Asset Management Industry

Transcription

1 z Industry Observations March 31, 2018 Asset Management Industry

2 Select Asset Management Public Company Industry Data (USD in millions, except per share data) Price at 03/31/18 % of 52 Week High Equity Value Enterprise Value Debt / Total Capital Assets Under Management LTM Revenue LTM Earnings CY 2018 Revenue Estimate CY 2018 Earnings Estimate Company Name Ticker Traditional Asset Management Apollo Global Management, LLC APO $ % $5, $ % $248, $2, $ $2, $ Artisan Partners Asset Management Inc. APAM $ % $1, $1, % $115, $ $49.60 $ $ Eaton Vance Corp. EV $ % $6, $6, % $449, $1, $ $1, $ Federated Investors, Inc. FII $ % $3, $3, % $397, $1, $ $1, $ GAMCO Investors, Inc. GBL $ % $ $ % $43, $ $77.81 $0.00 $0.00 Janus Henderson Group plc JHG $ % $6, $5, % $370, $1, $ $2, $ Legg Mason, Inc. LM $ % $3, $5, % $767, $3, $ $3, $ Waddell & Reed Financial, Inc. WDR $ % $1, $ % $81, $1, $ $1, $ Alternative Asset Management Market Data LTM Operating Data Forward Estimates Ares Management, L.P. ARES $ % $1, $8, % $106, $1, $76.18 $1, $ Oaktree Capital Group, LLC OAK $ % $2, $8, % $100, $1, $ $1, $ Och-Ziff Capital Management Group LLC OZM $ % $ $1, % $32, $ $21.08 $ $93.10 Virtus Investment Partners, Inc. VRTS $ % $ $2, % $90, $ $37.01 $ $83.53 Private Equity/ Venture Capital BlackRock Capital Investment Corporation BKCC $ % $ $ % $0.00 $97.33 $20.90 $89.22 $57.69 Capital Southwest Corporation CSWC $ % $ $ % $0.00 $32.98 $30.30 $42.63 $20.29 Hercules Capital, Inc. HTGC $ % $1, $1, % $0.00 $ $79.00 $ $ Main Street Capital Corporation MAIN $ % $2, $2, % $0.00 $ $ $ $ Prospect Capital Corporation PSEC $ % $2, $4, % $0.00 $ $ $ $ The Carlyle Group L.P. CG $ % $2, $8, % $195, $3, $ $2, $ Triangle Capital Corporation TCAP $ % $ $ % $0.00 $ $28.65 $89.50 $46.50 Notes: LTM (latest twelve months); Enterprise Value (market capitalization less total cash and short-term investments plus short-term borrowings and total long-term debt); EBITDA (earnings before interest, taxes, depreciation and amortization) Source: Capital IQ The material contained in this publication is meant to provide general information regarding valuation topics. This publication does not constitute investment advice with respect to the securities of any company discussed herein, is not intended to provide information upon which to base an investment decision, and should not be construed as such. Professional advice should be obtained before taking any action based on the information contained herein. Publicly available information utilized in this publication has been obtained from sources deemed to be reliable. Houlihan does not guarantee the accuracy or completeness of the information provided within this publication. The material presented reflects information known to the authors at the time this publication was written and this information is subject to change. Houlihan Capital 2

3 Select Asset Management Public Company Valuation Metrics (USD in millions, except per share data) Company Name Ticker Return On Assets Return On Equity LTM Operating Statistics Return On Revenue Capital Growth Net Income Growth Net Income Margin TEV/ LTM Revenue Trading Multiples TEV/ CY 2018 Revenue Price/ LTM Earnings Traditional Asset Management Apollo Global Management, LLC APO 22.9% 60.6% 0.0% 32.7% 56.2% 24.6% 0.0x 0.0x 26.5x Artisan Partners Asset Management Inc. APAM 20.2% 104.5% 52.1% 10.4% -32.1% 6.2% 2.3x 2.2x 5.9x Eaton Vance Corp. EV 15.5% 28.8% 18.3% 16.8% 22.9% 18.8% 3.8x 3.4x 23.5x Federated Investors, Inc. FII 17.9% 41.6% 24.0% -3.5% 39.5% 26.4% 2.7x 2.6x 15.4x GAMCO Investors, Inc. GBL 66.7% N/A 263.7% 2.1% -33.6% 21.6% 2.3x N/A 9.0x Janus Henderson Group plc JHG 7.2% 19.0% 9.5% 74.4% 246.8% 37.6% 3.1x 2.4x 15.4x Legg Mason, Inc. LM 4.1% 8.9% 4.8% 10.6% 231.6% 11.4% 1.8x 1.8x 14.4x Waddell & Reed Financial, Inc. WDR 10.9% 16.6% 14.3% -6.6% -9.8% 12.2% 0.9x 0.9x 11.1x Mean 20.7% 40.0% 48.3% 17.1% 65.2% 19.9% 2.1x 1.9x 15.1x Median 16.7% 28.8% 16.3% 10.5% 31.2% 20.2% 2.3x 2.2x 14.9x Alternative Asset Management Ares Management, L.P. ARES 1.7% 12.2% 2.0% 18.0% -31.9% 5.4% 5.8x 6.4x 30.8x Oaktree Capital Group, LLC OAK 3.3% 27.0% 3.9% 30.6% 18.9% 15.8% 5.9x 6.0x 40.8x Och-Ziff Capital Management Group LLC OZM 10.7% 90.9% 22.0% 11.3% N/A 2.5% 1.6x 1.8x 3.1x Virtus Investment Partners, Inc. VRTS 3.1% 8.2% 3.5% 31.9% -23.7% 8.7% 5.6x 4.5x 16.7x Mean 4.7% 34.6% 7.8% 22.9% -12.2% 8.1% 4.7x 4.7x 22.8x Median 3.2% 19.6% 3.7% 24.3% -23.7% 7.0% 5.7x 5.3x 23.7x Private Equity/Venture Capital BlackRock Capital Investment Corporation BKCC 5.2% 3.6% 5.4% -17.1% N/A 21.5% 6.6x 7.2x 12.7x Capital Southwest Corporation CSWC 3.4% 10.4% 3.6% 68.6% 51.4% 91.9% 10.5x 8.1x 27.0x Hercules Capital, Inc. HTGC 5.7% 9.7% 5.8% 9.0% 15.0% 41.4% 9.1x 8.5x 16.6x Main Street Capital Corporation MAIN 5.0% 13.2% 5.1% 15.4% 22.8% 82.9% 14.3x 13.1x 24.7x Prospect Capital Corporation PSEC 4.5% 6.0% 4.6% -11.7% -42.1% 31.0% 6.5x 7.0x 13.7x The Carlyle Group L.P. CG 6.9% 45.8% 10.0% 61.6% % 6.6% 2.4x 3.1x NM Triangle Capital Corporation TCAP 5.3% -4.6% 5.4% 8.2% N/A -23.3% 7.6x 10.5x 11.7x Mean 5.2% 12.0% 5.7% 19.2% 752.2% 36.0% 8.1x 8.2x 17.7x Median 5.2% 9.7% 5.4% 9.0% 22.8% 31.0% 7.6x 8.1x 15.1x Notes: LTM (latest twelve months); NTM (next twelve months); EBITDA (earnings before interest, taxes, depreciation and amortization); TEV (total enterprise value) Source: Capital IQ Houlihan Capital 3

4 Asset Management Public Company LTM Equity Performance 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% % % Traditional Asset Management Private Equity/Venture Capital S&P 500 Alternative Asset Management Dow Jones Industrial Average Note: The indices are derived from the equity performance of the previously listed companies. Source: Capital IQ Houlihan Capital 4

5 Recent M&A Activity in Asset Management Industry April 1, 2017 to March 31, 2018 (USD in millions) Target Company Implied Equity Close Date Target Acquirer Primary Industry Value 12/27/2017 Fortress Investment Group LLC SoftBank Group Corp. Asset Manag4ement and Custody Banks $3, /31/2018 Northstar Real Estate Income II, Inc. Colony NorthStar, Inc. Asset Manag4ement and Custody Banks $ /15/2017 Logan Circle Partners, L.P. MetLife, Inc. Asset Manag4ement and Custody Banks $ /5/2018 Heitman LLC N/A Asset Manag4ement and Custody Banks $ /17/2017 Scout Investments, Inc. Carillon Tower Advisers, Inc. Asset Manag4ement and Custody Banks $ /1/2017 Geneva Advisors, LLC Atlantic Trust Advisors, Inc. Asset Manag4ement and Custody Banks $ /1/2018 Cole Capital Advisors, Inc. CIM Group, Inc. Asset Manag4ement and Custody Banks $ /2/2017 Wins Finance Holdings Inc. Freeman FinTech Corporation Limited Asset Manag4ement and Custody Banks $ /2/2018 Alta Capital Management LLC Guardian Capital Group Limited Asset Manag4ement and Custody Banks $ /8/2018 Asset Management Business of MMA Capital Management, LLC Hunt Companies, Inc. Asset Manag4ement and Custody Banks $ /19/2018 PAX World Management Corporation Impax Asset Management Group plc Asset Manag4ement and Custody Banks $ /18/2017 Evercore Trust Company, N.A., Institutional Trust and Newport Trust Company Asset Manag4ement and Custody Banks $ /12/2018 Westwood Holdings Group, Inc., Private Wealth Business in Bridges Investment Management Inc. Asset Manag4ement and Custody Banks $ /30/2017 AFH Acquisition IX, Inc. Enrochem Limited Asset Manag4ement and Custody Banks $0.75 3/27/2018 Full Tilt Capital Morgan Creek Capital Management, LLC Asset Manag4ement and Custody Banks NA 3/26/2018 M III Acquisition Corp. IEA Energy Services LLC (nka:infrastructure and Asset Manag4ement and Custody Banks NA 3/22/2018 Thomson Financial Management, Inc. Bloomfield Hills Financial, Inc. Asset Manag4ement and Custody Banks NA 3/22/2018 Cortland Capital Market Services LLC Alter Domus S.à.r.l. Asset Manag4ement and Custody Banks NA 3/20/2018 Random Forest Capital LLC. Franklin Resources, Inc. Asset Manag4ement and Custody Banks NA 3/19/2018 WestMountain Company CytoBioScience, Inc. Asset Manag4ement and Custody Banks NA 3/5/2018 Kennard Wealth Management Group Golba Financial Group (nka:stonepath Wealth Asset Manag4ement and Custody Banks NA 3/2/2018 Healthbox, LLC Healthcare Information & Management Systems Asset Manag4ement and Custody Banks NA 2/22/2018 Forum Merger Corporation ConvergeOne, Inc. (nka:convergeone Holdings, Asset Manag4ement and Custody Banks NA 2/21/2018 Municipal Financial Consultants Inc. Taylor & Morgan, CPA, PC Asset Manag4ement and Custody Banks NA 2/16/2018 Chancery Advisory Concepts Virginia Asset Management LLC Asset Manag4ement and Custody Banks NA 2/13/2018 GFS Private Wealth LLC Mercer Advisors Inc. Asset Manag4ement and Custody Banks NA 2/12/2018 NextGen Venture Partners Brown Advisory, LLC Asset Manag4ement and Custody Banks NA 2/9/2018 Millie Capital Management LLC EP Wealth Advisors, Inc. Asset Manag4ement and Custody Banks NA 2/8/2018 Creekside Investment Management, Inc. N/A Asset Manag4ement and Custody Banks NA 2/6/2018 JM Global Holding Company China Sunlong Environmental Technology Inc. Asset Manag4ement and Custody Banks NA 2/2/2018 EverWest Real Estate Partners GWL Realty Advisors, Inc. Asset Manag4ement and Custody Banks NA 2/2/2018 Global Partner Acquisition Corp. Purple Innovation, LLC (nka:purple Innovation, Asset Manag4ement and Custody Banks NA 2/1/2018 Marquette Asset Management, LLC N/A Asset Manag4ement and Custody Banks NA 1/31/2018 Wealth Management Division of Calfee Financial Advisors, Inc. MAI Capital Management, LLC Asset Manag4ement and Custody Banks NA 1/31/2018 Tortoise Investments, LLC. AlpInvest Partners B.V.; HarbourVest Partners, Asset Manag4ement and Custody Banks NA 1/30/2018 Riverside Capital, LLC Berkadia Commercial Mortgage LLC Asset Manag4ement and Custody Banks NA 1/23/2018 Watts Capital Partners, LLC Karbone Inc. Asset Manag4ement and Custody Banks NA 1/16/2018 Assets of Wagner Wealth Management, LLC Private Capital Management LLC Asset Manag4ement and Custody Banks NA 1/16/2018 HPM Partners LLC Lightyear Capital LLC Asset Manag4ement and Custody Banks NA 1/9/2018 Pinnacle Investment Management, Inc. Mercer Advisors Inc. Asset Manag4ement and Custody Banks NA 1/9/2018 Murray & Co. Asset Management, Ltd. Mercer Advisors Inc. Asset Manag4ement and Custody Banks NA 1/9/2018 Alumcreek Holdings LLC Clarion Partners, LLC Asset Manag4ement and Custody Banks NA 1/9/2018 R. Applegate & Associates, LLC And The Paul Abendroth Group D.B. Root & Company, Inc. Asset Manag4ement and Custody Banks NA 1/8/2018 Bridgewater Wealth Management LLC And Blue Water Advisors, The Colony Group, LLC Asset Manag4ement and Custody Banks NA 1/2/2018 The Financial Group, Inc. N/A Asset Manag4ement and Custody Banks NA 1/2/2018 CenterSquare Investment Management Holdings, Inc. Lovell Minnick Partners, LLC Asset Manag4ement and Custody Banks NA 1/1/2018 Jannsen Wealth Management, Inc. (nka:r&r Wealth Management N/A Asset Manag4ement and Custody Banks NA 12/31/2017 Triad L.C. Signature Financial Management, Inc. Asset Manag4ement and Custody Banks NA 12/29/2017 Apollo Aviation Group, LLC N/A Asset Manag4ement and Custody Banks NA 12/27/2017 The TCW Group, Inc. The Carlyle Group L.P.; Nippon Life Insurance Asset Manag4ement and Custody Banks NA 12/22/2017 Midwest Investment Management LLC Carnegie Investment Counsel Asset Manag4ement and Custody Banks NA 12/21/2017 Boulevard Acquisition Corp. II Estre Ambiental S.A. (nka:estre Ambiental, Inc.) Asset Manag4ement and Custody Banks NA 12/19/2017 GMO Renewable Resources, LLC The Rohatyn Group, LLC Asset Manag4ement and Custody Banks NA 12/15/2017 Blue Clay Capital Management, LLC Air T, Inc. Asset Manag4ement and Custody Banks NA 12/14/2017 Deutsche Asset Management Inc., US Private Equity Access Fund Institutional Capital Network, Inc. Asset Manag4ement and Custody Banks NA Source: Capital IQ Houlihan Capital 5

6 S&P Capital IQ - Sector Last 3 Month Equity Performance 25.0% Change in Market Cap by S&P Capital IQ Sector 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% 12/31/2017 1/31/2018 2/28/2018 3/31/2018 Energy Materials Industrials Consumer Discretionary Healthcare Financials Information Technology Telecommunication Services Utilities Consumer Staples Note: The indices are derived from the equity performance of the S&P Capital IQ Sectors. Source: Capital IQ Houlihan Capital 6

7 M&A Deal Flow Statistics by S&P Capital IQ Sector 16,000 M&A Deal Count - Number of Transactions 14,000 12,000 10,000 8,000 6,000 7,176 7,735 7,544 8,953 7,561 8,024 8,265 8,970 7,120 6,788 6,011 6,954 6,702 5,967 5,258 6,410 5,471 4,000 2,000 4,647 4,989 5,391 5,700 5,147 5,062 5,134 5,244 4,543 4,297 4,033 4,197 4,316 3,697 3,347 3,788 3,667 0 $1,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q M&A Deals - USA & Canada M&A Deals - Rest of the World M&A Deal Count - Total Transaction Value ($ Billions) $900 $800 $700 $600 $500 $400 $321.9 $372.8 $381.4 $462.7 $430.2 $512.6 $406.6 $440.3 $419.0 $268.0 $295.1 $445.7 $364.7 $336.2 $292.0 $335.7 $272.3 $300 $200 $100 $400.7 $251.0 $289.7 $450.7 $402.3 $385.2 $499.4 $408.0 $403.0 $375.6 $293.7 $363.7 $363.7 $338.9 $414.0 $346.2 $292.1 $0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Transaction Value - USA & Canada Transaction Value - Rest of World Houlihan Capital 7

8 M&A Deal Flow Statistics by S&P Capital IQ Sector Percentage Dollars Invested by Sector 1Q18 1% 10% 3% 12% Consumer Discretionary Consumer Staples 7% Energy Financials Healthcare 16% 11% Industrials Information Technology Materials 7% 4% Real Estate Telecommunications Services 11% 8% 10% Utilities Not Listed Houlihan Capital 8

9 About Houlihan Capital Houlihan Capital is a leading, solutions-driven valuation, financial advisory and boutique investment banking firm. We pride ourselves on being thought leaders in an ever-changing landscape. Houlihan Capital is SOC-compliant, a FINRA and SIPC member and committed to the highest levels of professional ethics and standards. Valuation & Financial Advisory We provide an array of services that include enterprise valuations, portfolio valuation, valuation of carried interest, transaction opinions, tax and financial reporting compliance, purchase price allocations, and a wide variety of consulting services through our Financial Advisory Group. Investment Banking Through our Investment Banking Group, we offer sell side/buy side advisory and capital raises. Through our Special Situations desk, we provide services that fit outside the archetypal verticals, including liquidity solutions, transactional advisory, and secondary market advisory and trading. Litigation Support Our team provides support for a wide variety of situations including commercial and shareholder disputes, derivatives and structured finance litigation, and fraudulent conveyance. For additional information about our Industry expertise and services, visit: Andrew Smith Paul Clark Michael Norton pclark@houlihancapital.com asmith@houlihancapital.com mnorton@houlihancapital.com