Managed Accounts Holdings Limited (ASX: MGP) Broker Presentation

Transcription

1 Managed Accounts Holdings Limited (ASX: MGP) Broker Presentation

2 MGP Board and Management MGP Board Extensive experience in start-up businesses within financial services Directors were co-founders of Bridges Financial Services Pty Ltd and IWL Limited (both start-ups) and sold for in excess of $500M MGP Directors Don Sharp Executive Chairman Colin Scully Non Executive Director Paul Collins Non Executive Director MGP Management Team Experienced executive team with in excess of 5 years employment with MGP David Heather CEO with over 12 years experience in designing, implementing and distributing managed account solutions Neil Pattinson Head of Operations and Adviser Services Sanja Jovicic Head of Information Technology Paul La Macchia Marketing and Business Development Manager Rachel Li Head Accountant

3 What role does MGP play in market? One of the largest MDA Service Providers in Australia with over $900M in FUM as at 31 December 2013 MGP facilitates Licensees in running discretionary Portfolios for their clients No requirement to undertake personal advice (an SoA/RoA) for every change or to the client s Portfolio and every corporate event

4 MGP Clients and their role MGP has 21 medium sized high quality licensees using its Service and growing Licensee provides personal advice to clients to invest in the MDA and MGP appoints Licensees to manage client Portfolios in accordance with an agreed mandate published in an Investment Options Document. Licensee can appoint external Investment Managers Portfolios consist of listed securities (including ETFs, LICs, hybrids), managed funds, corporate bonds, term deposits, cash through any issuer Average client balance in MDA Service is over $700K as at 31 December 2013 Licensees or their appointed Investment Manager undertake all dealing utilizing the institutional grade portfolio management and modeling software Listed Securities orders placed via broker of choice => electronic confirmation of orders uploaded to clients Portfolios and matched to order Post trade compliance undertaken to ensure Portfolio is in accordance with mandate (Investment Options Document)

5 MDA Capital Requirements and ASIC CP200 Investment Administration Services Pty Ltd trading as managedaccounts.com.au is a wholly owned subsidiary of MGP Holds an AFSL license endorsed to operate Managed Discretionary Accounts (MDA s) License requires surplus current assets less current liabilities of $50K increasing to $150K on 1 July 2014 ASIC CP 200 review recommending an increase up to $5M ASIC have highlighted over 160 AFSL s will be effected by the new capital requirements Provides significant scope for MGP to be a consolidator of MDA Operators

6 MDA Capital Requirements and ASIC CP200 CP200 also recommends revoking ASIC s no-action letter (aka Limited MDA) where licensees can operate a quasi-style MDA via a Platform with no MDA license MGP estimates $billions of dollars relying on the no action letter (Limited MDA) concept ASIC final view on CP200 is on hold until it can take into consideration the Future of Financial Advice (FOFA) legislation changes and the outcomes of the Financial Services Industry (FSI) review ASIC made it clear that it remains committed to considering and implementing the proposed changes

7 How does MGP work with Licensees and their clients Licensee consults with managedaccounts.com.au to formulate a range of Portfolios that suit their client base e.g SMSF, accumulation or pension clients Portfolios are set out in the Investment Options Document including investment rules e.g only allow ASX200 securities in Portfolio within a maximum % exposure Licensees must have an Investment Committee (with one independent member) to oversee the Process and Portfolios Investment rules are compared to the actual client Portfolio to ensure client Portfolio is in accordance with Investment Options document Investment Committee allowed to change client Portfolios in quick-time without the need for client approval due to discretionary nature of Service

8 How does MGP work with Licensees and their Licensees Clients clients.continued Are advised at initial stage to invest into the Licensees MDA Service via a Statement of Advice (SoA) Client signs off on application form for the MDA and Custody contract with managedaccounts.com.au Cash and/or assets are transferred into MDA Investment Manager invests in accordance with rules of the model portfolios Client has online access for reporting Data feed capabilities into nominated SMSF or Planning software End of year tax reporting SMSF clients and auditor receive GS007 audit report from auditors of managedaccounts.com.au

9 How does MGP work with Licensees and their Clients.continued

10 Benefits for SMSF s Typically SMSFs currently have one pool of assets for all its members Members over 60 are able to commence pensions which are tax free with income and capital also tax free. They also enjoy the benefits of franking credits as tax refunds Members could also continue to work and contribute into the SMSF via an accumulation account managedaccounts.com.au supports multiple accounts and allows securities to be traded once and allocated across selected member accounts => encouraging other family members to have accounts which can be invested differently to other members Data feeds into SMSF accounting systems is available Provision of Audit Certificate GS007 also which SMSF auditors could rely upon Provision of end of year tax reporting

11 Benefits for SMSF s continued Could reduce accounting cost for an SMSF with value of $1M from typically $4k to potentially a few hundred dollars for accounting and audit Saving will more than pay for MGP administration fee of 0.25% capped at $2.5m then 0.05% thereafter Further savings in GST apply due to binding ATO ruling providing reduction of 50% to GST

12 MGP Growing Client base MGP has 21 medium sized high quality licensees using its Service and this is growing Sit in two camps: Licensees that have successfully transitioned existing clients from Platform arrangements and other Administration Services (internal/external) into the MDA Service. As a result, some of these licensees now becoming acquisitive as a result of the MDA benefits Licensees that are in the transition process and moving monies into the MDA Service Continue to use the MDA Service as core value proposition of the business for new clients (ie MDA Service is the solution presented to the investor)

13 MGP Growing Client base Recently implemented new deals with licensees are now in process of transitioning existing client base to the MDA Redgum Wealth => in excess of $200M Affinity Wealth => in excess of $180M GPS Wealth => in excess of $650M Will surpass the $1B FUA easily Breakdown of planner by number of planners: 17,500 in Australia (Source: Investment Trends) Bank/branch : 12% Own AFSL: 14% (our Tier 1 Target market) Independent Groups: 31% Aligned: 43% With total Planning FUA in Australia currently at $519bn (Source: Rainmaker) addressable market is ~$72.7bn for MGP

14 Financials Dividend yield of 4% unfranked payable quarterly commencing after September 2014 quarter Healthy balance sheet with over $8.4M in Cash (assuming maximum subscription) Forecast NPBT of $1.067M YE June 2015 with June 2015 annualized of $1.670M All IT costs written off (expensed in excess of $4.7M since 2008) Majority of fee income debited monthly to clients Accounts Licensees paid monthly once funds received from clients Working Capital only need one month of operating costs. Increased FUA requires little further working capital

15 Financials.continued No planned capital raising required as cash held will exceed the proposed $5M required by ASIC s CP200 (timing unknown) FUA fee of 0.25% up to $2.5m then 0.05% plus transaction fee of 0.09% Other income nearly covers direct costs of HSBC custody, SS&C etc No back end IT development costs as this is outsourced to North American provider SS&C (NASDAQ listed) who have 6900 financial services organisations (including managedaccounts.com.au), with over $26 trillion in assets being managed

16 Offer and Indicative Timetable

17 Disclaimer Managed Accounts Holdings Limited Disclaimer An electronic form of the Prospectus in relation to Managed Accounts Holdings Limited (Managed Accounts) is available from the managedaccounts.com.au site (Prospectus). This Prospectus is dated 21 March 2014, and a copy of this Prospectus was lodged with the Australian Securities and Investments Commission (ASIC) on that day. The terms and conditions of accessing the electronic Prospectus are set out below. Neither ASIC nor ASX takes any responsibility for the contents of this Prospectus. By law, the Prospectus is subject to an exposure period. The exposure period is intended to enable the Prospectus to be examined by market participants prior to the raising of funds. No applications will accepted by Managed Accounts during the exposure period. Applications for shares in Managed Accounts can only be made after the exposure period expires and on the form of application accompanying a paper version of the Prospectus. Until the exposure period expires, Managed Accounts will not aspect any applications for shares. When the offer period opens, application for shares in Managed Accounts will only be accepted if it is made on the application form issued with the Prospectus and in accordance guidelines in the Prospectus. No securities will be allotted or issued on the basis of this Prospectus later than 13 months after the date of the Prospectus. Please note that paper copies of the Prospectus are available free of charge by calling Novus Capital Limited on The information on this page is not part of the Prospectus. Prospective investors should read the full text of this Prospectus, as the information contained in individual sections is not intended to and does not provide a comprehensive review of the business and the financial affairs of Managed Accounts or the shares offered under this Prospectus. Managed Accounts is not liable for any loss incurred from relying on this site, including from data corruption on download. This Prospectus is available to persons receiving it within Australia. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer. Persons who come into possession of this Prospectus should seek advice on and observe any restrictions on accepting an offer or distributing the Prospectus. Any failure to comply with restrictions may constitute a violation of applicable securities laws. This Prospectus is in Adobe Acrobat format, and the download time may vary as a result of modem speed and Internet congestion. The length of the document is 80 pages. Should the document finish downloading to your browser, and not be this length, you should refresh the browser window using the Reload or Refresh feature, and reload the document. If you are experiencing problems downloading the Prospectus, please call Novus Capital Limited on