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AXA Asia Pacific Holdings Limited

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No purchase price involved - fee retention for existing FUM ... FUM will be agreed at closing but current estimates of the financial effect of ... – PowerPoint PPT presentation

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Title: AXA Asia Pacific Holdings Limited


1
(No Transcript)
2
AXA Asia Pacific Holdings Limited Alliance
Capital Management L.P. Funds Management
Business Relationship
3
Les Owen Group Chief Executive AXA Asia
Pacific Holdings Limited
4
Agenda
  • Overview Les Owen
  • Strategic Rationale Les Owen
  • AXA Asia Pacific
  • Strategic Rationale Dave Williams
  • Alliance Capital
  • Alliance Capital Australia Michael Bargholz and
    New Zealand
  • Financial Effects Les Owen
  • Summary Les Owen

5
Overview
  • New asset management companies in Australia and
    New Zealand
  • Strong combination of AXA Asia Pacific and
    Alliance Capital core competencies
  • 50/50 partnership between AXA Asia Pacific and
    Alliance Capital
  • Operational management responsibility with
    Alliance Capital
  • AXA Australia and New Zealand responsible for
    retail product, marketing and distribution - AXA
    brand with assets managed by Alliance Capital

6
Overview
  • Alliance Capital Australia and New Zealand
    responsible for institutional markets - Alliance
    Capital brand
  • Highly regarded global asset management
    capabilities available in Australia and New
    Zealand - leveraging the power of AXAs global
    resources
  • Existing organisation and infrastructure of AXA
    Asia Pacific and Alliance Capital to form the
    basis of the new companies
  • No purchase price involved - fee retention for
    existing FUM
  • A true partnership - not out-sourcing

7
Strategic Rationale - AXA Asia Pacific
  • AXA Asia Pacific has lost market share in
    investment and superannuation in recent years
  • Improving investment management capability,
    perception and performance critical to the
    turnaround
  • Several Options considered
  • organic improvement
  • recruiting teams/key individuals
  • acquiring another asset management company
  • leveraging AXAs global capability

8
Strategic Rationale - AXA Asia Pacific
  • Option One - Organic Improvement
  • Strong in fixed interest
  • Good recent Australian equity performance - but
    perception lagging
  • International equities already managed by
    Alliance Capital/AXA IM
  • Difficult to adopt consistent style and process
    globally
  • Conclusion
  • Do-able, but would take time
  • Doesnt leverage global capability

9
Strategic Rationale - AXA Asia Pacific
  • Option Two - Acquiring teams/key individuals
  • Some progress over last 18 months
  • Perception still an issue
  • The right talent hard to get
  • Doesnt address issue of global capability
  • Conclusion
  • Would take time
  • Doesnt leverage global capability

10
Strategic Rationale - AXA Asia Pacific
  • Option Three - Acquiring asset management company
  • Few, if any, quality companies available
  • Very high prices for the right quality
  • Integration and people distractions
  • Conclusion
  • Why buy when lower cost and less disruptive
    option available
  • Doesnt leverage global capability

11
Strategic Rationale - AXA Asia Pacific
  • Option Four - Partnership brings world class
    capability, reputation and scale to AXA Asia
    Pacific business in Australia and New Zealand
  • Strengthened Australian asset management
    capability under Alliance Capital management,
    process and style
  • Ability to attract and retain the best fund
    managers in Australia and New Zealand
  • World class capability in US, Europe, Japan and
    Far East
  • Leverages AXA Group capability
  • Straight forward integration

12
Property and Commercial Mortgages
  • Property and Commercial Mortgage management will
    remain under the control of AXA Asia Pacific
  • First class management teams at AXA Asia Pacific
    with excellent track records
  • Continue to build expertise and offer highly
    rated products to our clients

13
Dave Williams Chairman Alliance Capital
Management L.P.
14
Alliance Capital Mission
To Be the PremierGlobal Investment Management
OrganizationThrough Superior PerformanceAcross
a Broad Range of Investment Disciplinesfor a
Diverse Group of Clients.
15
Alliance Capital At A Glance
US
  • Assets Under Management(1) 470 billion
  • Alliance Capital Mutual Funds 185 billion
  • Alliance Capital Institutional 203 billion
  • Bernstein 82 billion
  • Master Limited Partnership (Units)
  • NYSE AC
  • Current Price 46 7/16
  • Market Value (2) 11.6 billion
  • Close of Bernstein acquisition on 2 October 2000

(1) AUM represents combined Alliance Capital and
Bernstein as of 30/6/00 (2) Total value of
operating partnership is based on market price of
Alliance Holding units. Current price, market
value, and yield as of 16/10/00. Total Return
calculations as of 31/8/00. All other figures
as of 30/6//00
16
Alliance Capital - Ownership Structure
Alliance Capital and Alliance Holding Combined
Beneficial Ownership (1)
Public Unitholders
Unaffiliated
29
Alliance CapitalManagement Holding (NYSE AC)
General Partner andLimited Partners
53
18
30
70
Employees
AXAFinancial
Alliance Capital Management L.P.
AXA Financial ownership includes General
Partnership interests. All percentages are
approximate and based on close of Bernstein
transaction. (1) Preliminary estimates based on
close of Bernstein transaction.
17
Alliance Capital At A Glance(1)
  • Alliance Capital a global presence
  • Worldwide Investment Capabilities
  • 530 investment professionals
  • 250 investment research analysts
  • 4,000 Employees
  • 2,600 Institutional Clients
  • 15,000 Private Clients
  • 6.1 Million Shareholders
  • Recognized leader in the U.S. Institutional
    Market
  • Largest U.S. institutional manager of
    actively-managed U.S. Equity assets for pension
    and non-profit funds
  • Institutional leader in the growth style and
    value style

(1) As of 2 October 2000
18
Alliance Capital - Becoming Truly Global
Luxembourg
Moscow
Warsaw
London
Toronto
Vienna
Minneapolis
Paris
Munich
Madrid
Chicago
New York (2)
Istanbul
Seoul
San Francisco
Cleveland
Tokyo
Secaucus
Bahrain
San Antonio
Cairo
Hong Kong
Mumbai(Bombay)
Singapore
São Paulo
.
Johannesburg
Sydney
Melbourne
Wellington
19
Alliance Capital - Entrepreneurial Investment
Organization
Enables Competitive Performance Across A Broad
Range Of Disciplines
Disciplined Growth
  • We believe that winning investment results are
    produced by small teams of well informed,
    dedicated portfolio management professionals.
    The necessary ingredients for success include
  • Focus Each team has a distinctive investment
    philosophy and process.
  • Information/Knowledge Each team conducts its own
    research and is supported by Alliances core
    research capability.
  • Timely distillation and interpretation of
    information.
  • Decisiveness.
  • Flexibility in the marketplace.
  • Individual initiative and accountability.
  • Incentive compensation tied to accomplishment.
  • Thus, we have organized as a confederation of
    portfolio manager teams armed with research,
    trading, systems and marketing expertise well
    beyond what each team could resource
    independently.

Technology
All Cap Growth
Large Cap Growth
Insurance Portfolios
Small Cap Growth
Municipal Bonds
Growth Income/ Value
Mid Cap
F.I. Sector Rotation (U.S. Global)
Small Cap
High Grade/ Mortgages
Asset Allocation
Domestic High Yield
Equity Sector Rotation
Global/ International Equities
Global High Yield
Emerging Markets Fixed Income
Emerging Markets Equities
Hedge Funds
Private Investing
Passive
20
Strategic Rationale - Alliance Capital
  • Expansion of Australian presence
  • Expansion of Australian investment capabilities
  • One of the fastest growing savings markets
    worldwide
  • Retirement savings growth
  • AXA Asia Pacific - 1,300 advisers

21
Michael Bargholz Chief Executive Alliance
Capital Management Australia
22
New Company StructureAlliance Capital Australia
and New Zealand
  • Board composition
  • 3 Alliance Capital, including Chairman
  • 3 AXA Asia Pacific
  • 1 AXA SA
  • Equity
  • 50 AXA Asia Pacific
  • 50 Alliance Capital
  • Operational management with Alliance Capital
  • Located in Sydney, Melbourne Wellington

23
Purpose and Investment Philosophy
  • Mission and primary objective is to achieve
    superior absolute and relative investment
    performance for our clients
  • Alliance Capitals global investment philosophy
    is based on proprietary research active
    management superior performance
  • Globally portfolio managers and analysts are
    selected and rewarded for skill in achieving long
    term superior performance for clients

24
Strength Across Asset Classes
  • Australian Equities Sydney team with 5 year top
    quartile performance (1)
  • International Equities Global large cap growth
    product with 5 year top quartile performance (2)
  • Active Australian Melbourne team with 5 year
    top
  • Fixed Interest quartile performance (3)
  • Cash Melbourne team has 5 year top quartile
    performance (4)
  • Passive Enhanced Australian Sydney team has 2
    year top
  • Fixed Interest quartile performance (5)

Source (1) William M Mercer Survey - Australian
Equities Specialist Funds - based on Teams
performance at Tower Asset Management - December
1999 (2) William M Mercer Survey - Overseas
Shares Specialist Funds - June 2000 (3) William
M Mercer Survey - Australian Fixed Interest
Specialist Funds - June 2000 (4) William M
Mercer Survey - Australian Cash Specialist - June
2000 (5) William M Mercer Survey - Passive
Australian Fixed Interest - June 2000
25
Retail Product Ratings
  • Australian Equities
  • AXA Industrials Fund Assirt
  • AXA Equity Imputation Funds Assirt
  • Global Equities
  • AXA Global Equity Large Cap Growth Morningstar
    (NZ)
  • Alliance Premier Growth Fund (US
    Equities) Morningstar (US)
  • Assirt
  • Alliance Capital Technology Fund Morningstar
    (US)
  • Assirt
  • Fixed Interest/ Mortgages
  • Australian Income Fund Assirt
  • Property
  • Australian Property Trust Assirt
  • Cash
  • AXA Australian Cash Fund Assirt

Rating
Agency
26
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27
Les Owen Group Chief Executive AXA Asia
Pacific Holdings Limited
28
Financial Structure
  • Transaction based on each party retaining value
    for current operations
  • Achieved by a partial retention (35) of
    investment management fees on current FUM
    (indexed to market movements)
  • All profits on increases in FUM will be shared
    equally
  • Earnings neutral for Y1. Positive going forward
    as FUM grow

29
(No Transcript)
30
Financial benefit to AXA Asia Pacific Shareholders
  • Not a sale of our Investment Management operation
  • Transaction will enhance growth aspirations of
    both parties
  • FUM will be agreed at closing but current
    estimates of the financial effect of partial fee
    retention is -
  • Current FUM - AXA Asia Pacific 17.3 billion
  • 1st year retained fees - AXA Asia Pacific 16.0
    million
  • Some cost synergies will be achieved. AXA Asia
    Pacific share approximately 5.0 million per
    annum
  • AXA Asia Pacific to retain 100 of retail product
    margin. Investment management profits equally
    shared
  • A key initiative in achieving the aggressive
    growth targets for AXA Asia Pacific

31
Summary
  • Exciting opportunity
  • Leveraging capabilities of global AXA Group
  • Significantly enhances our capability, perception
    and investment performance
  • Differentiates us in the Australian and New
    Zealand markets
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