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Acquire Create Grow - PowerPoint PPT Presentation


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

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disclaimer
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.

slide3

Acquire

Create

Grow

Financial services companies in two segments

Wealth Management

Asset Managers

the jovian advantage
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
key to our strategy
Key to our Strategy

Acquire

Create

Grow

Value Creation

value creation
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
value creation horizons etf businesses
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
value realization horizons etf businesses
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
value creation mgi financial
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
value realization mgi financial
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
strategy realized
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
going forward
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
current portfolio of companies
Current Portfolio of Companies

Asset Managers

T.E. Wealth

Leon Frazer &Associates

Wealth Management

Hahn Investment Stewards

MGI Securities

slide14

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
slide15

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
slide16

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)
slide17

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
fiscal 2011 financial highlights
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
slide19

Revenue by Classification

Total Revenue by Classification

For the years ended March 31 ($ in thousands)

slide20

Revenue by Segment

Total Revenue by Segment

For the years ended March 31 ($in thousands)

slide21

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

summary
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