Transcript The Jovian Advantage - Jovian Capital Home Page

AGM Presentation, August 31, 2011
Acquire Create Grow
Disclaimer
The information contained herein, while obtained from sources which are believed to be reliable, is not guaranteed as to its
accuracy or completeness and confers no right to purchasers. Information contained herein may be amended. This presentation is
for information purposes only and does not constitute an offer to sell or a solicitation to buy the securities referred to herein.
Certain statements in this presentation may constitute “forward-looking statements” within the meaning of applicable Canadian
securities laws. These forward-looking statements include statements with respect to our beliefs, plans, objectives, expectations,
anticipations, estimates and intentions. The words “may”, “will”, “could”, “should”, “would”, “believe”, “expect”, and “continue” (or the
negative thereof), and words and expressions of similar import, are intended to identify forward-looking statements. Such forwardlooking statements are based on current expectations and involve certain risks and uncertainties. Actual results might differ
materially from those projecting in the forward-looking statements. In some cases, information regarding certain important factors
that could cause actual results to differ materially from those in the forward-looking statements is contained in Jovian’s filings with
the Canadian securities regulators. Such factors include: general economic and market conditions; our ability to execute our
strategic plans and meet financial obligations; the performance of the principal subsidiaries of Jovian Capital Corporation (“Jovian”);
Jovian’s ability to raise additional capital, if needed; our ability to create, attract and retain assets under management and assets
under administration; risks relating to trading activities and investments; competition faced by Jovian; regulation of Jovian’s
business; successful integration of Jovian with any acquired businesses and the realization of any anticipated synergies;
maintenance of minimum regulatory capital requirements for certain of Jovian’s subsidiaries; potential liability of Jovian and its
subsidiaries under securities laws and for violations of investor suitability requirements; the ability of Jovian and its subsidiaries to
attract and retain key personnel and financial advisors; administrative vulnerability and error; and the availability and adequacy of
insurance coverage for Jovian and its subsidiaries. The preceding list is not exhaustive of all possible risk factors that may influence
actual results and are identified based upon information available as of the date hereof. Many of the factors that will determine our
future performance are beyond our ability to control or predict. You are cautioned not to put undue reliance on any forward-looking
statements. Except as required by applicable securities laws, we do not have any intention or obligation to update forward-looking
statements after this presentation, even if new information, future events or other circumstances have made them incorrect or
misleading.
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Acquire
Create
Grow
Financial services companies in two segments
Wealth
Management
Asset
Managers
The Jovian Advantage
What we offer investee companies:
• Proven track record of growing financial services
companies
• Opportunity to retain brand identity
Strategic Advice
Capital
Networks
Scale
Distribution
Compliance/Legal
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Key to our Strategy
Acquire
Create
Grow
Value Creation
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Value Creation
Ability to crystallize asset value to generate
attractive return on capital
Requires:
• Investment and long term vision, often at
expense of short term earnings
• Experience and ability to grow right type of
assets
• Understanding of the value of an asset to
potential buyers
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Value Creation: Horizons ETF businesses
What we provided:
Result:
• Initial investment of $250,000
for 25% stake in 2006
• Additional investment of
$13 million to grow business
and increase ownership
position to 58%
• Management support
• Immediate infrastructure
• Expertise e.g. legal, accounting
• Credibility and contacts
• 2011 EBITDA of $7.0 million
• Leading edge player in leveraged
and commodity ETF products
• Actively managed ETFs
• Equity investment in BetaShares
in Australia
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Value Realization: Horizons ETF businesses
Attractive offer:
Appropriate timing:
• Mirae Asset Global Investments
to acquire Jovian’s 58% stake in
the Horizons ETF business for
approximately $90 million
• Transaction expected to close in
mid-November subject to several
conditions
• ETF business has grown from
start-up to over $3 billion in AUM
in past five years
• ETF competition intensifying in
Canada
• Global distribution platform and
considerable resources required
to grow Horizons ETFs brand
outside Canada
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Value Creation: MGI Financial
What we provided:
Result:
• New management team
• New business model
• Introduction of corporate branch
concept
• Upgraded systems and
processing
• Expansion into Ontario
• $4 billion in assets under
administration
• Leader in providing group
benefits to First Nations
• Attractive strategic property for
the right buyer
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Value Realization: MGI Financial
Attractive offer:
Appropriate timing:
• Desjardins Financial Security to
acquire MGI Financial and
related companies for $27 million
• Transaction expected to close
Sep. 30 subject to customary
conditions
• Opportunity for MGI Financial to
partner with a national financial
institution with resources to
support continued growth
• MGI Financial provides
Desjardins Financial Security
with expanded presence in
Western Canada
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Strategy Realized
Transactions
demonstrate
Jovian’s ability to
grow companies
with view to
realizing value for
shareholders
“The two transactions
clearly highlight
management’s ability
to crystallize value for
its shareholders.”
Fred Westra, Industrial Alliance Securities,
August 16, 2011 analyst report
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Going Forward
Focus on portfolio of companies that:
• Make sense strategically in today’s marketplace
• Have potential for growth and margin expansion
• Hold strategic value to other market players
Current portfolio of companies
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Current Portfolio of Companies
T.E. Wealth
Asset
Managers
Leon Frazer &
Associates
Hahn Investment
Stewards
Wealth
Management
MGI Securities
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• 70 years in business
• Emphasis on investing in
companies that grow their
dividends
• Manages mutual funds
for IA Clarington and others
Established:
1939
Acquired:
2004
Client assets:
$1.85
billion
$0.7
Future growth plans:
• Expand product offering
• Access additional client
channels
• Tuck-in acquisitions
• Raise company profile
7/17/2015
billion
Client base: primarily HNW individuals, estates
and trusts; also serve institutions, charitable
foundations and pension plans
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• 40 years in business
• One of the largest private wealth
advisors in Canada
• Offers financial planning and
educational services on
fee-only basis
• Future growth plans:
•
•
•
•
Established:
1972
Acquired:
2003
Client assets:
$2.3
billion
$0.8
billion
First Nations communities
Tuck-in acquisitions
Expand client solutions
Raise profile
Client base: HNW individuals and institutions
7/17/2015
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• 7 years young company
• Leader in using ETFs to build
diversified portfolios within
global economy
• Portfolios also offered through
separately managed accounts
(SMAs)
• Future growth plans:
• U.S. distribution channels
• Sub-advisory opportunities
• Strengthen operational
capacity
• Raise profile
7/17/2015
Established:
2001
Acquired:
July 2009
Client assets:
$300
million
$40
million
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• 11 years in business
• Professional wealth management
solutions for institutional and
individual investors
• Focus on small caps which
provide investment opportunities
for clients
• Strong revenue and EBITDA
growth in 2011
• Future growth plans:
Established:
2000
Acquired:
November 2003
Client assets:
$1.5
billion
$0.15
billion
• Expand investment banking
footprint
• Grow existing branches
7/17/2015
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Fiscal 2011 Financial Highlights
Significant increase in asset base
• Client assets increased 15% to $13.5 billion
Strong improvement in revenue and profitability
• Revenue, up 22% to $135.8 million
• EBITDA, up 294% to $6.3 million
Steps taken to strengthen balance sheet
• Completed $10 million convertible debenture issue and $15 million
in secured debt issue
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Revenue by Classification
Total Revenue by Classification
For the years ended March 31 ($ in thousands)
Jovian's strategy is to provide and grow services that create or shift assets to recurring revenue,
while maintaining its core assets under administration and related transactional revenue.
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Revenue by Segment
Total Revenue by Segment
For the years ended March 31 ($in thousands)
Jovian’s strategy is to diversify its revenue across its three operating segments.
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Client Assets
Client Assets*
As at March 31 ($ in billions)
Client assets continued to increase in 2011 as a result of the recovery in the financial markets
and the growth of our assets under management were further supported by the continued success and
acceptance of our ETF products.
* Assets Under Administration prior to 2010 has been restated to reflect the sale of Felcom Data Services Inc. business line, completed Oct. 23, 2009
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Summary
• 2011 positive year with growth in revenues,
EBITDA, and client assets
• Horizons, MGI Financial sales have surfaced
true value of Jovian’s operating companies
• Focus on growing current portfolio of companies
and looking for new growth opportunities
• Value creation for shareholders will continue
to drive Jovian’s investment decisions
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AGM Presentation, August 31, 2011
Acquire Create Grow