Business operations and strategy briefing

Transcription

1 Business operations and strategy briefing Institutional shareholders and analysts 7 December 2006

2 David Deverall Chief Executive Officer and Managing Director 1

3 Schedule 10:00 David Deverall Chief Executive Officer and Managing Director Asset Management 10:10 Emilio Gonzalez Chief Investment Officer 10:25 Michael Korber Head of Credit and Fixed Income Des Sullivan/ John Nolan Chief Investment Officers PIIML (pre-recorded) 10:50 Gerard Doherty Group Executive Wealth Management (PIIML) Questions Wealth Management including Perpetual Private Clients 11:15 Gerard Doherty Group Executive Wealth Management (PI/PPC) 11:25 Scott Riedel Head of Perpetual Private Clients Questions Corporate Trust Phil Vernon Group Executive Corporate Trust 11:55 Chris Green Head of Debt Markets 12:05 Phil Yardy Head of Mortgage Services 12:15 Questions 12:25 David Deverall Chief Executive Officer and Managing Director 2

4 Overview of event Purpose Create depth and breadth of understanding from an operational, strategic, environmental and team dynamic perspective Increase flow of information and engagement with shareholders/analysts outside reporting season Provide more insight into revenue building strategic initiatives Purpose of event is not to provide a detailed financial analysis of the business or an update on the forecast provided at the AGM in October Opportunity to meet Perpetual group executives/business unit leaders Overview of schedule Three sets of business presentations followed by dedicated Question sessions - Asset Management - Wealth Management - Corporate Trust Disclosure Live webcast All material will be disclosed to the ASX Ten minutes for Questions at end of each session 3

5 Emilio Gonzalez Chief Investment Officer 4

6 Overview Asset Management Chief Investment Officer Australian equities Global equities Quantitative investments Credit and fixed income Mortgages Property Multi manager Balanced funds John Sevior Matt Williams John Nolan Des Sullivan Vasant Khilnani Michael Korber Marion Kraemer Sean Murray Damien Webb Richard Brandweiner Investment Administration Mark De Courcey Business Solutions Phil Barton 5

7 Research and Development Expanding New Extending Cross-utilisation skills sets capabilities our asset of services skills footprint management footprint Asset Management Current R&D Skill set High breadth Low breadth Domestic stock picking Mortgage lending LPT stock picking Infrastructure investing Quantitative investing Credit investing Global stock picking Direct property investing Broad Broad Styles Mortgages Domestic long only Styles Small Caps Mezz Debt Domestic Hedge Funds Hedge Funds Hedge Funds Direct Property Domestic Domestic Hybrids/ Structured TAA Expand universe for domestic investment portfolio Diversified Income Fund Multi Strategy Development 6

8 Michael Korber Head of Credit and Fixed Income 7

9 Australia s growing credit market Credit and Fixed Income Australian Debt Securities Outstanding A$ bil Non-government, non-financial Financial Institutions 100 Commonwealth and State Government * Source: Reserve Bank of Australia Bulletin Table D4 8

10 Product landscape More risk/return Liquidity - structure term Credit and Fixed Income Treasury style Income style AA Exact Cash Fund Credit Enhanced Cash Structured Income Fund (Oct 06) More risk/ return Credit default A Credit Enhanced Cash Credit Income Fund Active Bond Fund Unrated Diversified Income Fund (Oct 05) 9

11 Credit and Fixed Income Exact Cash Fund SIF, CIF, DIF CEC, CEC(AA) Oct-06 Sep-06 Growth in new products 4,000 3,500 3,000 2,500 2,000 1,500 1, Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug Exact Income Treasury FUM ($)m

12 Des Sullivan/John Nolan Chief Investment Officers PI Investment Management 11

13 Gerard Doherty Group Executive - Wealth Management 12

14 Global equities business strategy Domestic and global clients PIIML Business strategy includes: Manufacture a focused range of global equities products Distribute these products to: Retail and institutional investors in Australia Institutional investors outside of Australia Perpetual Limited Global clients London Australian clients PIIML Global equity manufacturer Institutional market sales Perpetual Global equity product packager Institutional, intermediated and retail clients 13

15 A strategic market for Perpetual Global equities particularly attractive in Australia Global Equities FUM ($AUD) $800B PIIML CAGR % Today +5 Years +10 Years Source Mercer Oliver Wyman Analysis 14

16 Strong one year performance Comparative performance in top quartile Relative Performance -v- MSCI World Index ($AUD) 2.0% 1.9% 12 month total return to Sept % - v- MSCI World Index +16.9% PIIML % 0.4% 0.7% % -4.0 Absolute Performance -3.7% Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q % 3.0% 9.3% 10.0% -4.3% 4.8% Source - Perpetual 15

17 Good coverage for International Fund PIIML Equities Products Masterfunds Master Trust Australian International Asgard AMP ANZ BT Wrap Colonial FirstChoice ING OneAnswer IOOF Portfolio Services Macquarie Wrap MasterKey Custom Navigator Questor (TPS) Skandia Summit Synergy Symetry Product approved 16

18 Questions 17

19 Perpetual Investments Perpetual Investments Continuing to realign investment to grow our newer asset classes Increasing capability to grow newer asset classes and business in Australia. Perpetual Investments (including global equities) Group Executive Wealth Management PIIML Perpetual Private Clients Marketing Chief Operating Officer Chief Financial Officer Actively reducing administration costs 18

20 Perpetual Investments Perpetual Investments Reshaping our cost base to grow our newer asset classes Expenses related to Perpetual Investments CAGR % of Total Expense Base CAGR 100% 80 Asset Management 44% 15% Sales and Marketing Admin and Support 17% 5%

21 Dedicated asset class specialists to drive growth Asset class specialist team Perpetual Investments Australian equities Global equities Income / Property / Infrastructure Quantitative investments / multi-sector Channels Australian shares Industrial Shares Australian Shares Concentrated Geared Ethical SRI Share-Plus Global equities Global shares Concentrated Income Credit Enhanced Cash Exact Market Cash Diversified Income Mortgages Mezzanine Debt Active Fixed Interest Property Property Securities Property Income Fund Direct Property Infrastructure Quant Investments QI TE1 / QI TE2 QI Long Short QI Market Neutral Multi-Sector Conservative Growth Diversified Growth Balanced Growth Split Growth Mutli-Manager Institutional Intermediated Direct 20

22 Perpetual Investments Price increases on Australian Equities funds to appropriately reflect value Perpetual Fund Current Headline Price New Headline Price FUM 1 31/10/06) Wholesale Industrial Fund Wholesale Australian Fund Wholesale Concentrated Equity Fund Wholesale Small Companies Fund Wholesale Balanced Growth Fund Note 1 Source: Morningstar. 21

23 Example: Wholesale Australian Share Fund Competitor wholesale funds Prime Value Growth Fund Orion Australian Share Fund CFS 452 Australian Share Fund Estimated MER (%) 1 3 year return quartile ranking NA BT Core Australian Share Fund ANZ Australian Share Fund AMP Equity Fund Class A CFS Australian Share Fund IML Australian Share Fund Perennial Value Share Fund Perpetual Australian Share Fund Schroder Australian Equity Fund Ausbil Australian Equity Fund Challenger Australian Share Fund ING Australian Share Fund Data source: 1. Van Eyk research (November 06) & various PDSs 2. MERCER (October 06) NA NA 5 year return quartile ranking 2 NA NA NA Perpetual Investments 22

24 Risk appropriately spread Our Top 10 clients represent ~23% of revenues Perpetual Investments % of Total % of Total Revenues 100% FY06 Revenue for Top 10 Clients 1.5% 1.5% 1.6% 1.7% 1.9% 2.0% 2.2% Total Revenue 2.6% 3.5% 4.7% 0 Total Revenues Revenues from Top 10 Clients 23

25 Core competency Relationships with financial planners Perpetual Investments Continuing to focus on servicing financial planners Perpetual was rated #2 overall in the 2006 Assirt Service Level survey Rated #1 in: Effectiveness of communications Brand image Product knowledge of BDM s Flexibility of organisation in meeting adviser needs Quality of communication about products, style and philosophy Quality of transaction and valuation reports sent to investors Effective communication of excessive over or under performance Leveraging this strong relationship going forward Grow our newer asset classes through quality products Grow other products through the financial planning community eg Structured Products Increase focus on the Independent Financial Planner (IFA) segment 24

26 Private Clients Transformation story Wealth Management Group Executive Wealth Management PIIML Perpetual Investments Perpetual Private Clients Marketing Chief Operating Officer Chief Financial Officer 25

27 Scott Riedel Head of Perpetual Private Clients 26

28 Our client offering Enduring Power of Attorney Superannuation Perpetual Private Clients Wills Wrap Executorial Services Our clients Master Trust Family / Hybrid Investment Minors Strategic Charitable Discretionary 27

29 Competitive assessment Perpetual Private Clients Business model Comprehensive Advice Range of products / services Fiduciary services Perpetual Private Clients h a h Independent financial advisers a r v Investment banks h h v Brokers r r v Trust companies v v h Private banks a h v Strong capabilities / competitive advantage Weakness / no capabilities 28

30 Team and service structure Perpetual Private Clients Specialists support team to provide best client outcomes Philanthropic Specialist Tax Manager Risk Specialist Our clients Client Management Team Consultant Adviser Administrator Trust Manager Estate Administrator Property Specialist Portfolio Manager Primary contact team Specialist support 29

31 Questions 30

32 Phil Vernon Group Executive Corporate Trust 31

33 Overview Perpetual Corporate Trust Group Executive Corporate Trust Debt Markets Chris Green Mortgage Services Phil Yardy Fund Services Glenn Foster Debt Markets and Mortgage Services contribute 75 per cent of Corporate Trust revenue Corporate Trust contributes 20 per cent of group revenue 32

34 Chris Green Head of Debt Markets 33

35 Perpetual Corporate Trust One-stop shop Across the post-approval mortgage value chain Client Source funding Credit assessment and approval Arrears management Mortgage Services Perpetual Debt Markets Mortgage preparation and settlement Postsettlement servicing Variations and discharge Document custody Trustee services Calculation agency and investor reporting Administration of securitisation trust obligations Managing bondholder distributions Special purpose vehicle administration Calculation agency Collation and reporting of securitisation data 34

36 Securitisation Services Key Differentiators Perpetual Corporate Trust Trustee Services Calculation agency and investor reporting Deep and long-lasting relationships Superior client service Brand Broad product set 35

37 The Australian securitisation market has good underlying fundamentals Perpetual Corporate Trust (CAGR %) Other asset backed securities Mortgage backed securities A$218B Jun 96 Jun 97 Jun 98 Jun 99 Jun 00 Jun 01 Jun 02 Jun 03 Jun 04 Jun 05 Jun 06 Supply is increasing Currently only 23 per cent of Australia s residential loans are securitised (as opposed to 60 per cent in the US, and Non-bank financial institutions, the largest users of securitised funding (~60 per cent of bonds issued), are gaining market share in residential lending To meet the increasing demand Offshore demand for Australian backed residential mortgages Source: Reserve Bank of Australia 36

38 Phil Yardy Head of Mortgage Services 37

39 Perpetual Corporate Trust One-stop shop Across the post-approval mortgage value chain Client Source funding Credit assessment and approval Arrears management Mortgage Services Perpetual Debt Markets Mortgage preparation and settlement Postsettlement servicing Variations and discharge Document custody Trustee services Calculation agency and investor reporting Preparation of legal mortgage documents First home owners grant agent Attendance at settlement of loan Ongoing servicing of customers Loan system maintenance Processing of changes to loan documents Processing discharges when borrower repays loan Storage and safe-guarding of mortgage documents 38

40 Questions 39

41 Business operations and strategy briefing Institutional shareholders and analysts 7 December 2006