Prescient Limited
JSE and ABSA Private Bank Showcase Presentation22 July 2015
Presented by: Herman Steyn (CEO)
July 2015
2
CONTENTS
� Business environment
� About Prescient
� Operational overview
� The year ahead
� Questions
� Appendices
3
Business Environment
4
BUSINESS ENVIRONMENT
Hidden opportunities in the challenges
� Worsening employment situation
� Poor service delivery
� Education crisis
� Weakening credit rating
� Increased regulatory burden
� Regulatory changes
– Retail distribution review
– Retirement reform
� BEE
� Cyber security
� World grappling with QE
� Increased tension around ISIS
5
About Prescient
6
WHO IS PRESCIENT� Well-established, entrepreneurial
– 1998– Founders still involved in the business– Staff are significant shareholders – Alignment of interests
� Diversified Financial Services and Information Mana gement Company
– Operate globally (SA, Africa, China, Australia, Ireland, Middle East, Jersey, London)
– Asset management (Retail and Institutional)– Information management services– Fund services and White labelling – Stock broking – Wealth management
� Innovative Offerings - Only Operate in areas where w e know we can add value to clients
– Differentiated approach - Asset management (philosophy)– Differentiated products - Energy Fund, Hedge fund administration, Information
management services, – Growth markets – Africa and China
7
GROUP ORGANOGRAMF
INA
NC
IAL
SE
RV
ICE
S
Prescient Investment Management
EMHPrescient Investment Management
Prescient Securities
Prescient Wealth Management
Prescient Fund Services
Prescient Management Company
Prescient Life
Prescient Property Investment Management
Stadia Capital
Greenfields Institute of Business
INF
OR
MA
TIO
N M
AN
AG
EM
EN
T S
ER
VIC
ES
Stricklands Tetra Cape
PBT Infosight
PBT Technology Services (Cape Town)
PBT Technology Services
Bi-Blue Consulting
PBT Australia
Prescient Fund Services (Ireland)
Technique Business Intelligence Software (TBIS)
Cyberpro Consulting
8
Operational Overview
9
HIGHLIGHTS AS A 31 MARCH
� Current AUM in investment management – R65.5 billion (FY14: R59.1 billion)
� Current third party AUA in Fund Services business• South Africa – R48.6 billion
(FY14: R31.1 billion)• Ireland – €1.1 billion
(FY14: €1.2 billion)
� Revenue increased to R835.8 million (+26%)
� Headline earnings per share of 7.54 cents (+15.4%)
� Total dividend declared for the year of 5.75 cents per share (+12.7%), interim dividend of 3.0 cents per share
� Prescient Holdings and subsidiaries – Level II contributor in terms of the DTI code
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� 16 Year track record
� Markets include South Africa, Africa, China,
Global Markets
� Investment philosophy - a differentiating
factor
� Assets under management of R65.5 billion
(FY14: R59.1 billion).
� Geographical split of AUM
� Average fee rate has increased from 0.23%
to 0.27%
Assets under management
PRESCIENT INVESTMENT MANAGEMENT
60 59
66
54
56
58
60
62
64
66
2013 2014 2015
Ra
nd
Bil
lio
ns
AUM
Millions
Africa 61.6
China 1 557.6
Developed Markets 4 430.8
Namibia 470.0
South Africa 58 991.2
Total AUM 65 511.2
11
� Challenges
– Retail market penetration – Dispel the myth of active management vs. Prescient Investment Management
� Opportunities and Strategies for Growth
– Improved performance – underpin for earnings and distribution– First to market in China - significant earnings contributor in FY15, performance is actively
being monitored(Chinese markets)– Renewable Energy Fund – Africa Fund – Market catalysts : Retirement Reform and RDR – Improve distribution across institutional and retail markets (staffing)
PRESCIENT INVESTMENT MANAGEMENT
Assets under management – mandate ranking
AUM’ billions %
Cash 18.50 28.2%
Income 9.06 13.8%
Bonds 16.27 24.8%
Equity 1.17 1.8%
Balanced 0.95 1.4%
Positive Return 13.64 20.8%
TAA 1.76 2.7%
Global 4.03 6.1%
Property 0.13 0.2%
Total 65.51 100%
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CORE SOLUTION RANGE
IncomeProvider
Positive Return
Absolute Balanced
Equity
Targets a high income yield with stable capital values.
Targets sustainable real returns over time, while
actively managing downside risk (in foreign
currency for feeder funds).
Targets real returns through income and
capital gains with capital losses
possible over the shorter term.
Targets returns above general equity markets by investing in shares that offer value relative
to its price
Yield QuantPlus®
Yield QuantPlus®
Global Positive Return Feeder
Global Positive Return Feeder
China Balanced
Feeder
China Balanced
Feeder
Global Growth Feeder
Equity QuantEquity Quant
Africa EquityAfrica Equity
Equity IncomeEquity Income
Balanced
Targets real returns similar to the average balanced fund with no
explicit risk target.
GlobalBalancedStrategy Feeder
GlobalBalancedStrategy Feeder
Money MarketMoney Market
Bond QuantPlus®
Bond QuantPlus®
Global IncomeFeeder
Global IncomeFeeder
Equity Defender
Fund
Equity Defender
Fund
China Conservative
Feeder
China Conservative
Feeder
Expected Capital Volatility
Exp
ecte
d R
eal R
etu
rns
CORE SATELLITESATELLITEGLOBAL FEEDER FUNDS
GLOBAL FEEDER FUNDS
Global Income Fund ($)
Global Income Fund ($)
Global Positive
Return (Euro) Fund ($,€)
Global Positive
Return (Euro) Fund ($,€)
China Conservative
Fund ($, ¥)
China Conservative
Fund ($, ¥)China
Balanced Fund ($,¥)
China Balanced Fund ($,¥)
Global Growth Fund ($)
Global Growth Fund ($)
GLOBAL FUNDS
GLOBAL FUNDS
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PERFORMANCE
Period Performance as at 31 March 2015
3 Months 12 Months Benchmark
Fund BM Alpha Fund BM Alpha
Balanced Funds
Global Absolute Balanced 6.60% 2.00% 4.60% 16.70% 8.40% 8.30% CPI + 5%
Income Funds
Income Provider 2.60% 1.40% 1.20% 10.30% 5.90% 4.40% STeFI Call 110%
Equity Funds
Equity Fund (Was EAQ) 9.00% 6.90% 2.10% 19.80% 17.70% 2.10% SWIX
Equity Income 7.20% 2.70% 4.50% 20.90% 11.70% 9.20% FTSE/JSE Divi +
Positive Return Funds
Positive Return 2.90% 1.80% 1.10% 8.00% 7.40% 0.60% CPI + 4%
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PRESCIENT OFFSHORE RANGEE
xpec
ted
Rea
l Ret
urns
Expected Capital Volatility
Fund Type UCITS Registered Office 33 Sir John Rogerson’s QuayPricing Daily Dublin 2, IrelandInvestment Manager Prescient Investment Management Client Services 49 Upper Mount StreetCustodian BNY Mellon Trust Company Dublin 2, Ireland Administrator Stadia Fund Management Ltd Tel : 00 353 1 676 6959Auditors KPMG email : [email protected]
Asset Class
Benchmark
GlobalIncome
Interest Bearing
90 day US TB
ChinaConser-vative
China CPI + 2%
Africa Equity
Nedbank 100 ex-SA
ChinaBalanced
China CPI + 3%
Global Positive Return (Euro)
Multi Asset
EU Harmonised CPI + 1%
Global Growth
Equity
MSCI World Index
15
PERFORMANCE – OFFSHORE FUNDS
Period Performance as at 31 March 2015
3 Months 12 Months Benchmark
Fund BM Alpha Fund BM Alpha
International Funds
Global Income US$ 0.00% 0.00% 0.00% 1.50% 0.00% 1.50% USTB
Global PR (Euro) 4.10% 0.50% 3.60% 8.10% 0.60% 7.50% EURO Inflation
Global Growth US$ 0.30% 2.50% -2.10% -0.70% 5.20% -5.90% MSCI/Inflation
Africa Funds
Africa (Rand) -2.10% -1.30% -0.80% 7.20% 10.40% -3.20% MSCI Africa/Nedbank 100
Chinese Funds
China Balanced 27.00% -1.10% 28.10% 95.40% 2.70% 92.70% Chinese Inflation +3%
China Conservative 0.90% 0.20% 0.80% US Libor
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PRESCIENT FUND SERVICES (SA & IRELAND)
� Specialist outsourced administration and platform services to fund management market
� Significant growth in 3rd party AUA:– South Africa – R48.6 billion (FY14: R31.1 billion)– Ireland - €1.1 billion (FY14: €1.2 billion)Total local AUA - R138.6 billion
� Challenges and Opportunities– Investment in systems– Changing technology– Expand on offering – Hedge fund administration capability
(significant growth area)SA Hedge Fund Survey June 2014 (source: Novare)
� Hedge Fund assets surpass R50 billion, an increase of more than R10 billion from the previous year.
� Inflows into the hedge fund industry for the 12 months ending June 2014 exceeded R9.5 billion of which R654 million was allocated to new funds launched during 2014.
� 8 new funds were launched for the year ending June 2014
– Well positioned for growth in changing regulatory environment (outsourced models likely to gain momentum)
– Significant pipeline of clients – local and Ireland
South African assets under administration
9
13
194
5
8
3
13
22
-
10.00
20.00
30.00
40.00
50.00
60.00
2013 2014 2015
Ra
nd
Bil
lio
ns
Third party segregated
White label life portfolios
White label unit trusts
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PRESCIENT LIFE LIMITED
� Institutional : Offers a range of life-pooled portfolios managed by internal and third party managers with full administration services (AUM: R9.40 billion)
� Retail : Offers retirement annuities, preservation funds, umbrella funds, living annuities, endowment policies and tax-free savings accounts (AUM: R420 million)
� Net Flows: R2.27 billion
� Asset managers
– Third Party (AUM: R6.89 billion)
– Prescient Investment Management (AUM: R2.93 billion)
� Competitive advantages :
– Systems and reporting, strong regulatory knowledge and insights
� Focus
– “Seamless Transition” into annuity products in retirement
– Catalyst for growth: regulatory requirements
– Retail distribution0.00
2.00
4.00
6.00
8.00
10.00
12.00
2010 2011 2012 2013 2014 2015
Pol
icyh
olde
r Ass
ets
(Ran
d B
illio
n)
Policyholder AssetsPolicyholder Assets
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PRESCIENT SECURITIES
� Focus on institutional market
� Research and trade offering covers equity, derivatives and fixed income
� Differentiated by covering niche sectors/areas
� Consistent performance in FM rankings and Spire awards (refer to Appendix)
� Challenges and opportunities: Respond to downward pressure on brokerage rates by
strengthening research/trade offering across asset classes (a number of appointments
made recently)
� An independent private client wealth and portfolio management business
� Market responding well to Multi - asset portfolio offering
� Advisory business gaining momentum
� Challenges and opportunities: Strengthening team and developing distribution
channels and partnerships
PRESCIENT WEALTH MANAGEMENT
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INFORMATION MANAGEMENT SERVICES
� The PBT Group is a consulting company, specialising in data management, to SA,
MEA and Australian clients
� These professional services are conducted in, amongst others, the Financial
Services, Retail and Mobile Telecommunication sectors
� Successful track record in Africa and Middle East, operating since 2003
� Well established in Australia, operating since 2005
� Challenges and Opportunities
– Sizable debtors book but well managed
– Remunerated in foreign currency but salaries in ZAR
– Continued growing contribution to Prescient Group revenue and earnings
– 50% of earnings generated offshore to diversify earnings base
– Continued service delivery to clients in buoyant trading environment
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The Year Ahead
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THE YEAR AHEAD
� Focus on investment performance
� Positioned for growth
– Strong balance sheet
– Technology platform
– Appropriate solutions
� Maintain competitive positioning
� Specific focus areas:
– Retail
– Multi asset class performance
– Prescient Wealth
– Renewable energy
– Africa
� Maintain our entrepreneurial culture
� Diversification within companies
22
THE YEAR AHEAD
� Challenges
– Regulatory burden
– Pressure to reduce costs of investment management services
– Dollar denominated costs for systems
– Conversion time for Prescient Wealth
– Pressure on revenue for Prescient Securities
– Funding growth?
� Earnings growth drivers
– Improved performance
– Growth of AUM / AUA
– Improved margins due to increase in retail flows
– High demand for information management services
– Growth of Prescient Fund Services (Ireland)
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Q&A
Regulatory Information
This presentation contains certain forward-looking statements. These forward-looking statements are based on current information and expectations, and
involve a number or risks and uncertainties. Although Prescient believes that the expectations reflected in such forward-looking statements are reasonable, noassurance can be given that such expectations will prove to have been correct. Actual results may differ materially from those projected in such statements dueto various factors, including but not limited to changes in economic and market conditions, changes in regulatory environment, fluctuations in security prices and
exchange rates, and business and operational risk management. Prescient is under no obligation to update these statements once it has been posted orreleased.
The information contained herein is provided for general information purposes only. This information does not constitute a solicitation, recommendation,guidance or proposal, and the service provided is not intended nor does it constitute financial, tax, legal, investment or other advice.
Whilst reasonable steps are taken to ensure the accuracy and integrity of information contained herein, Prescient accepts no liability or responsibilitywhatsoever if any information is, for whatever reason, incorrect. Prescient further accepts no responsibility for any loss or damage that may arise from relianceon information contained herein.
Unit trusts should be considered a medium- to long-term investment. The value of units may go down as well as up, and is therefore not guaranteed. Pastperformance is not necessarily an indication of future performance. Note that individual investor performance may differ as a result of the actual investment
date, the date of reinvestment of distributions and dividend withholding tax, where applicable. Where foreign securities are included in a fund it may be exposedto macroeconomic, settlement, political, tax, reporting or illiquidity risk factors that may be different to similar investments in the South African markets.Fluctuations or movements in exchange rates may cause the value of underlying investments to go up or down. Prescient Management Company (RF) (Pty)
Ltd is a Collective Investment Schemes Manager approved by the Financial Services Board in terms of the Collective Investment Schemes Control Act. UnitTrusts are traded at ruling prices set on every trading day. Unit trusts are allowed to engage in script lending and borrowing. Prescient is a full member of theAssociation for Savings & Investment SA (ASISA).
Business address:Prescient House, Westlake Business Park, Otto Close, Westlake, Cape Town, 7945Tel: 021 700 3600Fax: 021 700 3700
Thank You
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Appendices
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INDUSTRY RECOGNITION
� 2015 BATSETA Imbasa Yegolide Awards − Bond Manager of the Year− Responsible Investment Consultant / Service Provider of the Year− Nominated in Absolute Return Manager of the Year category− Nominated in Responsible Investment Manager of the Year category
� 2015 Raging Bull Awards– 27Four stable Prescient Fund of Funds– Best SA Multi-Asset Low Equity Fund– 27Four Balanced Prescient Fund of Funds– Best SA Multi-Asset Medium Equity Fund
� 2014 Morningstar– Nominated in Diversified Bond category– Nominated in Global Bond category
� Prescient Fund Services uses Eagle Investment Systems as its primary administration system. The business unit received an award from Eagle for innovative use of its software.
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INDUSTRY RECOGNITION
� The 2015 Financial Mail “Rating the Analysts (equit ies and derivatives) Awards”:– #1 – Innovative Research
– #1 – Electronic & Electrical Equipment
– #2 – Derivatives Research
– #2 – Derivatives Dealing
– #3 – Financial and Industrial Small & Medium Market Cap Companies
– #3 – Hotels, Travel & Leisure
– #3 – Risk Management
– #4 – Resources Small & Medium Market Cap Companies
– #6 – Computer Services
� The 2014 Spire Awards:– #1 – Best Agency Broker House (Roll-up award)
– #1 – Best Agency Broker – Bonds
– #1 – Best Agency Broker – Listed Interest Rare Derivatives
– #2 – Best Agency Broker – Listed FX Derivatives
– #2 – Best Research Team – Quantitative Research
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INDUSTRY RECOGNITION
� In 2014, EMHPrescient Investment Management was awarded Best Investment Management Company in Namibia as announced by leading financial magazine, World Finance.
� Prescient Wealth Management was shortlisted in the Africa Investor Advisor of the Year category for the Africa investor (Ai) Infrastructure Investment Awards 2015.
� In 2014, Prescient was recognised as being one of the top 100 most Gender Empowered Companies in South Africa. Top Women in Business and Government Media research revealed Prescient as an organisation encompassing gender empowerment at the very core of our business practices.
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REVENUE
281 277 274 287 354
204
378
482
-
100
200
300
400
500
600
700
800
900
2011 2012 2013 2014 2015
Ran
d M
illio
ns
Information Management Services
Financial Services
30
PROFIT BEFORE TAX
133
118 113 108
130
25 44
56
-
20
40
60
80
100
120
140
160
180
200
2011 2012 2013 2014 2,015
Ra
nd
Mil
lio
ns
Information Management Services
Financial Services
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ANALYSIS OF SHAREHOLDERS
As at 31 March 2015
17%
7%
52%
2%
21%
2%
External BEE shareholding
BEE staff and management
Other staff and management
Non-executive directors and other relatedparties
Other
Treasury shares
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