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City wire recovery presentation september final

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  • 1. Rathbone Recovery Fund Citywire Wealth Manager Retreat Conference Rathbone Recovery Fund - James Baker, Assistant Fund Manager Greg Mullins, Sales Director Helen van Heesewijk, Associate Director - Sales
  • 2. Agenda  Introduction  Our definition of recovery  Key investment characteristics  Areas of investment  Historic performance  Appendix 2
  • 3. Introduction Marina Bond Small and Midcap specialist James Baker Small and Mid-cap specialist: • • Renown for his considerable expertise in mid to small-cap stock selection. • Julian Chillingworth Large-cap specialist Over 30 years’ equity market experience on both the buy and sell-sides. James works alongside co-managers of the Rathbone Recovery Fund Julian Chillingworth and Marina Bond Specialist mid and small-cap expertise 3
  • 4. Our definition of recovery  Business transformation & management change  Macro/cyclical  Stock specific  Fashion A focused fund with the freedom to invest across a wide universe 4
  • 5. Key investment characteristics  Revenue growth & visibility  Margin & cashflow  Balance sheet  Management “… finding a company whose potential recovery-value is not appreciated by the market” 5
  • 6. Key investment characteristics Idea Generation Brokers Management Teams Fundamental Analysis Top down/bottom up: Macro, Industry, Stock Forensic financial analysis Reject? Company Meeting Qualitative assessment of management Valuation Portfolio Construction BUY WATCHLIST 6 Reject?
  • 7. Areas of Investment Blinkx - £547m Market capitalisation  Business:  Source: Internal.  Criteria: High growth, high margin  Opportunity: Stock-specific - De-rated after two poorly explained acquisitions and a profits Blinkx has developed an internet search engine, which sources online video clips for websites like AOL and ASK. It monetises this service by attaching adverts to these video clips, sharing the revenue with its content providers and the web publisher using its search engine. warning in early 2012. Data Source: Factset 7
  • 8. Areas of Investment SQS Quality Software - £118m Market capitalisation  Business: SQS is a software testing business. Recently it has repositioned itself from providing ad hoc testing services to customers, to offering a managed testing service to major clients on long term contracts. This new model has improved both revenue visibility and margins. Furthermore it has begun partnering major software vendors like Siemens, testing their new products and codes prior to sale. This strategy has enabled SQS to on-sell its services to Siemens own customers and expanding out of its traditional European market into the USA.  Source: Internal  Criteria: Revenue growth and improved visibility  Opportunity : New management , business transformation Data Source: Factset 8
  • 9. Areas of Investment Wilmington - £184m Market capitalisation  Business: Wilmington has transformed itself in recent years from an advertising dependent publisher of business-to-business magazines, to a subscription based provider of online business information. It provides business critical information into the Legal, Insurance, Compliance and Health markets.  Source: Internal  Criteria: Revenue visibility, high margin, management  Opportunity: Business transformation, management change Data Source: Factset 9
  • 10. Historic performance One Year 40 35 30 3 years cumulative performance (%) 1 year cumulative performance (%) risk v return Rathbone Recovery 25 20 IMA sector average 15 10 6 8 10 1 year annualised volatility (%) 12 Three Years 90 70 Rathbone Recovery 50 IMA sector average 30 10 10 Data Source – Financial Express. Data to 30/09/2013, net income reinvested. *Rathbone Recovery Fund launched on 13 July 2009 Past performance should not be seen as an indication of future performance 10 12 14 3 year annualised volatility (%)
  • 11. Historic performance Performance % 6 mths 1 yr 3 yrs Launch* Rathbone Recovery Fund IMA UK All Companies Sector Quartile Rank 9.96 6.26 1 47/278 23.53 22.49 2 105/276 47.02 36.48 1 52/262 108.7 91.5 1 55/253 3.84 18.93 33.36 85.74 6 mths 1.62 1.00 1 yr 2.22 2.26 3 yrs 1.08 0.81 Launch* 1.25 0.99 FTSE All Share -Index Sharpe Ratio Rathbone Recovery Fund IMA UK All Companies Sector The Rathbone Recovery Fund is a vehicle for all stages of the economic cycle Source: Data Source – Financial Express. Data as at 30/09/2013, net income reinvested. Based on R-class units *Rathbone Recovery Fund launched on 13 July 2009 Past performance should not be seen as an indication of future performance 11
  • 12. Appendix 12
  • 13. Portfolio breakdown Top 5 FTSE 100 Top 5 FTSE 250 Unilever WPP 3.24 BG Group 2.92 Melrose 2.42 Aberdeen Asset Management Booker Senior Hansteen Holdings Synergy Health Aveva Group 3.29 2.26 Top 5 Small-cap/AIM Clarkson Sanofi Daily Mail GB Group Advanced Medical Solutions Data source: Rathbones, data as at 30/09/2013 13 2.69 2.56 2.26 2.25 2.13 3.77 3.12 2.92 2.43 2.25
  • 14. Portfolio breakdown Capitalisation Split Cash, 9.85 Europe, 3.67 FTSE 100, 24.15 Sector Split FTSE AIM and other UK, 22.01 Cash, 9.85 Technology, 10.46 FTSE Small Cap, 11.58 Oil & Gas, 9.71 Basic Materials, 5.98 FTSE 250, 28.74 Financials, 14.40 Telecommunications, 1.29 Consumer Services, 18.14 Data Source: Rathbones. Data as at 30/09/2013 14 Industrials, 18.49 Consumer Goods, 3.29 Health Care, 8.40
  • 15. James Baker Assistant Fund Manager  James with over 30 years’ equity market experience on both the buy and sell-sides joined Rathbones in October 2012.  Specialising in mid and small-cap stock selection, James was brought into the Rathbone Recovery Fund team for his expertise to work alongside comanagers Julian Chillingworth and Marina Bond.  He has worked for several organisations in this field including Capel-Cure Myers, ABN Amro, and most recently, Collins Stewart.  James graduated from the University of Cambridge with a BA Honours degree in History. True mid and small cap expertise 15
  • 16. Julian Chillingworth Chief Investment Officer  Over 30 years’ experience managing equity and balanced portfolios both institutional and retail.  Co-Manager of the Rathbone Recovery fund working alongside Marina Bond and James Baker.  Prior to joining Rathbones 10 years ago he ran the Pensions and Charities subsidiary of Hambros/Investec.  Gross funds business, assets in excess of £6bn. True large cap expertise 16
  • 17. Marina Bond Fund Manager, Investment Director  Co-Manager of the Recovery Fund, working alongside Rathbones CIO Julian Chillingworth and James Baker.  Previously, she managed the Rathbone Smaller Companies Fund, and in July 2009, undertook the merger of the Rathbone Special Situations Fund into Smaller Companies Fund to form the Rathbone Recovery Fund.  Marina joined Rathbones in 2000, and has 12 years’ experience of analysing small and mid-cap companies.  She holds the Investment Management Certificate and the Securities Institute Diploma. She is also a Fellow of the Securities Institute. True mid and small cap expertise 17
  • 18. Important Information  The information contained in this presentation is for use by investment advisers and is not intended for circulation to clients or to the general public  Past performance should not be seen as an indication of future performance. The value of investments and the income from them may go down as well as up and you may not get back your original investment. Rathbone Investment Management and Rathbone Unit Trust Management are authorised and regulated by the Financial Conduct Authority and Rathbone Unit Trust Management is a member of the IMA. Rathbone Unit Trust Management Limited : Registered Address 1 Curzon Street, London, W1J 5FB Registered No. 02376568 - A Member of the Rathbone Group. 18
  • 19. The Website: www.rutm.com What’s available: For guidance, call:  Sign up for the updates alert service – notification of selected updates delivered to your inbox. 0207 399 0399  Up-to-date prices and performance information and charting tools for comparing funds and sectors.  Literature updates.  Latest news, events, comment and webcasts. 19 Or email: rutm@rathbones.com
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