TwentyFour Asset Management. Performance creates trust. Vontobel s acquisition of a majority stake in. 25 March 2015

Transcription

1 TwentyFour Asset Management Vontobel s acquisition of a majority stake in TwentyFour Asset Management Performance creates trust 25 March 2015

2 Page 2 Cautionary statement regarding forward-looking statements This document may contain projections or other forward-looking statements related to Vontobel that are subject to known and unknown risks, uncertainties and other important factors. These projections and forward-looking statements reflect management s current views and estimates. They involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the projections and forward-looking statements. Potential risks and uncertainties include in particular factors such as general economic conditions, foreign exchange, share price and interest rate fluctuations as well as legal and regulatory developments.

3 Page 3 Global demand for fixed income specialties expected to grow substantially by 2017; UK is the largest AM market in Europe Fixed income is the largest asset class; specialties have significant growth potential Global actively managed assets UK is the largest AM market in Europe UK had asset under management of CHF 5,400 bn by end-2012, thereof 37% in fixed income 1 UK has a leading position with 35% market share in the European asset management industry This large market share is driven by the UK s established reputation as a leading global financial centre as well as by local wealth in the UK Source: BCG Global Asset Management Includes credit, emerging market and global debt, high-yield bonds, and convertibles Source: efama Asset Management in Europe (June 2014)

4 Page 4 UK is one of Vontobel s focus markets and already accounts for CHF 4.5 bn of advised client assets Vontobel assets from UK clients (CHF bn) Comments Vontobel Asset Management entered UK market in late 2010 Assets grew by +41% in UK last year % UK-domiciled clients, advised client assets

5 Page 5 Vontobel Asset Management s Fixed Income boutique displays impressive growth and performance quality Asset Management s Fixed Income assets (CHF bn) Selected product growth (CHF mn) Comments % 2,500 2,000 Significant growth in 2014 driven by outstanding investment performance and strong client demand Examples: 1,500 1,000 Corporate Mid Yield over 1, 3 and 5 years: 6th / 9th / 3rd percentile in Morningstar peer group 500 EM Bonds: 1st quartile (8th percentile) in Morningstar peer group Nov 11 Feb 12 Mai 12 Aug 12 Nov 12 Feb 13 Mai 13 Aug 13 Nov 13 Feb 14 Mai 14 Aug 14 Nov 14 Fixed Income, advised client assets Vontobel Fund - EUR Corporate Bond Mid Yield Vontobel Fund - High Yield Bond Vontobel Fund - Emerging Markets Debt

6 Page 6 TwentyFour represents an excellent strategic fit TwentyFour manages CHF 6.5 bn of assets London-based fixed income boutique focusing on ABS 1 and unconstrained fixed income strategies Established in 2008, achieved impressive growth to CHF 6.5 bn of assets Proven ability to introduce new products Advised client assets (CHF bn) has an excellent investment performance Dynamic Bond Fund is largest fund with over CHF 1 bn 2 and a 5-star rating from Morningstar: TwentyFour Dynamic Bond UT Sterling Strategic Bond Numerous awards demonstrate outstanding performance quality and attracts top talents Performance driven by 10 partners and 31 employees Able to attract highly respected fixed income PMs Often quoted in opinion forming industry press: Financial Times Adviser 3 Bloomberg 4 Citywire 5 ABS Unconstrained Total 1 ABS: Asset backed securities 2 As of ; exchange rate of GBP/CHF

7 Page 7 Adding TwentyFour to Vontobel Asset Management will deliver significant growth in the UK and internationally Stronger position in UK (CHF bn) Growth drivers % Further growth of TwentyFour in UK: Unconstrained Fixed Income, Income/Absolute Return Solutions and ABS Vontobel 1 TwentyFour Combined Distribution of TwentyFour products through Vontobel Asset Management s global distribution network UK-domiciled clients, advised client assets (CHF bn) Broader base in Fixed Income (CHF bn) Vontobel Asset Management will further improve its access to wholesale and institutional investors and financial advisors in the UK % Vontobel 1 TwentyFour Combined Fixed Income, advised client assets 1 As of

8 Page 8 Vontobel to acquire 60 percent stake in TwentyFour transaction is fully in line with Vontobel s acquisition strategy Transaction structure Criteria for acquisitions are fully met Transaction expected to close in second quarter of 2015 (pending regulatory approval) TwentyFour s Partners retain 40% stake, which ensures full commitment and alignment of interests To further strengthen alignment, the Partners have agreed to reinvest a significant share of their consideration into existing TwentyFour and/or Vontobel investment funds Increase diversification across boutiques Complement scale and skills of existing boutiques Leverage AM s global distribution network and increase volume of AuM in home and focus markets Volume of AuM Markets Initial 60% Remaining 40% Acquired in 2015 Will be acquired by Vontobel over longer term TwentyFour s Partners will continue to manage TwentyFour s day-to-day operations, retaining full authority over fund investment decisions CHF 5-25 bn Boutiques Multi-Asset-Class and Fixed Income Switzerland, Germany, UK and US Client segments Focus on institutional clients

9 Page 9 Transaction is accretive to Vontobel shareholders from day one and provides considerable strategic potential Acquisition is based on strong economic rationale TwentyFour has a gross margin of 40 bps and is expected to grow by an estimated 20% per annum Acquisition will have a positive impact on the cost/income ratio of both Asset Management and Vontobel TwentyFour s P&L will be recognised in Vontobel s P&L from closing (second quarter of 2015, pending regulatory approval). The contribution to pre-tax profit expected to exceed CHF 10 mn 1 in 2016 No material integration costs Purchase consideration is based on a fair market multiple for a strongly growing company and TwentyFour s run-rate. Both parties have agreed not to disclose the purchase consideration IFRS requires Vontobel to hold capital reserves equivalent to 100% of shares in 2015 No additional Tier 1 or Tier 2 capital will be issued in connection with the transaction. Vontobel s equity position remains strong and continues to significantly exceed its target total capital ratio of 16%; ability to finance further acquisitions remains fully intact 1 On a 100% basis; before amortization of intangibles

10 The Vontobel Group Page 10