2 Operational highlights Strong performance from new and existing - PowerPoint PPT Presentation

Full year results presentation 25 May 2017

2 Operational highlights Strong performance from new and existing strategies  Total AUM up 10% to € 23.8bn, with € 4.0bn of new money raised; third party fee earning AUM up 19% to € 18.7bn  Fundraising performance driven by our newer, diversifying strategies: Strategic Secondaries and Australian Senior Loans; our CLO programme; and a secondary transaction on Recovery Fund 2008  Fundraising pipeline healthy with a number of our larger strategies expected to be raising successor funds in the new financial year  Fund investment is on track whilst maintaining investment discipline in a competitive market  Fund returns benefitting from strong capital gains and robust portfolio performance

3 Financial highlights Financial performance driven by strong capital gains  Fund Management Company profits up 21% to £74.0m (2016: £61.2m), with third party fee income 1 up 27%  Investment Company profits 1 higher at £163.5m (2016: £114.4m)  Group profit before tax 1 was £237.5m (2016: £175.6m)  Earnings per share 1 of 69.3p (2016: 48.1p); Fund Management Company 21.6p (2016: 16.8p) and Investment Company 47.7p (2016: 31.3p) ¹These are non IFRS GAAP alternative performance measures and represent internally reported numbers excluding the impact of fair value movements on derivatives (FY17: £1.3m; FY16: £17.3m). Internally reported numbers exclude the impact of the consolidation of 12 credit funds following the adoption of IFRS 10

4 Dividends and dividend policy Dividend rebased and commitment to progressive policy  Closer alignment of dividend to the growth of the Fund Management Company  Board intends to recommend an annual dividend which represents a pay-out of 80- 100% of that year’s post-tax profits of the FMC  We will use IC post-tax profits, until FMC profits are sufficient to allow us to maintain a progressive dividend  Currently anticipate recommending growing the dividend per share by 6-8% per annum  Final ordinary dividend up 23% to 19.5 pence per share  Total ordinary dividends in the year up 17% to 27.0 pence per share

5 Strategic priorities FY10 - FY15 FY16 - FY19 By FY20 Building the platform Profit maturity  Manage pre global financial crisis  Deliver gross fundraising target  Recognised as a diversified portfolio specialist asset manager  Enhance brand and client base  Develop a scalable infrastructure  Increased fundraising targets  Selective acquisitions and team platform  Continue to invest in growth hires to expand product range  Establish an in-house distribution whilst maintaining FMC  FMC operating margin to capability margins increase  Develop new products  FMC largest profit contributor  Optimise co-investment ratio  Build a global franchise  Enhanced brand recognition  Greater capital efficiency  Maintain efficient capital base

6 Financial Review

7 Financial highlights Fund Management profits up 21% in the year 12 months to 12 months to £m 31 March 2017 31 March 2016 Fund Third party fee income 138.6 108.9 Management IC management fee 18.1 18.4 Company Other income 23.0 18.9 Operating costs (105.7) (85.0) FMC profit 74.0 61.2 Investment Interest income 144.7 126.0 Company Dividend & other income 14.7 21.4 Net capital gains 201.4 128.6 Total income 360.8 276.0 Interest expense (53.9) (45.9) Operating costs (77.3) (57.9) IC management fee (18.1) (18.4) Impairments (48.0) (39.4) IC profit 163.5 114.4 Group Profit before tax 1 237.5 175.6  Accounting standard IFRS 10 requires twelve credit funds to be consolidated into statutory results. All numbers in the financial review shown excluding the impact of IFRS 10  Assets and liabilities grossed up with minimal impact on shareholders’ funds ¹These are non IFRS GAAP alternative performance measures and represent internally reported numbers excluding the impact of fair value movements on derivatives (FY17: £1.3m; FY16: £17.3m). Internally reported numbers exclude the impact of the consolidation of 12 credit funds following the adoption of IFRS 10

8 Balance sheet and capital strategy Balance sheet efficiency achieved 31 March 2017 31 March 2016 £m Assets Loans and investments 1,712 1,798 Assets for syndication 90 183 Cash 490 113 Other 209 236 Total assets 2,501 2,330 Liabilities Borrowings 1,119 866 Other 209 223 Shareholders funds 1,173 1,241 Total liabilities 2,501 2,330 Balance Gearing ratio 0.95x 0.70x sheet metrics Debt facilities 1,600 1,535 Available headroom 971 781  Maintain balance sheet gearing well within the range of 0.8-1.2x  Diversified sources and maturities of financing, healthy debt headroom  Weighted average life of total debt 3.8 years with a weighted average costs of 3.9%

9 Cash flow Operating cash inflows higher due to realisations 12 months to 12 months to £m 31 March 2017 31 March 2016 Cash in from realisations and recoveries 716.5 394.3 Cash paid to purchase loans and investments (366.0) (247.1) Cash movement in assets held for syndication to funds 153.7 (35.8) Cash in from fees 148.9 86.3 Cash in from dividends and interest 172.2 170.0 Cash interest paid (53.0) (47.0) Operating expenses paid (115.0) (135.1) Total operating and investing cash flows 657.3 185.6

10 Fund Management Company

11 Third party assets under management Fundraising of € 4bn increases AUM to € 21.8bn FY17 AUM inflows/outflows by strategy  Third party AUM up 13% and fee earning AUM increased 19% since FY16 € bn 2.0  Total net increase € 2.5bn; inflows € 4.0bn; outflows € 1.7bn and € 0.2bn FX and other 1.5  Realisations in corporate investments primarily 1.0 arising on older European and Asia mezzanine funds 1.6 1.5 0.5  FY18 focus on successor funds to corporate 0.6 0.3 investment and real estate strategies and liquid 0.0 strategies Corporate Capital Market Real Asset Secondary Investments Investments Investments Investments (0.1) (0.3) (0.5) (1.3) AUM by Business Unit (1.0) Fee earning AUM AUM (1.5) 31 March 31 March 31 March 31 March Inflow Outflow €m 2017 2016 2017 2016 Corporate Investments 8,516 7,891 10,805 10,431 Capital Market Investments 6,171 4,637 6,171 4,637 Real Asset Investments 2,667 2,521 3,290 3,305 Secondary Investments 1,388 708 1,551 939 18,742 15,757 21,817 19,312

12 Management fee income Management fee income increasing across all asset classes Third party management fee income £m 80.0 Thousands 70.0 60.0 33.6 50.0 33.0 40.0 30.0 20.0 36.1 24.7 23.7 6.4 10.0 20.9 0.9 17.7 17.4 1.2 8.1 0.0 FY16 FY17 FY16 FY17 FY16 FY17 FY16 FY17 Corporate Investments Capital Market Investments Real Asset Investments Secondary Investments Management fee - committed Management fee - invested

13 Fee income Fee rates maintained across asset classes Weighted average fee rate¹ by strategy – FY17  Fee rates have remained broadly flat over the last four years 1.40%  Fee rates continue to be maintained with lower fee rates in capital markets strategies supported 1.20% by higher fee rates from Secondaries 1.29% 1.04%  Performance fees of £9.8m (2016: £14.0m) are 1.00% Group – 0.91% excluded from the weighted average fee calculations 0.95% 0.80% Weighted average fee rates 1 0.60% 0.53% 0.92% 0.91% 0.91% 0.40% 0.88% 0.88% 0.86% 0.20% 0.84% 0.00% 0.80% Corporate Capital Market Real Asset Secondary FY14 FY15 FY16 FY17 Investments Investments Investments Investments FY16 ¹ Weighted average fee rates based on average fee earning AUM during the year and excludes any performance fees

14 FMC operating margin Operating margin exceeds 40% target Operating margin £m 200 50% 180 45% Target margin 160 40% 140 35% 120 30% 100 25% 80 20% 60 15% 40 10% 20 5% 0 0% FY13 FY14 FY15 FY16 FY17 Costs (lhs) Income (lhs) Operating margin (rhs)

15 FMC operating costs Investment in new strategies increasing costs 12 months to 12 months to £m 31 March 2017 31 March 2016 Investment team salaries 25.7 19.7 Marketing salaries 4.6 4.0 Infrastructure salaries 8.7 6.7 Salaries 39.0 30.4 Cash incentives 15.0 10.9 Deferred aw ards 18.8 13.6 Incentive schemes 33.8 24.5 Other non staff costs 29.9 26.8 Placement fees 3.0 3.3 Total 105.7 85.0  Increase in salaries reflects investment in capital markets strategy, ICG Enterprise Trust and our operations infrastructure  Increase in incentive scheme costs as a direct consequence of strong business performance

16 FMC profit trend Strategic delivery as profits growing year on year FMC profit before tax and AUM trend € bn £m 80 25 70 20 60 50 15 40 74 10 61 30 52 40 20 38 38 36 35 5 31 24 10 - - FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FMC PBT Third party AUM

17 Investment Company