Hansa Investment Company Ltd · LSE:HAN
Hansa Investment — Hansa Trust — Investor Presentation (May 2019)
57 slides from Hansa Investment's investor presentation, May 2019
Slide 1: Hansa Trust PLC May 2019
i HANSA TRUST PLC May 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
HANSA TRUST Hansa Trust Strategic Review 30 April 2019 Description Portfolio Hansa Trust Weight January 2014 Core Regional Core Regional exposure based on the output 34.4% of the Hansa House View. Description Portfolio Thematic Thematic Growth sectors such as 6.8% Weight biotechnology and techno
Slide 8: Performance Review
Performance Review 8
Slide 9: NAV, Share Price and KPI Performance
HANSA TRUST NAV, Share Price and KPI Performance Financial YTD Financial Year Financial Year 3 years to end April 5 years to end April 15 years to end April end April 2019 2018‐19 2017‐18 2019 (p.a.) 2019 (p.a.) 2019 (p.a.) NAV Performance TR 2.4% 5.6% 6.3% 11.0% 4.3% 9.8% NAV Performance ex. OWHL T
Slide 10: Peer Group Analysis (to 31st March 2019)
HANSA TRUST Peer Group Analysis (to 31st March 2019) % % Net % NAV % Price Price Size £m Discount Yield Performance Performance Now Mkt Cap Assets 3y 3y Total Return Total Return Global Global AIC Sector ATS Artemis Alpha Trust UK All Companies 283.00 -17.3 116 153 1.8 21 30 BTEM British Empire Glob
Slide 11: Performance of the different silos one year to April 2019
HANSA TRUST Performance of the different silos one year to 30 April 2019 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Core Regional Funds Thematic Global Equities Ocean Wilsons Holdings Diversifying Assets Cash/FX Exposure Ltd 11
Slide 12: Core Regional Funds and Thematic holdings
£‐ £5,000,000 £10,000,000 £15,000,000 £20,000,000 £25,000,000 Findlay Park American 3,531,986 Select Equity Offshore 2,654,278 Vulcan Value Equity 1,685,712 Pershing Square 1,363,593 Adelphi Eur Select Equity 763,740 BlackRock Eur Hedge 688,561 SISF Asian Total Return 315,397 Vanguard Dev Eur ex UK
Slide 13: Core Regional Funds and Thematic holdings by value
£‐ £100,000,000 £120,000,000 £20,000,000 £40,000,000 £60,000,000 £80,000,000 Findlay Park American 6,908,468 Select Equity Offshore 5,393,923 Vulcan Value Equity 4,768,404 SISF Asian Total Return 3,440,903 Goodhart: Hanjo 3,075,046 BlackRock Eur Hedge 1,686,933 Adelphi Eur Select Equity 1,327,654 In
Slide 14: Performance of less correlated funds June 2016 to April 2019
HANSA TRUST Performance of less correlated funds 1 June 2016 to 30 April 2019 A basket of lower‐correlated funds have been purchased since June/July 2016. The performance since has been positive and outperformed bonds and cash. 40.0% 30.0% Performance (GBP) 20.0% 10.8% 8.8% 10.0% 5.1% 2.4% 0.0% ‐10.
Slide 15: Transactions during 2019
HANSA TRUST Transactions during 2019 • Equity Purchases £4.5m: • Equity Sales £2.8m: – Dollar General £2.0m – Coca‐Cola Bottlers Japan Holdings Inc £1.5m (loss of £0.6m) – ITE Group PLC £1.6m – White Mountains Insurance Group Ltd £0.6m (profit of £28k) – CK Hutchison £0.6m – Hilton Food Group PLC £0
Slide 16: Global Equities – performance by size of holding
HANSA TRUST Global Equities – performance by size of holding 30 April 2019 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 4,019,472
Slide 17: Global Equities Silo as at April 2019
HANSA TRUST Global Equities Silo as at 30 April 2019 Geographic Exposure by Listing Performance 1 May 2018 to 30 April 2019 Asia , 15% 10% 8% Europe , 36% 6% 4% 2% 0% US, 49% ‐2% World Index FTSE 100 Hansa Trust Global Equities Performance
Slide 18: Portfolio Positioning & Characteristics
Portfolio Positioning & Characteristics 18
Slide 19: Current Positioning (as at April 2019)
HANSA TRUST Current Positioning (as at 30 April 2019) 25% 20% 19.1% 15.2% 14.8% 15% 12.2% 10% 6.1% 5.7% 5.7% 4.3% 5% 3.1% 2.8% 2.6% 1.8% 1.3% 1.2% 1.5% 1.8% 1.0% 0% ‐0.1% ‐5% 19
Slide 20: Portfolio Characteristics (as at April 2019)
HANSA TRUST Portfolio Characteristics (as at 30 April 2019) Look‐through analysis of Hansa Trust portfolio, including holdings in Wilson Sons and Ocean Wilsons (Investments) Ltd* Geographic Exposure Sector Exposure 1.8% 0.6% ‐0.1% 4.4% 2.7% 1.9% 0.2% 6.9% ‐0.1% 7.6% 5.6% 34.1% 7.9% 27.5% 8.5% 8.0% 9
Slide 21: Other Portfolio Characteristics
HANSA TRUST Other Portfolio Characteristics (as at 30 April 2019) Total Liquidity Annual 3rd Party Management Fees on Underlying Holdings Cash Between 1% and Between 1.5% 0% 1.5% and 2% 5.1% 1.9% Fixed 35% 1 Week 42% No Fee 47.7% Less than 1% 45.3% > 6 months 3% 6 months 6% 1 month 3 months 3% 11% T
Slide 22: 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 23: Discount to NAV
HANSA TRUST Discount Hansa Trust Ord and A combined (relative to AIC overall Hansa Trust Ord and A combined average discount) 0% ‐5% 10% ‐10% 5% 0% ‐15% ‐5% ‐20% ‐10% ‐25% ‐15% ‐30% ‐20% ‐35% ‐25% ‐30% ‐40% ‐35% ‐45% ‐40% ‐50% ‐45% Apr‐09 Oct‐09 Apr‐10 Oct‐10 Apr‐11 Oct‐11 Apr‐12 Oct‐12 Apr‐13 Oct‐1
Slide 24: Ocean Wilsons Holdings
Ocean Wilsons Holdings 24
Slide 25: 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 25
Slide 26: Wilson Sons
HANSA TRUST Wilson Sons Wilson Sons is among Brazil’s largest and oldest port, maritime and logistics services companies 26
Slide 27: Wilson Sons
HANSA TRUST Wilson Sons Despite the challenges faced in Brazil in recent years, Wilsons has generated significant economic value 27
Slide 28: Wilson Sons
HANSA TRUST Wilson Sons Wilson Sons operates in a market with significant structural growth potential 28
Slide 29: Ocean Wilsons Investments (Limited) as at December 2018
HANSA TRUST Ocean Wilsons Investments (Limited) as at 31 December 2018 35% 31.8% 30% 25% 20% 15% 13.6% 10% 9.0% 6.9% 6.2% 5.5% 5.8% 5% 2.6% 3.2% 2.4% 2.4% 2.9% 1.8% 2.1% 1.7% 0.9% 0.9% 0.4% 0% Ocean Wilsons Investments (Limited) is an investment portfolio focused on achieving long‐term returns while
Slide 30: Market Outlook
Market Outlook 30
Slide 31: 2018….the beginning of the end?
HANSA TRUST 2018….the beginning of the end? 2018 saw downgrades across the board with the US the Slowing China real and nominal GDP notable exception …..2018 characterised by slowing growth, both globally and China in particular 31
Slide 32: 2018….the beginning of the end?
HANSA TRUST 2018….the beginning of the end? 4.0% US average hourly earnings yearly change 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 A growing fear that US rates were behind behind the curve Combined with road‐marks being hit by key indic
Slide 33: 2018….the beginning of the end?
HANSA TRUST 2018….the beginning of the end? 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 Brazil EM Dev Europe Japan France Spain Indonesia Mexico Korea S.
Slide 34: 2019….markets have rallied sharply
HANSA TRUST 2019….markets have rallied sharply Deutsche Bank GDP survey points to lower growth in 2019 Chinese data has shown signs of stabilisation, suggesting but not recession that stimulus measures are starting to work ……economic growth slower in 2019 versus 2018 but signs of stabilisation and n
Slide 35: 2019….markets have rallied sharply
HANSA TRUST 2019….markets have rallied sharply US fed announced a U‐turn on interest rate policy in The ECB has pushed back it exits process from QE in light January of weaker growth …….Jay Powell rowed back from earlier comments on rates and put them on hold. Some market participants are now callin
Slide 36: 2019….markets have rallied sharply
HANSA TRUST 2019….markets have rallied sharply Fund flows out of equities has been high Hedge fund positioning appears conservative …….the strength of the market rebound probably reflects the excessively defensive positioning by many investors as we came into the New Year 36
Slide 37: Key risks…..a conventional rate induced slowdown
HANSA TRUST Key risks…..a conventional rate induced slowdown Interest rate induced recessions are the most common ……our core view is that we experience a normal rate induced recession and bear market as monetary policy is tightened to kill‐off excesses in the economy 37
Slide 38: Key risks…..China
HANSA TRUST Key risks…..China China’s investment share of GDP is already very high – typically Private sector debt levels comparable to other countries prior their growth show sharply post peak crises …..China has been a huge success story in recent years (at least from an economic perspective). How
Slide 39: Key risks……Europe
HANSA TRUST Key risks……Europe Quote from the FT Germany, the powerhouse of Europe, looks increasingly vulnerable to China moving up the IP spectrum European banks have failed to resolve their GFC issues and are key to the success of Europe ……Europe is mired in its structural challenges 39
Slide 40: Summary
HANSA TRUST Summary • Markets started to ask some serious questions on the longevity of the current cycle in 2018. In particular they focused on: • Economic growth slowing outside of the US • Monetary policy shifting from tightening due to high growth to tightening to kill‐off excesses in the econom
Slide 41: Appendix
Appendix 41
Slide 42: Performance of the different silos three years to April 2019
HANSA TRUST Performance of the different silos three years to 30 April 2019 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Core Regional Funds Thematic Global Equities Ocean Wilsons Holdings Diversifying Assets Cash/FX Exposure Ltd 42
Slide 43: Investment process…..Overview
Hansa Capital Partners Investment process…..Overview Dynamic Asset We believe in dynamically moving between asset classes to reflect both valuations and the Allocation position within the business cycle. We are truly global in our outlook We do not view volatility as being an important risk. Rat
Slide 44: Investment process….. Dynamic Asset Allocation
Hansa Capital Partners Investment process….. Dynamic Asset Allocation Global Equities Multi Asset Portfolio Here the Business Cycle becomes the key driver Valuation extremes are key drivers: • We seek to increase/decrease defensive holdings in these periods Time 44
Slide 45: Investment process….. Dynamic Asset Allocation
Hansa Capital Partners Investment process….. Dynamic Asset Allocation 100% 90% 80% Long‐only 70% Private Equity Private Debt 60% Real Assets 50% Emerging Market Debt 40% High Yield Debt 30% Hedge Funds Market Neutral Funds 20% Cash 10% 0% 2009 2010 2011 2012 2013 2014 A client’s Strategic Asset Al
Slide 46: Investment process….. Risk
Hansa Capital Partners Investment process….. Risk ‐48% ‐46% The fund management industry defines Much more important are drawdowns which volatility as risk – it’s convenient but not exceed a client’s tolerance ultimately relevant to long–term investors such as Hansa 46
Slide 47: Investment process…Risk
Hansa Capital Partners Investment process…Risk • Drawdowns represent the peak to trough performance of different asset classes at points of market distress. Typically the riskier the asset class the greater the potential drawdown. Drawdowns are problematic when they exceed an investor’s tolerance le
Slide 48: Investment process…..Risk
Hansa Capital Partners Investment process…..Risk We protect ourselves against permanent impairments in capital in four ways: Valuation based investment approach and dynamically managing portfolios through business cycles Investing in high quality managers through a rigorous due diligence proce
Slide 49: Investment process….. Portfolio Blending
Hansa Capital Partners Investment process….. Portfolio Blending Long‐Only Long‐Short Strategic Core Our natural hunting A combination of all‐weather Regional Silo ground – as endowment managers or protection in type investors we want more mature business cycles to capture the natural Fee consc
Slide 50: Investment process…..Well connected
Hansa Capital Partners Investment process…..Well connected We have seeded some exceptional managers The combination of an extraordinarily well connected network and an experienced team enables us to invest in exceptional managers These managers are not normally available to the man on the stre
Slide 51: Investment process…..Global equity selection
Hansa Capital Partners Investment process…..Global equity selection Our global equity portfolio is composed of 20 – 45 names, is diversified, has a high active share and is built from the bottom up 51
Slide 52: Investment process…..Summary
Hansa Capital Partners Investment process…..Summary Proprietor DNA A proprietor driven approach is central to how we manage money….patient, unconstrained and dynamic A dynamic approach We believe a static approach to managing money fails to reflect how cycles evolve and valuations change Well co
Slide 53: The Team
Hansa Capital Partners The Team William Salomon *(years in industry/ years at Hansa) Managing Partner (30yrs/17yrs) Alec Letchfield Chief Investment Officer, Partner (25yrs/5yrs) Christopher Townsend Private Equity (19yrs/8yrs) William Lewis George Clifton‐Brown Jon‐Kit Chan Rob Royle Research Analy
Slide 54: Team Biographies
Hansa Capital Partners Team Biographies William Salomon Managing Partner William Salomon has extensive knowledge of all aspects of private client and strategic fund investment business. He was responsible for developing Finsbury Asset Management and the Finsbury range of funds based on the concept o
Slide 55: Team Biographies
Hansa Capital Partners Team Biographies Christopher Townsend Private Equity Christopher is a qualified solicitor. He has an MA from Peterhouse, Cambridge and was awarded an MBA from London Business School. He is currently investment director at Hansa Capital GmbH and a non‐ executive Director of Oce
Slide 56: Team Biographies
Hansa Capital Partners Team Biographies William Lewis Research Analyst Will joined Hansa Capital Partners LLP in 2012, after four years on the investment team at what was then Lord North Street, now Sandaire Investment Office, a London‐based private investment office. He graduated from the Universit
Slide 57: 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