slide 36: Macro Overview: excess & exuberance
Hansa Capital Partners Macro Overview…….excess & exuberance Bank leverage – uncharacteristically, banks outside 20,000 of Europe seem to be managing themselves 18,000 prudently late in the cycle 16,000 10 14,000 Price ($) 12,000 Median Leverage Ratio 9 10,000 8,000 8 6,000 7 4,000 2,000 6 ‐ Jan‐17 A
Slide 37: Macro Overview: summary, how could we be wrong?
Hansa Capital Partners Macro Overview…….summary ‘How could we be wrong?’ ….bear case: ….bull case: ‐Economic growth slows meaningfully ‐Economic growth slows from peaks reflecting peak PMIs, rates start to bite, but remains positive as guided by tight capacity and the impact of the lead indicators t
Hansa Investment Company — Investor Presentation (January 2019) on 6ix