Asset Management Industry

Transcription

1 z Industry Observations June 30, 2018 Asset Management Industry

2 Select Asset Management Public Company Industry Data (USD in millions, except per share data) Price at 06/30/18 % 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 $ % $6, $ % $247, $2, $ $2, $ Artisan Partners Asset Management Inc. APAM $ % $1, $1, % $114, $ $71.08 $ $ Eaton Vance Corp. EV $ % $6, $5, % $440, $1, $ $1, $ Federated Investors, Inc. FII $ % $2, $2, % $392, $1, $ $1, $ GAMCO Investors, Inc. GBL $ % $ $ % $40, $ $80.25 $0.00 $0.00 Janus Henderson Group plc JHG $ % $5, $5, % $371, $2, $ $2, $ Legg Mason, Inc. LM $ % $2, $4, % $754, $3, $ $3, $ Waddell & Reed Financial, Inc. WDR $ % $1, $ % $80, $1, $ $1, $ Alternative Asset Management Market Data LTM Operating Data Forward Estimates Ares Management, L.P. ARES $ % $2, $8, % $112, $1, $ $1, $ Oaktree Capital Group, LLC OAK $ % $2, $8, % $121, $1, $ $1, $ Och-Ziff Capital Management Group LLC OZM $ % $ $1, % $32, $ $28.88 $ $82.20 Virtus Investment Partners, Inc. VRTS $ % $ $2, % $89, $ $47.29 $ $89.35 Private Equity/ Venture Capital BlackRock Capital Investment Corporation BKCC $ % $ $ % $0.00 $93.24 $5.66 $91.40 $53.25 Capital Southwest Corporation CSWC $ % $ $ % $0.00 $35.13 $39.31 $42.84 $19.50 Hercules Capital, Inc. HTGC $ % $1, $1, % $0.00 $ $90.53 $ $ Main Street Capital Corporation MAIN $ % $2, $3, % $0.00 $ $ $ $ Prospect Capital Corporation PSEC $ % $2, $4, % $0.00 $ $ $ $ The Carlyle Group L.P. CG $ % $2, $9, % $201, $3, $ $2, $ Triangle Capital Corporation TCAP $ % $ $ % $0.00 $ $21.37 $80.39 $39.00 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 14.8% 37.3% 0.0% -17.8% -26.7% 20.9% 0.0x 0.0x 25.5x Artisan Partners Asset Management Inc. APAM 18.7% 112.0% 53.5% 12.8% -7.2% 8.6% 2.1x 2.0x 5.4x Eaton Vance Corp. EV 14.2% 28.9% 16.6% 15.3% 24.3% 19.8% 3.6x 3.4x 21.2x Federated Investors, Inc. FII 18.1% 41.3% 23.6% -4.5% 41.7% 27.6% 2.0x 1.9x 10.6x GAMCO Investors, Inc. GBL 61.3% N/A 237.3% 1.3% -30.8% 22.2% 2.2x N/A 9.5x Janus Henderson Group plc JHG 0.0% 22.3% 11.9% 114.7% 325.9% 37.1% 2.5x 2.3x 12.7x Legg Mason, Inc. LM 4.0% 7.3% 4.7% 8.8% 25.4% 9.1% 1.6x 1.6x 13.2x Waddell & Reed Financial, Inc. WDR 11.7% 17.7% 15.2% -2.8% 0.1% 13.2% 0.7x 0.7x 9.4x Mean 17.9% 38.1% 45.4% 16.0% 44.1% 19.8% 1.8x 1.7x 13.4x Median 14.5% 28.9% 15.9% 5.0% 12.2% 20.3% 2.0x 1.9x 11.6x Alternative Asset Management Ares Management, L.P. ARES 2.0% 29.4% 2.3% 9.9% 114.5% 11.0% 5.7x 6.4x NM Oaktree Capital Group, LLC OAK 3.1% 25.1% 3.6% 30.7% 3.5% 15.1% 5.6x 5.8x 32.9x Och-Ziff Capital Management Group LLC OZM 11.5% 49.8% 19.6% 17.4% N/A 3.4% 1.6x 1.9x 3.1x Virtus Investment Partners, Inc. VRTS 3.4% 8.2% 3.7% 47.5% -3.8% 10.0% 5.4x 4.8x 15.6x Mean 5.0% 28.1% 7.3% 26.4% 38.1% 9.9% 4.6x 4.7x 17.2x Median 3.3% 27.3% 3.7% 24.0% 3.5% 10.5% 5.5x 5.3x 15.6x Private Equity/Venture Capital BlackRock Capital Investment Corporation BKCC 4.7% 1.0% 4.8% -17.1% N/A 6.1% 7.9x 8.0x 13.3x Capital Southwest Corporation CSWC 3.7% 13.2% 3.8% 49.6% 67.4% 111.9% 11.0x 9.0x 27.6x Hercules Capital, Inc. HTGC 5.6% 11.1% 5.7% 5.9% 85.4% 46.9% 9.7x 9.3x 16.9x Main Street Capital Corporation MAIN 5.0% 13.2% 5.1% 16.1% 13.1% 81.2% 14.9x 13.7x 24.9x Prospect Capital Corporation PSEC 4.6% 7.0% 4.7% -10.6% -20.3% 36.4% 7.2x 7.4x 13.8x The Carlyle Group L.P. CG 5.1% 33.3% 7.5% 11.9% 147.9% 6.2% 2.9x 3.2x NM Triangle Capital Corporation TCAP 5.0% -3.1% 5.0% 1.4% N/A -18.0% 7.5x 11.1x 13.3x Mean 4.8% 10.8% 5.2% 8.2% 58.7% 38.7% 8.7x 8.8x 18.3x Median 5.0% 11.1% 5.0% 5.9% 67.4% 36.4% 7.9x 9.0x 15.4x 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 30.00% 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 June 30, 2017 to June 30, 2018 (USD in millions) Close Date Target Acquirer Target Company Primary Industry Implied Equity Value 4/6/2018 Accretive Asset Management and Guggenheim Specialized Invesco Ltd. Asset Management and Custody Banks $1, /9/2018 Trust Company of America Inc. E*TRADE Savings Bank Asset Management and Custody Banks $ /18/2018 ZAIS Group Holdings, Inc. N/A Asset Management and Custody Banks $ /17/2018 Anchor Capital Advisors, LLC Lincoln Peak Capital Management, LLC Asset Management and Custody Banks $ /12/2018 JCR Capital Walker & Dunlop, Inc. Asset Management and Custody Banks $ /6/2018 Fixed Income & Equity Business of Columbia Partners, L.L.C. Tristate Capital Holdings, Inc. Asset Management and Custody Banks $1.20 4/23/2018 Notes Incorporation N/A Asset Management and Custody Banks $0.33 5/18/2018 Big Time Holdings, Inc. Palewater Global Management Inc. Asset Management and Custody Banks $0.03 6/29/2018 All Assets of Access-Power Cuba, Inc. Access Power, Inc. Asset Management and Custody Banks NA 6/27/2018 B4MC Gold Mines, Inc., Prior to Reverse Merger with RocketFuel B4MC Gold Mines, Inc. Asset Management and Custody Banks NA 6/19/2018 Altegris Advisors, LLC Artivest Holdings, Inc. Asset Management and Custody Banks NA 6/22/2018 Dicentra Pension Services, LLC Arthur J. Gallagher & Co. Asset Management and Custody Banks NA 6/29/2018 Alerian Capital Management, LLC Aretex Capital Partners; Aretex Capital Partners Asset Management and Custody Banks NA 6/13/2018 Cimino & Associates, Inc. Wealth Enhancement Group, LLC Asset Management and Custody Banks NA 6/11/2018 Spectrum Financial Group Red River Wealth Strategies, LLC Asset Management and Custody Banks NA 6/5/2018 Capview Partners LLC EB Arrow Asset Management and Custody Banks NA 6/1/2018 CACEIS (USA) Inc. and Caceis Canada Ltd SS&C Technologies Holdings, Inc. Asset Management and Custody Banks NA 5/14/2018 American Retail Group, Inc., Prior to Reverse Merger with Simex, American Retail Group, Inc. Asset Management and Custody Banks NA 5/14/2018 Nettie Becker Escrow, Inc. Glen Oaks Escrow, Inc. Asset Management and Custody Banks NA 5/4/2018 Anutra Corporation Prior to Merger with Anutra Super Grain LLC Anutra Corporation Asset Management and Custody Banks NA 5/3/2018 Meritage Capital, LLC Brown Advisory Incorporated Asset Management and Custody Banks NA 5/4/2018 Certain assets of Alpine Woods Capital Investors, LLC Aberdeen Asset Managers Limited Asset Management and Custody Banks NA 5/2/2018 ClearPoint Financial, Inc. Arthur J. Gallagher & Co. Asset Management and Custody Banks NA 5/30/2018 Donnelly Wealth Advisors Inc. EP Wealth Advisors, Inc. Asset Management and Custody Banks NA 5/1/2018 S2K Financial Holdings LLC NorthStar Securities, LLC Asset Management and Custody Banks NA 5/2/2018 Denver Investments Segall Bryant & Hamill, LLC Asset Management and Custody Banks NA 4/27/2018 ETF Securities USA LLC Aberdeen Standard Investments Asset Management and Custody Banks NA 5/15/2018 Venture Strategy Partners Venture Smarter Asset Management and Custody Banks NA 4/26/2018 Tippett Moorhead Financial Partners, LLC Alera Group, Inc. Asset Management and Custody Banks NA 4/9/2018 Atlantic Acquisition Inc. Monster Inc. and 97.15% stake in Monster LLC Asset Management and Custody Banks NA 4/7/2018 AllyMe Holding Inc. N/A Asset Management and Custody Banks NA 4/6/2018 National Art Exchange, Inc. Superior Treasure Global Limited Asset Management and Custody Banks NA 4/5/2018 Devon Financial Partners, LLC First Financial Group, Inc. Asset Management and Custody Banks NA 4/3/2018 Substantially All Assets of InR Advisory Services, LLC CBIZ, Inc. Asset Management and Custody Banks NA 4/1/2018 Dixon, Hubard, Feinour, & Brown, Inc. Union Bank & Trust Asset Management and Custody Banks NA 3/31/2018 Polycomp Trust Company Ascensus, LLC. Asset Management and Custody Banks NA 3/27/2018 Full Tilt Capital Morgan Creek Capital Management, LLC Asset Management and Custody Banks NA 3/26/2018 M III Acquisition Corp. IEA Energy Services LLC (nka:infrastructure and Asset Management and Custody Banks NA 3/22/2018 Thomson Financial Management, Inc. Bloomfield Hills Financial, Inc. Asset Management and Custody Banks NA 3/22/2018 Cortland Capital Market Services LLC Alter Domus S.à.r.l. Asset Management and Custody Banks NA 3/20/2018 Random Forest Capital LLC. Franklin Resources, Inc. Asset Management and Custody Banks NA 3/19/2018 WestMountain Company WestMountain Company Asset Management and Custody Banks NA 3/5/2018 Kennard Wealth Management Group Golba Financial Group (nka:stonepath Wealth Asset Management and Custody Banks NA 3/2/2018 Healthbox, LLC Healthcare Information & Management Systems Asset Management and Custody Banks NA 2/22/2018 Forum Merger Corporation ConvergeOne, Inc. (nka:convergeone Holdings, Asset Management and Custody Banks NA 2/21/2018 Municipal Financial Consultants Inc. Taylor & Morgan, CPA, PC Asset Management and Custody Banks NA 2/16/2018 Chancery Advisory Concepts Virginia Asset Management LLC Asset Management and Custody Banks NA 2/13/2018 GFS Private Wealth LLC Mercer Advisors Inc. Asset Management and Custody Banks NA 2/12/2018 NextGen Venture Partners Brown Advisory, LLC Asset Management and Custody Banks NA 2/9/2018 Millie Capital Management LLC EP Wealth Advisors, Inc. Asset Management and Custody Banks NA 2/8/2018 Creekside Investment Management, Inc. N/A Asset Management and Custody Banks NA 2/7/2018 WR Ramsey & Associates Inc. N/A Asset Management and Custody Banks NA 2/6/2018 JM Global Holding Company China Sunlong Environmental Technology Inc. Asset Management and Custody Banks NA 2/2/2018 EverWest Real Estate Partners GWL Realty Advisors, Inc. Asset Management and Custody Banks NA 2/2/2018 Global Partner Acquisition Corp. Purple Innovation, LLC (nka:purple Innovation, Asset Management and Custody Banks NA Source: Capital IQ Houlihan Capital 5

6 S&P Capital IQ - Sector Last 3 Month Equity Performance 20.0% Change in Market Cap by S&P Capital IQ Sector 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% 3/31/2018 4/30/2018 5/31/2018 6/30/2018 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 7,735 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 5,064 4,000 2,000 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 3, Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q M&A Deals - USA & Canada M&A Deals - Rest of the World $1,000 M&A Deal Count - Total Transaction Value ($ Billions) $900 $800 $700 $600 $500 $400 $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 $353.3 $300 $200 $100 $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 $442.5 $0 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 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 2Q18 13% 2% 12% 10% 5% 9% 13% 19% 4% 4% 4% 5% Consumer Discretionary Consumer Staples Energy Financials Healthcare Industrials Information Technology Materials Real Estate Telecommunications Services Utilities Not Listed Houlihan Capital 8

9 About Us 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 asmith@houlihancapital.com Paul Clark pclark@houlihancapital.com Michael Norton mnorton@houlihancapital.com Monica Blocker mblocker@houlihancapital.com