Kd funds vienna presentation_march_2012

522 views

Published on

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
522
On SlideShare
0
From Embeds
0
Number of Embeds
132
Actions
Shares
0
Downloads
7
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Kd funds vienna presentation_march_2012

  1. 1. We are SEE asset manager with focus on Emerging European UnionUniqueness of the EU convergence process in theregion combined with relatively low correlationpresents attractive opportunities for investors.CEE: Central & Eastern EuropePoland: EU Member 2004Czech Rep.: EU Member 2004Hungary: EU Member 2004SEE: South East EuropeSlovenia: EU Member 2004Romania: EU Member 2004Bulgaria: EU Member 2004Croatia: EU Candidate 2003, EU Member 2013Macedonia: EU Candidate 2004Serbia: EU Candidate 2012Bosnia & Herzegovina: n.a. Core Region Narrow Strategic Region Broad Strategic Region
  2. 2. Our ideas are tested from different angels Cycle & Relative Global Macro-economics & Risk matrix earnings money allocation strategy potential flow guidelines TOP-DOWN Analytics Portfolio construction Portfolio revision Analytics BOTTOM UP Analytics Investible Approved stock Initial screening Idea generation universe list 3
  3. 3. 35% Implied Cost of Equity and Maximum Cycle Drawdown 30% PAKISTAN 25% ARGENTINA 20% VIETNAM UKRAINERequired Return NIGERIA SRI LANKA KENYA 15% JORDAN KAZAKHSTAN BANGLADESH KUWAIT SERBIA UAE LEBANON MAURITIUS SLOVENIA ROMANIA TUNISIA 10% CROATIA BULGARIA LITHUANIA BAHRAIN ESTONIA OMAN QATAR 5% 0% 20% 30% 40% 50% 60% 70% 80% 90% 100% Maximum DrawdownEven though GDP growth is higher than indeveloped countries, markets were hit badly
  4. 4. 250 Recent versus current post peak crisis development Crisis composite index MSCI World AC200 I MSCI Emerging Markets Lower band - historical volatility (2std. Dev.) n Upper band - historical volatility (2std. Dev.) STOXX Balkan ex-Greece & Turkey d e x150 e d V a100 l u e 50E U R Local high before crisis = 100 0 okt.2007 okt.2008 okt.2009 okt.2010 okt.2011 okt.2012 okt.2013 okt.2014 okt.2015 okt.2016 and investors in a way ignored the region for the last few years
  5. 5. What makes us different?
  6. 6. Keeping a tight grip on the top down factors – Spliting of the factors Romanian Equity Index BET and Total Risk Premium vs. 10 Year Bund YTM12.000 18,00% BET Index Romanian risk premium 16,00%10.000 14,00% 8.000 12,00% 10,00% 6.000 8,00% 4.000 6,00% 4,00% 2.000 2,00% 8,00% 0 Romania Macro Credit Risk Premium 0,00% 6,00% 4,00% 2,00% 0,00%12,00%10,00% 8,00% 6,00% 4,00% Romania Pure Equity Risk Add-ON Premium 2,00% 0,00% 2007 2008 2009 2010 2011
  7. 7. Playing the Top Down Factor – Increasing Romania Country Weighting on Macro Credit Premium Contraction and Rewarding Equity Risk Premium Component Romanian Equity Index BET and Total Risk Premium vs. 10 Year Bund YTM12.000 18,00% BET Index Romanian risk premium 16,00%10.000 14,00% 8.000 12,00% 10,00% 6.000 8,00% 4.000 6,00% 4,00% 2.000 Rally fuelled only by contraction 2) Reversal of macro premium , equity premium 2,00% 8,00% 0 1) Premium escalation Romania Macro Credit Risk Premium contraction still in the cards . 0,00% 6,00% Loosing steam 3) Stabilisation and decline in premium 4,00% 2,00% 0,00%12,00% 4) Pure premium for equity still hovering round record highs10,00% 8,00% 6,00% 4,00% Romania Pure Equity Risk Add-ON Premium 2,00% 0,00% 2007 2008 2009 2010 2011
  8. 8. How we hunt for value? Krka -A core blue-chip case Evolution of earnings per share potential 6€ 5€ 4€ 3€ 2€ 1€ -€ Share price and normalized earnings bands 140 10 12,5 15 Price 17,5 20 120 100 80 60 40 20 Share price implied equity risk premium 014,0%13,0%12,0%11,0%10,0%9,0%8,0%7,0%6,0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
  9. 9. How we hunt for value? Krka -A core blue-chip case Evolution of earnings per share potential 6€ 1) Keeping and eye on continuity of management decisions and follow through¸with 5€ regular one –on-one meetings and on the field information gathering 4€ to make sure we understand the underlying factors and 3€ get a sustainibilty appraisal 2€ 1€ -€ Share price and normalized earnings bands 140 10 12,5 15 Price 17,5 20 120 100 2) Waiting for the margin of safety, when the 80 market sentiment hits gloom and normalized P/E moves towards low end of the range 60 40 20 Share price implied equity risk premium 014,0% 3) We use secondary indicators like equity risk premiums on indidivdual13,0%12,0% shares to complement our valuation models and soft factors analysis11,0%10,0%9,0%8,0%7,0%6,0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
  10. 10. KD Balkans Top 10 holdings as of 29.2.2012Name Weight Country Sector eP/E e P/B e EV/EBITDAKrka 8.9% Slovenia Health Care 9,8 1,34 5,8BRD 7.2% Romania Financials 7,7 1,02 -OMV Petrom 7.1% Romania Energy 5,6 0,95 3,7Mercator 4.5% Slovenia Consumer Staples 30,6 0,63 9,7Banca 4.3% Romania Financials 8,8 0,70 -TransilvaniaPetrol 4.2% Slovenia Consumer Discretionary 6,2 0,85 7,0AIK Banka 4.1% Serbia Financials 4,0 0,36 -NIS 3.8% Serbia Energy 3,1 1,11 2,5Zavarovalnica 2,2% Slovenia Financials 5,4 0,56 -TriglavTelekom 2.0% Slovenia Telecommunications 8,1 0,53 3,11Slovenije Services
  11. 11. The easiest way to get an exposure to the SEE region
  12. 12. So there is a reason to invest.
  13. 13. Disclaimer This presentation is provided for information purposes only and does not constitute financial or investment advice or form part of an offer, subscription, recommendation or solicitation to buy or sell any financial instrument, nor should it be relied on in connection with any contract or commitment. Returns are not guaranteed and investment returns tend to fluctuate. Past performance does not guarantee future results. KD Funds – Management Company LLC (KD Skladi, družba za upravljanje, d. o. o.), Dunajska 63, Ljubljana, Slovenia, manages the KD Umbrella Fund and its subfunds KD Galileo, Flexible Asset Structure; KD Rastko, Equity; KD Bond; KD MM, Money Market; KD First Selection, Fund of Equity Funds; KD Balkans, Equity; KD New Markets, Equity; KD North America, Equity; KD Raw Materials and Energy, Equity; KD Technology, Equity; KD New Energy, Equity; KD Vitality, Equity; KD India – China, Equity; KD EM Infrastructure and Construction, Equity; KD Financials, Equity; KD Latin America, Equity; and KD Eastern Europe, Equity, as well as the KD Equity Income Mutual Fund (KD Delniški dohodkovni). The investor is entitled to request a free copy of the simplified prospectus, the prospectus including the fund rules and the latest published audited annual and semi-annual reports (in Slovenian language). These and other documents as well as data and information referring to the funds are available to investors free of charge during business hours at the Management Company’s headquarters and subscription offices, and in e-format on the website www.kd-skladi.si, along with a list of subscription offices. KD Funds is registered in Slovenia.

×