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Acquire Create Grow

AGM Presentation, August 31, 2011. Acquire Create Grow. Disclaimer.

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Acquire Create Grow

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  1. AGM Presentation, August 31, 2011 Acquire Create Grow

  2. 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 forward-looking 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.

  3. Acquire Create Grow Financial services companies in two segments Wealth Management Asset Managers

  4. The Jovian Advantage Strategic Advice Capital Networks Scale Distribution Compliance/Legal • What we offer investee companies: • Proven track record of growing financial services companies • Opportunity to retain brand identity

  5. Key to our Strategy Acquire Create Grow Value Creation

  6. 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

  7. Value Creation: Horizons ETF businesses • Result: • 2011 EBITDA of $7.0 million • Leading edge player in leveraged and commodity ETF products • Actively managed ETFs • Equity investment in BetaShares in Australia • What we provided: • 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

  8. Value Realization: Horizons ETF businesses • Appropriate timing: • 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 • Attractive offer: • 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

  9. Value Creation: MGI Financial • Result: • $4 billion in assets under administration • Leader in providing group benefits to First Nations • Attractive strategic property for the right buyer • What we provided: • New management team • New business model • Introduction of corporate branch concept • Upgraded systems and processing • Expansion into Ontario

  10. Value Realization: MGI Financial • Appropriate timing: • 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 • Attractive offer: • Desjardins Financial Security to acquire MGI Financial and related companies for $27 million • Transaction expected to close Sep. 30 subject to customary conditions

  11. 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

  12. Going Forward Current portfolio of companies • 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

  13. Current Portfolio of Companies Asset Managers T.E. Wealth Leon Frazer &Associates Wealth Management Hahn Investment Stewards MGI Securities

  14. Established: 1939 Acquired: 2004 Client assets: $1.85 billion $0.7billion • Future growth plans: • Expand product offering • Access additional client channels • Tuck-in acquisitions • Raise company profile Client base: primarily HNW individuals, estates and trusts; also serve institutions, charitable foundations and pension plans • 70 years in business • Emphasis on investing in companies that grow their dividends • Manages mutual funds for IA Clarington and others

  15. Established: 1972 Acquired: 2003 Client assets: $2.3 billion $0.8billion • Future growth plans: • First Nations communities • Tuck-in acquisitions • Expand client solutions • Raise profile Client base: HNW individuals and institutions • 40 years in business • One of the largest private wealth advisors in Canada • Offers financial planning and educational services on fee-only basis

  16. Established: 2001 Acquired: July 2009 Client assets: $300million • Future growth plans: • U.S. distribution channels • Sub-advisory opportunities • Strengthen operational capacity • Raise profile $40million • 7 years young company • Leader in using ETFs to build diversified portfolios within global economy • Portfolios also offered through separately managed accounts (SMAs)

  17. Established: 2000 Acquired: November 2003 Client assets: $1.5billion • Strong revenue and EBITDA growth in 2011 • Future growth plans: • Expand investment banking footprint • Grow existing branches $0.15billion • 11 years in business • Professional wealth management solutions for institutional and individual investors • Focus on small caps which provide investment opportunities for clients

  18. 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

  19. Revenue by Classification Total Revenue by Classification For the years ended March 31 ($ in thousands)

  20. Revenue by Segment Total Revenue by Segment For the years ended March 31 ($in thousands)

  21. Client Assets Client Assets* As at March 31 ($ in billions) * Assets Under Administration prior to 2010 has been restated to reflect the sale of Felcom Data Services Inc. business line, completed Oct. 23, 2009

  22. 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

  23. AGM Presentation, August 31, 2011 Acquire Create Grow

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