P2P Global Investments PLC Specialist Lending Credit Investment Trust Managed by Pollen Street Capital Group (“PSC”) Investor Presentation Day 16 January 2019
Pollen Street Capital - Specialist in Financial and Business Services £2.7bn AUM across Specialist Lending Credit and Private Equity Strategies Specialist knowledge Operational and and track record workout expertise Access to Operating in the specialist Well invested infrastructure lending space for over significant and experienced operations 10 years with a highly team managing over proprietary deal flow successful track record 150,000 loans £3.5bn new opportunities reviewed in 2018 with completions of £100m+ per month Relationships 50 existing partners provide ongoing deal flow with 500+ sales force 27 investment professionals GLOBAL I NVESTMENTS 2 PLEASE REFER TO THE FINAL PAGES FOR IMPORTANT INFORMATION
Investment philosophy based upon three pillars Control, partnership and alignment are fundamental to PSC credit management approach • PSC control the credit box – by deploying its own scorecards and underwriting or by locking down existing processes Active • Input into underwriting journey underwriting • PSC control the servicing • Active feedback loop driving strategy continual improvement • Utilise PSC industry experts for high value-add activities while leveraging trusted loan servicers for commodity Sustainable High- operations quality attractive portfolio • Enables optimal collection returns management strategy across different asset classes • Third-party providers operate Strong • Partner with highly experienced on a variable and contingent alignment & teams cost basis, delivering a low partnership • Ensure deal structures deliver cost-to-collect alignment of interest • Contractual arrangements, which secure long-term access • Equity interests where we contribute to value creation and entry valuations are attractive 3 PLEASE REFER TO THE FINAL PAGES FOR IMPORTANT INFORMATION
Pollen Street Capital Market Positioning GLOBAL I NVESTMENTS
Specialist Lending Why does it exist? • Clearing banks focussed on commodity products in large scale markets • They are no longer equipped to serve the more specialist markets that require Underserved ➢ Tailored underwriting Markets ➢ Specialist knowledge and often human skill ➢ Bespoke IT integration and / or data analytics • High quality originators often do not want to operate within banks today Talent • These teams are focused on certain parts of the market develop relationships and expertise in their chosen segments • Each of these markets are a small percentage of the overall market Scale • However in total they represent a large absolute volume of lending Attractive economics driven by specialist approach 5 PLEASE REFER TO THE FINAL PAGES FOR IMPORTANT INFORMATION
Pollen Street Approach Scale across specialists • Deep understanding of the banking model • Embedded relationships across originators, data providers, servicers and capital providers Sector focus • Able to identify assets that aim to deliver higher returns for risk • 50+ partners across range of asset classes and functions – optimising each part of the journey Partner model • >500 originators, nationwide • Standardised data across wide range of platforms and partners Data and • Deep insight into landscape of lending and underlying performance Technology • Sharing of best practise • Range of partners focused on different parts of the market to provide diversity • Not exposed to single asset class Diversification • Highly granular portfolio which are constructed to withstand significant stress PSC aggregates and shares best practice 6 PLEASE REFER TO THE FINAL PAGES FOR IMPORTANT INFORMATION
Specialist Credit Loans Offer Attractive Investment Characteristics Strategy focussed on assets that provide significant security and attractive yields • Secured by assets and/or receivables • Often supported by seasoned cashflows and/or guarantees Secured • Strong covenants and disciplined underwriting • Small ticket loans produce high degree of predictability in cashflows • Highly predictable with robust performance through the cycle Granular asset exposure • Minimal event driven risk and constructed to withstand stress • Short duration of loans means credit criteria and pricing can be changed quickly in event of changing macro environment Short Duration • Majority of loans are amortising with high cash generation • Focussed on less competitive sub segments Attractive Yield • Premium delivered for effort not risk Low loss given default 7 PLEASE REFER TO THE FINAL PAGES FOR IMPORTANT INFORMATION
Rigorous credit stress testing framework Underwriting process focuses on stressing the macro environment UK House Price Inflation — Historical and Future Projections UK Real GDP Growth Rates — Historical and Future Projections 6.0% 15.0% 4.0% 10.0% 2.0% 5.0% 0.0% 0.0% 08Q1 10Q1 12Q1 14Q1 16Q1 18Q1 20Q1 08Q1 10Q1 12Q1 14Q1 16Q1 18Q1 20Q1 -2.0% -5.0% -10.0% -4.0% -15.0% -6.0% -20.0% -8.0% Historical Base Case Projection Historical Base Case Downside BoE ACS Downside Projection BoE ACS UK Base Rate — Historical and Future Projections UK Unemployment Rates — Historical and Future Projections 10.0% 6.0% 5.0% 8.0% 4.0% 6.0% 3.0% 4.0% 2.0% 2.0% 1.0% 0.0% 0.0% 08Q1 10Q1 12Q1 14Q1 16Q1 18Q1 20Q1 08Q1 10Q1 12Q1 14Q1 16Q1 18Q1 20Q1 22Q1 Historical Base Case Projection Historical Base Case Downside BoE ACS Downside Projection BoE ACS Source: Oxford Economics (Q4 2018). ACS scenario as published by the Bank of England lagged by 9 months 8 PLEASE REFER TO THE FINAL PAGES FOR IMPORTANT INFORMATION
P2Pgi Update GLOBAL I NVESTMENTS
c.$90m sale of New Managed Initial partners mainstream accounting administration reduced from consumer system of URICA and 25 to 7 1 assets implemented WGF Annualised Rolling 3 Months NAV Returns 7% 100% 6% increase 5% 73% 4% increase 3% 2% 1% 0% Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 -1% -2% -3% Run off Continuing Originated Sale of two portfolio portfolio with 8 new pools of NPLs reduced to increased to partners 1 20% 80% 1 Includes through to January 2019. 10 Note PSC assumed management in September 2017. PLEASE REFER TO THE FINAL PAGES FOR IMPORTANT INFORMATION
Significant Performance Improvement A year of repositioning and performance improvement • Fundamentally repositioned the portfolio Portfolio • Run-off assets significantly reduced from 48% to 20% of portfolio 1 Repositioned • Continuing assets increased from 52% to 80% of portfolio 1 • NAV return of 5.2% achieved YTD 2018 despite having absorbed more than £10m of one offs NAV Returns • NAV return increased to 6% in H2 2018 Increased • Continuing assets performing strongly with c.10% 2 risk adjusted yield • Strategy focussed on assets with low loss given default supported by assets and receivables Clear Strategy • Rebuilt US business to focus on specialist assets Focussed on • Increased exposure to Ireland and actively exploring opportunities in Europe Low LGD assets • UK focused on proven specialists 1 Investment assets less debt as a percentage of total investment assets less debt but before the P2PGI topco facility. 2 Risk adjusted returns calculated as income yield calculated as Jan-18 to Nov-18 income less bad debt expense calculated as Jan-18 to Nov-18 impairments excluding IFRS 9 Stage 1 over average credit assets over the year annualised. 11 PLEASE REFER TO THE FINAL PAGES FOR IMPORTANT INFORMATION
Portfolio Overview – Continuing 1 NAV split by Continuing and Run off portfolio 2 Rolling 3m Risk Adjusted Yield – Continuing Assets 3 % 100% 12% 90% 80% 10% 70% 8% 60% 50% 6% 40% 30% 4% 20% 2% 10% 0% 0% Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Run Off Investment assets Continuing Investment assets Split by Sector Remaining Term Split Split by Yield Gross Outstanding Balances Gross Outstanding Balances Gross Outstanding Balances 12% 16% 17% 24% 33% 35% £745m 7% 35% 36% 9% 49% 26% SME Property Backed Consumer <12 12-24 24-36 36-48 >48 <7.5% 7.5%-10.0% 10.0%-12.5% >12.5% 1 Continuing and run-off portfolio overview excludes bond and equity positions. 2 Investment assets less debt as a percentage of total investment assets less debt but before the P2PGI topco facility. 12 PLEASE REFER TO THE FINAL PAGES FOR IMPORTANT INFORMATION 3 Income yield less bad debts excludes stage 1 IFRS 9
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