Aylett & Co March 2014
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Aylett & Co March 2014 Aylett & Co March 2014 Presentation Transcript

  • Senate Group 14 March 2014
  • Data as at 28 February 2014 USD 53% GBP 10% SEK 1% ASIAN 0% JPY 0% (USD) AUD 1% ZAR 23% EUR 10% CHF 2% The Cape Argus Cycle Tour x 2
  • Data as at 28 February 2014 Agenda Update on Aylett & Co. Nedgroup Bravata Fund Investment Strategy
  • Data as at 28 February 2014 Key facts • Founded in 2005 • Independent Asset Management Boutique • Our view is long term and legacy inspired • Bottom-up stock pickers • Tested philosophy and robust investment process • Integrity, energy and intelligent behaviour form part of the Aylett & Co. ethos. Update on Aylett & Co.
  • Data as at 28 February 2014 Aylett at a glance • Assets under management Update on Aylett & Co.
  • Data as at 28 February 2014 AUM Breakdown • Total AUM: R2.1 billion Update on Aylett & Co. Equity Mandates 50% Worldwide Mandates 39% Balanced Manadates 8% Absolute Return and Hedge Fund Mandates 3% Equity Mandates Worldwide Mandates Balanced Mandates Absolute Return and Hedge Fund Mandates Product Split:
  • Data as at 28 February 2014 Aylett at a glance • Assets under management • Continue to experience flows Update on Aylett & Co.
  • Data as at 28 February 2014 Aylett at a glance • Assets under management • Continue to experience flows • Team of 8 with strong academic credentials Update on Aylett & Co.
  • Data as at 28 February 2014 Aylett at a glance • Assets under management • Continue to experience flows • Team of 8 with strong academic credentials • Diverse product offering Update on Aylett & Co.
  • Data as at 28 February 2014 Aylett & Co. Products Update on Aylett & Co.
  • Data as at 28 February 2014 Aylett & Co. Products Update on Aylett & Co. -500 0 500 1 000 1 500 2 000 2 500 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 AuM (Mn) Aum (Mn) Bravata launched 1 October 2005 Equity Fund launched 3 July 2006 Hedge Fund I launched 13 June 2008 Hedge Fund II launched 1 September 2011 The Aylett Hedge Fund – 1 September 2013 Balanced Fund launched 1 November 2013
  • Data as at 28 February 2014 Aylett at a glance • Assets under management • Continue to experience flows • Team of 8 with strong academic credentials • Diverse product offering • Performance has been excellent across all products Update on Aylett & Co.
  • Data as at 28 February 2014 -20 20 60 100 140 180 220 260 300 340 -25 0 25 50 75 100 125 150 175 200 225 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Cumulative Outperformance Aylett Equity Prescient Fund - A1 ALSI TRI* Indexed * Total Return Index assumes dividends and distributions are reinvested **Cumulative outperformance since inception is 41.10% Source: Bloomberg, end February 2014 AYEPF Cumulative Outperformance AYEPF Performance
  • Data as at 28 February 2014 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 95 120 145 170 195 220 245 270 Source: Bloomberg, inception to end February 2014 Bravata CPI Indexed CPI + 5 Indexed Nedgroup Bravata Worldwide Flexible Fund Bravata Performance
  • Data as at 28 February 2014 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 50 75 100 125 150 175 200 Fund Indexed STeFI Indexed Note: Fund structure changed on 1 September 2013 Source: Bloomberg, inception to end February 2014 Fund outperformance since inception is 36.6% The Aylett Hedge Fund AHF Performance
  • Nedgroup Bravata Worldwide Flexible Fund
  • Data as at 28 February 2014 What is Bravata? Bravata is a rand denominated Worldwide Asset Allocation Flexible Fund • Worldwide: Bravata may invest in both South African and foreign markets. No minima are set for either domestic or foreign assets. • Flexible Asset Allocation: the portfolio can invest in a flexible combination of investments in equities, bonds and money thus giving exposure to multiple asset classes. • Rand Denominated: allows easy offshore exposure without the hassle of exchanging currency and SARB applications. Nedgroup Bravata
  • Data as at 28 February 2014 Our value proposition • Amongst peers, Bravata has performed well Bravata Performance
  • Data as at 28 February 2014 Our value proposition • Amongst peers, Bravata has performed well Bravata Performance For internal use only as this does not comply with the code of advertising for unit trusts YTD 1 year 2 years 3 years 5 years 7 years 2014/01/01 2013/03/01 2012/03/01 2011/03/01 2009/03/01 2007/03/01 2014/02/28 2014/02/28 2014/02/28 2014/02/28 2014/02/28 2014/02/28 Group/Investment Return Rank Return Rank Return Rank Return Rank Return Rank Return Rank (ASISA) Wwide MA Flexible Coronation Optimum Growth A 1.07 16 37.57 4 33.96 2 27.26 1 22.99 1 11.01 4 Foord Flexible FoF R 0.96 17 27.64 7 28.23 4 24.67 3 22.85 2 Coronation Market Plus 1.64 9 23.33 15 23.09 12 19.39 6 22.84 3 13.48 1 Efficient BCI Worldwide Flexible 0.71 19 21.60 17 23.48 10 19.03 8 18.73 4 12.75 2 Nedgroup Inv Bravata Ww Flex A 0.79 18 29.42 6 28.08 5 21.38 4 17.87 5 10.71 5 Oasis Crescent Worldwide Flexible FoF D 3.21 4 26.35 9 23.93 9 17.16 10 17.74 6 Imalivest MET Worldwide Flexible 3.08 5 43.25 1 37.25 1 24.73 2 16.52 7 MET Worldwide Opportunities FoF A -1.55 29 16.51 20 19.74 17 15.46 15 16.24 8 Marriott Worldwide Flexible FoF 0.68 20 25.36 11 24.79 7 18.62 9 15.44 9 7.80 6 MitonOptimal IP Worldwide Flex FoF A1 1.55 11 23.73 13 21.07 14 16.02 13 15.37 10 Consilium MET Worldwide Flexible 0.48 25 26.33 10 25.00 6 19.27 7 15.33 11 Quantum MET Worldwide Flexible FoF 0.59 23 23.33 16 20.69 15 15.97 14 14.59 12 Olympiad MET Worldwide Flexible FoF 0.61 22 16.11 21 19.55 18 14.98 17 13.54 13 5.01 9 Flagship IP Worldwide Flexible 5.25 1 41.13 2 23.24 11 16.19 12 13.22 14 6.44 8 Analytics ACi Worldwide Flexible FoF A 1.90 8 24.46 12 22.52 13 15.45 16 12.44 15 7.23 7 Flagship IP Worldwide Flexible FoF 4.64 2 40.35 3 28.48 3 21.12 5 11.99 16 11.94 3 GCI MET Worldwide Flexible FoF 1.35 14 17.11 19 16.57 19 11.97 18 9.47 17 Peer Group Average 1.25 26.753 24.039 18.648 16.304 9.5969 Peer Group Count 30 21 20 18 17 9
  • Data as at 28 February 2014 Our value proposition • Amongst peers, Bravata has performed well • Amongst worldwide flexible choices Bravata has been a better performer than offshore flexible funds Bravata Performance
  • Data as at 28 February 2014 • Amongst worldwide flexible choices Bravata has been a better performer than offshore flexible funds Our value proposition Bravata Performance For internal use only as this does not comply with the code of advertising for unit trusts Group/Investment Return Rank Return Rank Return Rank Return Rank Return Rank Return Rank (ASISA) Wwide MA Flexible and Global Wwide Flexible Coronation Optimum Growth A 1.07 32 37.57 7 33.96 4 27.26 2 22.99 1 11.01 4 Coronation Global Em Mkts Flex [ZAR] A -2.68 48 21.44 33 26.17 18 19.79 17 22.98 2 Foord Flexible FoF R 0.96 34 27.64 20 28.23 16 24.67 5 22.85 3 Coronation Market Plus 1.64 24 23.33 30 23.09 28 19.39 19 22.84 4 13.48 1 RE:CM Global FF A 4.45 3 47.31 1 38.66 1 30.31 1 20.14 5 Efficient BCI Worldwide Flexible 0.71 36 21.60 32 23.48 26 19.03 21 18.73 6 12.75 2 Old Mutual Intl Gth FoF A 2.47 16 43.99 2 35.55 3 25.69 3 18.30 7 8.64 9 Nedgroup Inv Bravata Ww Flex A 0.79 35 29.42 17 28.08 17 21.38 13 17.87 8 10.71 5 Oasis Crescent Worldwide Flexible FoF D 3.21 7 26.35 23 23.93 24 17.16 24 17.74 9 Imalivest MET Worldwide Flexible 3.08 8 43.25 3 37.25 2 24.73 4 16.52 10 MET Worldwide Opportunities FoF A -1.55 47 16.51 36 19.74 33 15.46 30 16.24 11 Marriott Worldwide Flexible FoF 0.68 37 25.36 25 24.79 22 18.62 22 15.44 12 7.80 11 MitonOptimal IP Worldwide Flex FoF A1 1.55 26 23.73 28 21.07 30 16.02 28 15.37 13 Consilium MET Worldwide Flexible 0.48 42 26.33 24 25.00 21 19.27 20 15.33 14 Quantum MET Worldwide Flexible FoF 0.59 40 23.33 31 20.69 31 15.97 29 14.59 15 Discovery Global Balanced FoF 2.98 11 34.58 11 29.94 11 22.12 10 14.48 16 Marriott International Growth FF A 2.94 12 36.29 9 31.97 7 23.17 6 14.30 17 7.66 13 Peer Group Count 49 37 36 34 33 20 2012/03/01 2014/02/28 2011/03/01 2014/02/28 2009/03/01 2014/02/28 2007/03/01 2014/02/28 2014/01/01 2014/02/28 2013/03/01 2014/02/28 YTD 1 year 2 years 3 years 5 years 7 years
  • Nedgroup Bravata Worldwide Flexible Fund Portfolio Detail
  • Data as at 28 February 2014 Bravata Portfolio Detail Top 15 Holdings % NAV (physical) 1 Berkshire Hath-B 5% 2 Cisco Systems 4% 3 Orbis-Jpn Eqt Us 4% 4 Wal-Mart Stores 3% 5 Loews Corp 3% 6 Bank Ny Mellon 2% 7 Sanofi 2% 8 Barclays Africa 2% 9 Tesco Plc 2% 10 Redwood Trust 2% 11 Carrefour Sa 2% 12 Recm & Calibre L 1% 13 Leucadia Natl 1% 14 Bp Plc 1% 15 Pargesa Holdi-Br 1% Total 36.0% Bonds 9% Cash 44% Equity 47% Asset Allocation
  • Data as at 28 February 2014 Bonds 9% Cash 44% South African Equity 6% USA Equity 24% European Equity 6% UK Equity 4% Japanese Equity 4% Swedish Equity 0% Australian Equity 1% Swiss Equity 2% Other 47% Asset Allocation & Equity Split • Total AUM: R828 million Bravata Portfolio Detail
  • Data as at 28 February 2014 Regional Currency Exposure Bravata Portfolio Detail USD 53% GBP 10% SEK 1% ASIAN 0% JPY 0% (USD) AUD 1% ZAR 23% EUR 10% CHF 2%
  • Data as at 28 February 2014 Investments with great yields Bravata Portfolio Detail
  • Data as at 28 February 2014 Income Enhancing Strategies • ALE Property Group Bravata Portfolio Detail
  • Data as at 28 February 2014 ALE Property Group
  • Data as at 28 February 2014 Income Enhancing Strategies • ALE shares ▫ Aug 2010 bought ALE shares to the value of AUS $326,000 ▫ June 2012 profit + dividends amount to AUS $81,000 ▫ Yield of approximately 12% per annum ALE Property Group
  • Data as at 28 February 2014 Income Enhancing Strategies • ALE shares • ALE notes ▫ April 2011 started buying ALE notes ▫ Bought to the value of AUS $205,000 ▫ To date have earned roughly AUS $42,000 ▫ Yield of approximately 20% ALE Property Group
  • Data as at 28 February 2014 Income Enhancing Strategies • ALE currency swaps ALE Property Group 31 May 2013 24 June 2013 18 July 2013 11 August 2013 8.2 8.4 8.6 8.8 9 9.2 9.4 9.6 9.8 Rand vs AUS $
  • Data as at 28 February 2014 Income Enhancing Strategies • ALE shares • ALE notes • ALE currency swaps ▫ June 2013 – Aug 2013 currency swaps ▫ Rand weakened against the AUS $ ▫ Swapped to the value of AUS $200,000 ▫ Earned roughly R107,000 (R98,000 profit + R11,000 interest) ALE Property Group
  • Data as at 28 February 2014 Income Enhancing Strategies • ALE Property Group • Barclays Group Bravata Portfolio Detail
  • Data as at 28 February 2014 Income Enhancing Strategies Barclays
  • Data as at 28 February 2014 Investment Ideas that worked • Reinet Reinet
  • Data as at 28 February 2014 Reinet 22/01/2014 (eur) (zar) Reinet NAV Value Value %NAV Listed 2 843 41 757 72% BAT shares 2 843 41 757 72% Other 0 0 0% Unlisted 1 378 20 201 35% Cash 229 3 357 6% Derivative asset - pull and call options -4 -484 0% Other -478 -7 007 -12% Sub-Total 3 968 58 248 100% Minority Interest -14 -205 0% Total 3 954 58 043 100%
  • Data as at 28 February 2014 Discount to NAV • Why would it trade at a discount? 1. Can buy underlying investments yourself 2. Holdco costs a) Management Fee b) Performance Fee 3. They tend to keep the cash • BUT it is not justified… 1. Who better to know when to sell BAT? 2. History of treating minorities fairly 3. Exceptional returns earned on investments to date (which we cannot get exposure to) 4. Performance Fee based on Euro price, but got headroom (free ride) Reinet
  • Data as at 28 February 2014 Discount History Reinet
  • Data as at 28 February 2014 Discount moved from 34% to 25% Reinet 34% 25%
  • Investment Strategy
  • Data as at 28 February 2014 • Deflation at the FED Investment Strategy
  • Data as at 28 February 2014 US New One Family Houses Sold • Annual total Investment Strategy
  • Data as at 28 February 2014 • South Africa: Aggregate Valuations Investment Strategy
  • Data as at 28 February 2014 • South Africa vs. Emerging Markets Valuations Investment Strategy
  • Data as at 28 February 2014 • The Naspers effect Investment Strategy
  • Data as at 28 February 2014 • The Naspers effect Investment Strategy
  • Data as at 28 February 2014 • The Naspers effect Investment Strategy
  • Data as at 28 February 2014 • SA economic slowdown Investment Strategy
  • Data as at 28 February 2014 • SA economic slowdown Investment Strategy
  • Data as at 28 February 2014 • SA market is expensive Investment Strategy
  • Data as at 28 February 2014 • Taxation Investment Strategy
  • Data as at 28 February 2014 International (Offshore Equity) • Large Caps • Predictable • Balance Sheet Strength • Majority US • Small bets: Australia, Japan Investment Strategy
  • Data as at 28 February 2014 Looking forward • Avoid long term bonds • Maintain maximum exposure offshore • Increase exposure to small cap and mid cap markets • “Cash is the ultimate contrarian bet” Investment Strategy
  • Data as at 28 February 2014 Aylett Wwide Flexible Performance Investment Strategy
  • Data as at 28 February 2014 Aylett & Co. is an authorised financial services provider approved by the Registrar of Financial Services Providers (www.fsb.co.za) to provide intermediary services and advice in terms of the Financial Advisory and Intermediary Services Act 45 of 2002. Market fluctuations and changes in rates of exchange or taxation may have an effect on the value, price or income of investments. Since the performance of financial markets fluctuates, an investor may not get back the full amount invested. Past performance is not necessarily a guide to future investment performance. Information and opinions have been compiled or arrived at by Aylett & Co. from sources believed to be reliable, but Aylett & Co. does not accept liability for any loss arising from the use hereof nor makes any representation as to their accuracy or completeness. Any underlying research or analysis has been procured by Aylett & Co. for its own purposes and may have been acted on by Aylett & Co. or an associate for its or their own purposes. Thank you