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May 2019
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Hansa Trust is a proprietor based investment trust blending best‐in‐class third party funds, a global equity portfolio and a strategic holding in Ocean Wilsons Holdings
Managed by Hansa Capital Partners the trust adopts a long‐term approach, ignoring short‐term noise, with a focus on the growth and preservation of capital.
We are fully aligned with our investors, with significant internal money under management, in addition to third‐party mandates
This patient approach to managing money leads to natural bias towards equities albeit one that is dynamically dialled up and down as influenced by the economic cycle
The strategic holding in Wilson Sons, held through the stake in Ocean Wilsons Holdings, gives access to the large and growing Brazilian logistics and container industries. Wilsons has created significant economic value through time which has been reflected in exceptional long‐term share price performance
3
HANSA TRUSTIndex
• History of Hansa & Strategic Review
• Performance Review
• Portfolio Positioning & Characteristics
• Ocean Wilsons Holdings
• Market Outlook
• Appendix
History of Hansa & Strategic Review
4
5
HANSA TRUSTHansa timeline
A history of buying and selling large strategic stakes
Hansa Trust began life as Scottish and Mercantile Investment Company
Rea Brothers was formedThe Salomon Family obtain control of
Rea Brothers
Rea Brothers acquire a number of investment companies, including
Scottish and Mercantile
Rea Brothers purchases 58% of Ocean Wilsons
Holdings LimitedScottish and
Mercantile becomes Finsbury Trust
Rea Brothers was sold
Finsbury Trust becomes Hansa Trust
Ocean Wilsons successfully floats 41.75% of Wilson Sons Limited on the Sao Paulo and the Luxembourg Stock
Exchanges
Strategic review of Hansa Trust initiated
1900 1920 1940 1960 1980 2000 2020
6
HANSA TRUSTCorporate structure
HANSA TRUSTStrategic Review
7
Description Portfolio Weight
Core Regional
Thematic
Core Regional exposure based on the output of the Hansa House View.
Thematic Growth sectors such as biotechnology and technology.
34.4%
6.8%
Global Equities Equity exposure through direct global holdings.
16.6%
Diversifying Diversifying investments. As business cycles mature we seek to dynamically shift to those asset classes and sectors which will add portfolio protection.
11.2%
Strategic Stakes Wilson Sons – Brazilian operating assets.
Ocean Wilsons Investments Limited – Fund portfolio.
19.1%
12.2%
The ‘Four Silo Approach’ ‐ By blending assets and managers with different characteristics we aim to develop the optimal portfolio.
Description Portfolio Weight
UK Equities
Special situation UK equities but also included larger UK holdings.
65%
Strategic Stakes
Wilson Sons – Brazilian operating assets.
(includes Ocean Wilsons Investment portfolio).
35%
Hansa TrustJanuary 2014
Hansa Trust30 April 2019
Performance Review
8
HANSA TRUSTNAV, Share Price and KPI Performance
9
Source: Hansa Trust internal, unaudited data: Bloomberg, FTSE
Financial YTD end April 2019
Financial Year 2018‐19
Financial Year 2017‐18
3 years to end April 2019 (p.a.)
5 years to end April 2019 (p.a.)
15 years to end April 2019 (p.a.)
NAV Performance TR 2.4% 5.6% 6.3% 11.0% 4.3% 9.8%NAV Performance ex. OWHL TR 2.3% 6.1% 6.5% 9.8% 6.0% 7.8%Ordinary Share TR 6.2% 0.0% 16.5% 13.3% 2.9% 9.1%‘A’ Ordinary Share TR 3.4% 1.4% 17.3% 13.2% 2.8% 8.9%FTSE All‐Stocks Gilts TR ‐1.5% 3.7% 0.5% 3.5% 5.0% 5.3%UK CPI* n/a 1.9% 2.4% 2.2% 1.3% 2.3%MSCI All Country World Index NR GBP 3.0% 10.8% 2.6% 15.7% 12.6% 9.4%FTSE All Share TR GBP 2.7% 6.4% 1.2% 10.1% 6.2% 7.8%*UK CPI not yet released for 30 April 2019, so reported CPI performance is as at 31 March 2019
‐50%
0%
50%
100%
150%
200%
250%
300%
350%
Apr‐04 Apr‐05 Apr‐06 Apr‐07 Apr‐08 Apr‐09 Apr‐10 Apr‐11 Apr‐12 Apr‐13 Apr‐14 Apr‐15 Apr‐16 Apr‐17 Apr‐18 Apr‐19
15 Year NAV and Share Price Total Return
NAV Cum Income TR Ord Share TR A Ord Share TR
HANSA TRUSTPeer Group Analysis (to 31st March 2019)
10
Price % Discount Size £m % Net
Yield% NAV
Performance% Price
Performance
Now Mkt Cap Assets 3y 3y
Total Return Total Return
GlobalGlobal AIC Sector
ATS Artemis Alpha Trust UK All Companies 283.00 -17.3 116 153 1.8 21 30BTEM British Empire Global 738.00 -9.5 818 976 1.8 60 69CLDN Caledonia Global 2,990.00 -17.0 1,656 1,996 1.9 35 36CGT Capital Gearing Flexible Investment 4,170.00 3.6 331 268 0.7 22 23FSV Fidelity Special Values UK All Companies 265.00 1.7 725 790 1.9 37 44HAN Hansa Trust Flexible Investment 1,030.00 -27.5 82 340 1.6 40 44HANA Hansa Trust "A" Flexible Investment 975.00 -31.4 156 341 1.6 40 43HOT Henderson Opportunities UK All Companies 954.00 -17.4 75 106 2.2 26 25HAST Henderson Alternative Strategies Flexible Investment 270.00 -19.7 104 130 1.9 32 31RCP RIT Capital Partners Flexible Investment 2,080.00 10.4 3,231 3,089 1.6 27 32RICA Ruffer Invmt Co Flexible Investment 212.00 -4.7 383 402 0.9 12 8WTAN Witan Global 1,058.00 -3.8 1,873 2,193 2.2 47 51
FTSE All Share 33 33FTSE World ex UK 54 54
11
HANSA TRUSTPerformance of the different silos one year to 30 April 2019
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Core Regional Funds Thematic Global Equities Ocean Wilsons HoldingsLtd
Diversifying Assets Cash/FX Exposure
21,958
,129
3,53
1,98
6 2,65
4,27
81,68
5,71
21,36
3,59
376
3,74
068
8,56
131
5,39
742
,722
31,662
14,276 3,02
3,99
197
,419
62,664
1,95
5,13
877
3,93
263
4,60
960
4,37
150
1,25
044
6,51
440
2,47
822
1,26
117
2,21
051
,296
468,99
337
1,73
412
3,83
259
,635
30,990
21,181
20,992
14,508
8,57
5,29
339
1,38
645
,852
57,516
125,53
633
3,09
233
5,06
952
6,43
097
2,64
0
134,15
2
87,881
107,95
312
0,88
014
7,61
916
4,74
524
3,75
726
0,20
726
1,80
634
9,80
635
7,72
036
5,94
489
5,94
795
8,97
5
15,229
41,711
48,875
1,29
1,83
7
£‐
£5,000,000
£10,000,000
£15,000,000
£20,000,000
£25,000,000
Find
lay Pa
rk American
Select Equ
ity Offs
hore
Vulcan
Value
Equ
ityPe
rshing
Squ
are
Adelph
i Eur Select E
quity
BlackR
ock Eu
r Hed
geSISF Asia
n To
tal R
eturn
Vang
uard Dev Eur ex UK
Egerton Long
‐ Sh
ort
Goo
dhart: Ha
njo
Ode
y Ab
solute Return
NTA
sian Discov
ery
SR Globa
l Frontiers
Prince Stree
t Inst
BlackR
ock Fron
tiers
Indu
s Jap
an JP
Y Unh
edged
GAM
Star T
ech
Worldwide Hea
lthcare
SPDR
MSC
I World Fins
BB Biotech
Iridium
Tripad
visor
Alph
abet
Berkshire
Hatha
way
Hilto
n Fo
odNutrie
nWhite M
ountains
Hansteen
Holding
sDo
llar G
eneral
ITE Group
PLC
CK Hutchison
C&C
Subsea
7Exor
Orang
eKT
ADR
CVS He
alth
Howard Hu
ghes Corp
Technicolor
Orio
n En
gine
ered
Carbo
nsSamsung
Bayer A
GInteractive Brok
ers
Globa
l Event Partners L
tdHu
dson
Bay
Keynes Dynam
ic B Strategy
MKP
Opp
Offs
hore
Apollo Total Return Fu
ndSelwoo
d AM
GAM
Core Macro
Vang
uard US Trea
sury
BioP
harm
a Cred
it PLC
Schrod
er GAIA Blue
Tren
dCZ
Abs Alpha
UCITS
Ocean
Wilson
s Holding
sDV
4 Ltd
Cash/FX
Holdings so
ld during pe
riod
Total
12
Private Equity
Global Equities DiversifyingCore Regional Funds
HANSA TRUSTPerformance Contribution 1 Year to 30 April 2019 OWHL
Thematic
106,15
3,19
1
6,90
8,46
85,39
3,92
34,76
8,40
43,44
0,90
33,07
5,04
61,68
6,93
31,32
7,65
41,28
0,01
31,00
7,07
295
0,53
190
4,73
980
9,28
652
,160
31,662
9,11
6,25
927
0,50
079
,851
3,37
2,44
41,98
8,10
21,72
9,11
099
5,68
383
6,89
374
9,76
850
5,82
629
5,69
126
1,80
219
1,31
317
2,21
060
,187
51,296
1,41
5,57
083
5,34
234
6,58
611
0,35
260
,681
34,738
30,990
21,181
14,508
44,353
,678
1,30
5,50
79,39
1,59
7
132,42
236
9,78
1 134,15
2
51,118
107,95
312
0,88
013
8,97
222
3,01
924
3,75
731
7,64
334
9,80
659
6,99
298
4,80
9
15,229
232,15
2
62,582
£‐
£20,000,000
£40,000,000
£60,000,000
£80,000,000
£100,000,000
£120,000,000
Find
lay Pa
rk American
Select Equ
ity Offs
hore
Vulcan
Value
Equ
itySISF Asia
n To
tal R
eturn
Goo
dhart: Ha
njo
BlackR
ock Eu
r Hed
geAd
elph
i Eur Select E
quity
Indu
s Jap
an JP
Y Unh
edged
Vang
uard Dev Eur ex UK
Prince Stree
t Inst
NTA
sian Discov
ery
Pershing
Squ
are
BlackR
ock Fron
tiers
Egerton Long
‐ Sh
ort
SR Globa
l Frontiers
Ode
y Ab
solute Return
GAM
Star T
ech
SPDR
MSC
I World Fins
Worldwide Hea
lthcare
BB Biotech
Hansteen
Holding
sIridium
Hilto
n Fo
odInteractive Brok
ers
Alph
abet
Berkshire
Hatha
way
Tripad
visor
Nutrie
nWhite M
ountains
Exor
Dollar G
eneral
Orang
eITE Group
PLC
Samsung
C&C
Subsea
7Orio
n En
gine
ered
Carbo
nsHo
ward Hu
ghes Corp
KT ADR
CK Hutchison
Technicolor
CVS He
alth
Bayer A
GGloba
l Event Partners L
tdHu
dson
Bay
Keynes Dynam
ic B Strategy
MKP
Opp
Offs
hore
GAM
Core Macro
CZ Abs Alpha
UCITS
Apollo Total Return Fu
ndSelwoo
d AM
Vang
uard US Trea
sury
BioP
harm
a Cred
it PLC
Schrod
er GAIA Blue
Tren
dOcean
Wilson
s Holding
sDV
4 Ltd
Cash/FX
Holdings so
ld during pe
riod
Total
13
Private EquityGlobal Equities DiversifyingCore Regional Funds
HANSA TRUSTPerformance Contribution 3 Years to 30 April 2019
OWHLThematic
10.8%8.8%
5.1%2.4%
‐20.0%
‐10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
Performan
ce (G
BP)
14
HANSA TRUSTPerformance of less correlated funds 1 June 2016 to 30 April 2019A basket of lower‐correlated funds have been purchased since June/July 2016. The performance since has been positive and outperformed bonds and cash.
* Bought during the period (performance shown for period held)** Sold during the period (performance shown for period held)
15
HANSA TRUSTTransactions during 2019
• Equity Purchases £4.5m:
– Dollar General £2.0m– ITE Group PLC £1.6m– CK Hutchison £0.6m– Iridium £0.3m
• Fund Purchases £12.7m:
– BB Biotech AG £3.5m– BlackRock European Hedge Fund £3.4m– Vanguard US Government Bond Index Fund £2.7m– Selwood AM – Liquid Credit Strategy £2.5m– BioPharma Credit PLC £0.5m
• Equity Sales £2.8m:
– Coca‐Cola Bottlers Japan Holdings Inc £1.5m (loss of £0.6m)– White Mountains Insurance Group Ltd £0.6m (profit of £28k)– Hilton Food Group PLC £0.5m (profit of £0.2m)– Alphabet Inc £0.3m (profit of £0.1m)
• Fund Sales £12.8m:
– iShares EURO STOXX Mid UCITS ETF £5.0m (loss of £0.1m)– BNY Mellon Absolute Return Bond Fund £2.2m (loss of £0.1m)– Vanguard FTSE Dev Eur ex UK Fund £1.8m (profit of £0.4m)– GAM Star Technology Fund £1.7m (profit of £0.9m)– Pareturn Gladwyne Absolute Credit UCITS £1.5m (loss of £0.1m)– GAM Systematic Core Macro Fund £0.4m (loss of £8k)– Schroder GAIA BlueTrend £0.3m (loss of £0.1m)
16
HANSA TRUSTGlobal Equities – performance by size of holding 30 April 2019
Security NameInitial Purchase
DateValue (GBP)
% of Total NAV
% of Global Equity Silo
1 YearPerformance
(or since initial
purchase)
3 YearPerformance
(or since initial
purchase)
Berkshire Hathaway Inc 03/04/2017 4,019,472 1.2% 7.0% 18.1% 24.6%
Iridium Communications Inc 12/07/2017 3,579,702 1.0% 6.3% 143.8% 148.3%
Interactive Brokers Group Inc 05/04/2017 3,568,380 1.0% 6.2% ‐22.4% 50.0%
Hansteen Holdings PLC 25/11/2005 3,490,212 1.0% 6.1% 3.6% 48.8%
CK Hutchison 01/12/2017 3,464,351 1.0% 6.1% ‐3.5% ‐11.4%
EXOR NV 05/09/2017 3,317,056 1.0% 5.8% ‐4.9% 7.0%
Alphabet Inc 18/04/2017 2,943,136 0.9% 5.1% 24.2% 34.7%
Hilton Food Group PLC 23/04/2014 2,737,800 0.8% 4.8% 17.9% 89.6%
KT Corp ADR 22/08/2018 2,670,537 0.8% 4.7% ‐11.1% ‐11.1%
White Mountains Insurance 11/04/2017 2,665,272 0.8% 4.7% 14.8% 2.5%
Orange 20/02/2018 2,520,289 0.7% 4.4% ‐6.1% 2.0%
Samsung Electronics Co Ltd 08/08/2017 2,459,259 0.7% 4.3% ‐12.6% ‐2.1%
TripAdvisor Inc 11/09/2017 2,204,986 0.6% 3.9% 50.4% 20.5%
Dollar General 21/03/2019 2,176,128 0.6% 3.8% 8.6% 8.6%
C&C Group PLC 31/07/2018 2,176,109 0.6% 3.8% ‐5.9% ‐5.9%
Nutrien 29/11/2017 1,980,188 0.6% 3.5% 28.2% 14.3%
Bayer AG 05/04/2017 1,818,819 0.5% 3.2% ‐37.3% ‐40.0%
Subsea 7 07/05/2018 1,766,342 0.5% 3.1% ‐6.4% ‐6.4%
Howard Hughes Corp 10/04/2017 1,701,749 0.5% 3.0% ‐13.3% ‐11.6%
ITE Group PLC 05/02/2019 1,701,400 0.5% 3.0% 7.5% 7.5%
Orion Engineered Carbons SA 17/07/2017 1,630,255 0.5% 2.8% ‐18.1% ‐11.0%
CVS Health Corp 10/04/2017 1,429,142 0.4% 2.5% ‐15.4% ‐29.1%
Technicolor 14/06/2018 1,209,697 0.4% 2.1% ‐26.9% ‐26.9%
Total Global Equities Silo 57,230,282 16.6% 100.0%
Primary Exchange or Equity Index
S&P 500, 18.5%
Kospi, 15.0%
NASDAQ, 16.0%Russell 1000,
11.4%
DAX, 7.6%
FTSE 250, 6.1%
FTSE Small Cap, 7.8%
NYSE, 2.8%
Borsa Italiana, 5.8%
IEX, 3.8% OSE, 3.1%CAC, 2.1%
HANSA TRUSTGlobal Equities Silo as at 30 April 2019
Europe , 36%
US, 49%
Asia , 15%
Geographic Exposure by Listing
‐2%
0%
2%
4%
6%
8%
10%
World Index FTSE 100 Hansa Trust Global EquitiesPerformance
Performance 1 May 2018 to 30 April 2019
Portfolio Positioning & Characteristics
18
19
HANSA TRUSTCurrent Positioning (as at 30 April 2019)
15.2%
6.1% 5.7%
3.1%1.8% 1.3% 1.2%
4.3%
1.5% 1.0%
14.8%
1.8%
5.7%
2.8% 2.6%
19.1%
12.2%
‐0.1%
‐5%
0%
5%
10%
15%
20%
25%
20
HANSA TRUSTPortfolio Characteristics (as at 30 April 2019)
Look‐through analysis of Hansa Trust portfolio, including holdings in Wilson Sons and Ocean Wilsons (Investments) Ltd*
Note: The exposures are based on the underlying holdings of the investments*Geographic and Sector exposures include a look‐through to Wilson Sons and Ocean Wilson (Investments) Ltd. based on the top 30 positions as at 31 Dec 2018. These are subsequently grossed up to 100%.
34.1%
20.1%10.4%
9.8%
8.5%
7.6%6.9%
1.8% 0.6% ‐0.1%
Geographic Exposure
North America Latin America Developed Europe ex UKAsia Pacific ex Japan Diversifying Hedge Funds UKJapan Middle East & Africa Emerging EuropeCash/Liquidity Funds
27.5%
13.5%
11.7%8.5%
8.1%
8.0%
7.9%
5.6%
4.4% 2.7% 1.9% 0.2%‐0.1%
Sector Exposure
Industrials Information Technology FinancialsDiversifying Hedge Funds Consumer Discretionary Communications ServicesHealth Care Real Estate Consumer StaplesMaterials Energy UtilitiesCash/Liquidity Funds
37.3%
31.3%
16.6%
5.7%
2.8%3.9% 2.6% ‐0.1%
Asset Type
Long Only Ocean Wilsons Holdings Ltd Direct EquitiesMarket Neutral Private Equity Long‐ShortFixed Income Cash
41.5%
3.1%
13.4%7.7%
0.2%
2.8%
31.3%Dealing Frequency
Daily WeeklyMonthly Quarterly> 1 year Fixed Life Investment Period CompleteOcean Wilsons Holdings Ltd
21
HANSA TRUSTOther Portfolio Characteristics (as at 30 April 2019)
Total liquidity includes the settlement period, any lock upor notice period and any redemption restrictions. OceanWilsons (Investments) is considered a fixed investment asHansa Trust cannot deal individual holdings directly.
Weighted average management fee = 1.2%. This includesmanagement fees paid to third parties and to Hansa CapitalPartners LLP.
Cash0%
1 Week42%
1 month3%3 months
11%
6 months6%
> 6 months3%
Fixed35%
Total Liquidity
No Fee47.7%
Less than 1%45.3%
Between 1% and 1.5%5.1%
Between 1.5% and 2%1.9%
Annual 3rd Party Management Fees on Underlying Holdings
22
HANSA TRUSTDividend ProfileDividend Policy
Since 2014 the Trust’s dividend policy has been to pay two similar interim dividends each year. Barringunforeseen circumstances, the dividend is expected to grow over time reflecting the longer term returns of theportfolio.
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
0
5
10
15
20
25
30
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
12 m
onth yield
Net dividen
d (pen
ce)
Dividend Payments and Annual Yield
Net dividends paid during calendar year (LHS) 12 month yield (RHS)
23
HANSA TRUSTDiscount
A significant discount to asset value both absolute and relative to the broader investment trust sector. Even more so on a look through basis
‐50%‐45%‐40%‐35%‐30%‐25%‐20%‐15%‐10%‐5%0%
Apr‐09
Oct‐09
Apr‐10
Oct‐10
Apr‐11
Oct‐11
Apr‐12
Oct‐12
Apr‐13
Oct‐13
Apr‐14
Oct‐14
Apr‐15
Oct‐15
Apr‐16
Oct‐16
Apr‐17
Oct‐17
Apr‐18
Oct‐18
Apr‐19
Hansa Trust Ord and A combined
Discount Look‐through discount
‐45%‐40%‐35%‐30%‐25%‐20%‐15%‐10%‐5%0%5%
10%
Apr‐09
Oct‐09
Apr‐10
Oct‐10
Apr‐11
Oct‐11
Apr‐12
Oct‐12
Apr‐13
Oct‐13
Apr‐14
Oct‐14
Apr‐15
Oct‐15
Apr‐16
Oct‐16
Apr‐17
Oct‐17
Apr‐18
Oct‐18
Apr‐19
Hansa Trust Ord and A combined (relative to AIC overall average discount)
Discount Look‐through discount
Ocean Wilsons Holdings
24
25
HANSA TRUSTOcean Wilsons Holdings
Ocean Wilsons Holdings is a Bermudian investment holding company whose main assets are a controlling interest in Wilsons Sons and an international investment portfolio, both run with a long‐term view. The Oceans holding is controlled by the Hansa Trust board
26
HANSA TRUSTWilson Sons
Wilson Sons is among Brazil’s largest and oldest port, maritime and logistics services companies
27
HANSA TRUSTWilson Sons
Despite the challenges faced in Brazil in recent years, Wilsons has generated significant economic value
28
HANSA TRUSTWilson Sons
Wilson Sons operates in a market with significant structural growth potential
29
HANSA TRUSTOcean Wilsons Investments (Limited) as at 31 December 2018
Ocean Wilsons Investments (Limited) is an investment portfolio focused on achieving long‐term returns while emphasising capital generation and possessing an emerging market bias
13.6%
9.0%
5.5% 5.8%
1.8% 2.6%
6.9%
2.1%
31.8%
3.2% 2.4% 2.4%0.9% 0.9%
6.2%
1.7%0.4%
2.9%
0%
5%
10%
15%
20%
25%
30%
35%
Market Outlook
30
31
HANSA TRUST2018….the beginning of the end?
Slowing China real and nominal GDP
…..2018 characterised by slowing growth, both globally and China in particular
2018 saw downgrades across the board with the US the notable exception
32
HANSA TRUST2018….the beginning of the end?
A growing fear that US rates were behind behind the curve with fears of higher inflation feeding into the system
Combined with road‐marks being hit by key indicators
…….a number of boxes were being ticked to indicate the end of the cycle
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%20
07
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
US average ho
urly earning
s yea
rly cha
nge
33
HANSA TRUST2018….the beginning of the end?
….net effect of this was a significant de‐rating of markets. The market was beginning to price in recession
-60
-40
-20
0
20
40
60
DM
AC W
orld
AC A
PxJ
EM
Dev
Eur
ope
US
Switz
erla
nd
Japa
n
Fran
ce UK
Spai
n
Italy
Ger
man
y
Bra
zil
Rus
sia
Indi
a
Indo
nesi
a
Mex
ico
Chi
na
Kor
ea
S. A
frica
Turk
ey
1-yr chg in NTM EPS 1-yr chg in NTM P/E 1-yr FX contribution US$ Price return(%)
Region Developed Markets Emerging Markets
Strong earnings ... imply the weakness in prices led to significant derating
34
HANSA TRUST2019….markets have rallied sharply
Chinese data has shown signs of stabilisation, suggesting that stimulus measures are starting to work
Deutsche Bank GDP survey points to lower growth in 2019 but not recession
……economic growth slower in 2019 versus 2018 but signs of stabilisation and not recession
35
HANSA TRUST2019….markets have rallied sharply
The ECB has pushed back it exits process from QE in light of weaker growth
US fed announced a U‐turn on interest rate policy in January
…….Jay Powell rowed back from earlier comments on rates and put them on hold. Some market participants are now calling for the next rate move to be down
36
HANSA TRUST2019….markets have rallied sharply
Fund flows out of equities has been high Hedge fund positioning appears conservative
…….the strength of the market rebound probably reflects the excessively defensive positioning by many investors as we came into the New Year
37
HANSA TRUSTKey risks…..a conventional rate induced slowdown
Interest rate induced recessions are the most common
……our core view is that we experience a normal rate induced recession and bear market as monetary policy is tightened to kill‐off excesses in the economy
38
HANSA TRUSTKey risks…..China
China’s investment share of GDP is already very high – typically growth show sharply post peak
Private sector debt levels comparable to other countries prior their crises
…..China has been a huge success story in recent years (at least from an economic perspective). However there are some signs that cracks may be appearing
39
HANSA TRUSTKey risks……Europe
Quote from the FT
Germany, the powerhouse of Europe, looks increasingly vulnerable to China moving up the IP spectrum
European banks have failed to resolve their GFC issues and are key to the success of Europe
……Europe is mired in its structural challenges
40
HANSA TRUSTSummary
• Markets started to ask some serious questions on the longevity of the current cycle in 2018. In particular they focused on:
• Economic growth slowing outside of the US• Monetary policy shifting from tightening due to high growth to tightening to kill‐off excesses in the economy• The US/China trade war pushing China over the edge at a time when its growth was already under pressure
• This led to a sharp de‐rating of stock markets and a recession increasingly being factored into valuations
• We felt this was unjustified:• Growth is slowing but we do not see the normal excesses associated with recession• Real and nominal rates are still accommodative and importantly Fed Chair, Jay Powell, has done an about turn on
rates
• What perhaps was surprising was the strength of the market rebound. This is probably due to overly cautious investor positioning coming into the New Year
• Overall our position remains one of a maturing cycle. Our bias is still towards equities but our direction of travel is to systematically lean away from equities over time
Appendix
41
42
HANSA TRUSTPerformance of the different silos three years to 30 April 2019
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
Core Regional Funds Thematic Global Equities Ocean Wilsons HoldingsLtd
Diversifying Assets Cash/FX Exposure
Hansa Capital PartnersInvestment process…..Overview
43
Portfolio
Dynamic Asset Allocation
Portfolio fulfilment through investing in exceptional managers
Optimisation & portfolio construction
Risk and portfolio management
We believe in dynamically moving between asset classes to reflect both valuations and the position within the business cycle. We are truly global in our outlook
We do not view volatility as being an important risk. Rather we would view this as market noiseand not typically a risk to long‐term investors such as Hansa. Often it represents opportunity.
Instead we define risk as:Permanent impairment of capitalMajor drawdowns in a portfolio which exceed a client’s tolerance level
The combination of an experienced team and a well‐connected network enables us to invest in exceptional managers
Typically our funds are not available to the man on the street
We blend assets based on their expected returns and the way in which they interact with one another
We overlay both experience and history to the outcome
Time
Hansa Capital PartnersInvestment process….. Dynamic Asset Allocation
44
Valuation extremes are key drivers:• We seek to increase/decrease defensive
holdings in these periods
Global Equities
Multi Asset Portfolio
Here the Business Cyclebecomes the key driver
Hansa Capital PartnersInvestment process….. Dynamic Asset Allocation
45
A client’s Strategic Asset Allocation will dynamically shift through time to reflect both theposition within the business cycle and valuations
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011 2012 2013 2014
Long‐only
Private Equity
Private Debt
Real Assets
Emerging Market Debt
High Yield Debt
Hedge Funds
Market Neutral Funds
Cash
Hansa Capital PartnersInvestment process….. Risk
46
The fund management industry definesvolatility as risk – it’s convenient but notultimately relevant to long–term investors suchas Hansa
Much more important are drawdowns whichexceed a client’s tolerance
‐46%‐48%
Hansa Capital PartnersInvestment process…Risk
47
• Drawdowns represent the peak to trough performance of different asset classes at points of market distress. Typicallythe riskier the asset class the greater the potential drawdown. Drawdowns are problematic when they exceed aninvestor’s tolerance level, especially when holdings are liquidated. This effectively crystallises the loss forever.
New paradigms do present themselves fromtime‐to‐time which can have importantimplications for portfolio construction
‐90%‐80%‐70%‐60%‐50%‐40%‐30%‐20%‐10%0%
Max Drawdown
02468
101214
UK US India China Japan
yiel
d (%
)
Yields for global bond markets (20yr)
Hansa Capital PartnersInvestment process…..Risk
48
We protect ourselves against permanent impairments in capital in four ways: Valuation based investment approach and dynamically managing portfolios through business cycles Investing in high quality managers through a rigorous due diligence process Diversification and holding assets with low correlations Application of experience and common sense
Hansa Capital PartnersInvestment process….. Portfolio Blending
49
Long‐Only Long‐Short Strategic
Core Regional Silo
Our natural hunting ground – as endowment type investors we want to capture the natural beta within markets
A combination of all‐weather managers or protection in more mature business cycles
Fee conscious!
Wilson Sons
ThematicSector Silo
We seek to identify those sectors with long‐term growth attributes, such as technology and biotechnology
Diversifying Silo
As business cycles mature we seek to dynamically shift to those asset classes and sectors which will add portfolio protection
By blending assets and managers with different characteristics we aim to develop the optimal portfolio
Hansa Capital PartnersInvestment process…..Well connected
50
The combination of an extraordinarily wellconnected network and an experienced teamenables us to invest in exceptional managers
These managers are not normally available tothe man on the street
We have seeded some exceptional managers
Hansa Capital PartnersInvestment process…..Global equity selection
51
Our global equity portfolio is composed of 20 – 45 names, is diversified, has a high active share and is built from the bottom up
Hansa Capital PartnersInvestment process…..Summary
52
Proprietor DNA A proprietor driven approach is central to how we manage money….patient, unconstrained and dynamic
A dynamic approach We believe a static approach to managing money fails to reflect how cycles evolve and valuations change
Well connected An unparalleled address book means we can access the very best managers globally
Alignment of interests Significant internal capital ensures a complete alignment of interest with external money
Hansa Capital PartnersThe Team
53
William SalomonManaging Partner(30yrs/17yrs)
Alec LetchfieldChief Investment Officer, Partner
(25yrs/5yrs)
Jon‐Kit ChanResearch Assistant
(1yr/1yr)
Christopher TownsendPrivate Equity(19yrs/8yrs)
William LewisResearch Analyst
(10yrs/6yrs)
Stephen Thomas, COO James Siddalls Stephen Kenley Rachel O’ConnorCompliance Officer,Partner
Rob RoyleGlobal Equities(15yrs/2yrs)
*(years in industry/ years at Hansa)
George Clifton‐BrownResearch Analyst
(5yrs/1yr)
Hansa Capital PartnersTeam Biographies
54
William SalomonManaging Partner
William Salomon has extensive knowledge of all aspects of private client and strategic fund investmentbusiness.He was responsible for developing Finsbury Asset Management and the Finsbury range of funds based onthe concept of early recognition of key investment trends, such as life sciences and technology, andappointing specialist managers until taken over in 1995 by Rea Brothers Group, the family’s bank of whichhe eventually became Chairman.In 1999 Rea Brothers Group was taken over by Close Brothers Group when he was appointed DeputyChairman of the investment division. He has served on the board of a number of investment and tradingcompanies.He is the senior partner of Hansa Capital Partners LLP, Deputy Chairman of Ocean Wilsons Holdings Limitedand its listed subsidiary Wilson Sons Limited and a Director of Hansa Trust PLC.
Alec LetchfieldChief Investment Officer, Partner
Alec has 24 years' experience in managing multi‐asset class and equity portfolios for both private clientsand institutional investors. After joining HSBC James Capel in 1993 he headed up the UK equity team,developing the successful Focus Fund range based on conviction investing.Following his appointment as Chief Investment Officer for Multi‐Asset, he was instrumental in thedevelopment of the multi‐asset class offering for the HSBC Group. This highly diverse range of solutionsgenerated excellent investment performance and industry leading asset growth.Alec is a graduate of University College London, where he studied Economics, and is also a member of theSecurities Institute.
Hansa Capital PartnersTeam Biographies
55
Christopher TownsendPrivate Equity
Christopher is a qualified solicitor. He has an MA from Peterhouse, Cambridge and was awarded an MBAfrom London Business School. He is currently investment director at Hansa Capital GmbH and a non‐executive Director of Ocean Wilsons Holdings Limited. He previously worked as a principal in theinvestment team at Coller Capital Limited and Sum International Group in London and as a Solicitor atAshurst Morris Crisp
Robert RoyleGlobal Equities
Robert joined Hansa Capital Partners in 2016 to manage Global Equity portfolios. Prior to this he was aPartner at Smith & Williamson managing North American and Global equity mandates. He previouslyworked for Citi Quilter and Hill Samuel in similar roles.Robert graduated from the University of East Anglia in 2004 with a degree in History. Robert is a CFAcharterholder.
Jon‐kit ChanResearch Assistant
Jon‐kit joined Hansa Capital Partners LLP in September 2017, supporting other members of theinvestment team in portfolio analysis and asset allocation. Most recently Jon‐kit completed his MSc inInvestment and Wealth Management at Imperial College London’s Business School.Prior to this, he graduated from the University of Sussex in 2014 reading BSc in Economics andworked for two years at AmTrust at Lloyd’s, a Lloyd’s Managing Agent, in their Catastrophe Modellingdepartment. He holds the Investment Management Certificate.
Hansa Capital PartnersTeam Biographies
56
William LewisResearch Analyst
Will joined Hansa Capital Partners LLP in 2012, after four years on the investment team at what wasthen Lord North Street, now Sandaire Investment Office, a London‐based private investment office.He graduated from the University of Oxford in 2007 with a degree in Engineering, Economics andManagement, following which he spent a year working in Parliament and the Home Office. He holdsthe Investment Management Certificate and is a CFA charterholder.
George Clifton‐BrownResearch Analyst
George joined Hansa Capital Partners LLP in March 2018, having previously worked for three years atCapital Group, a Los Angeles based asset manager, where he led the European data managementteam.He graduated from the University of Cambridge in 2013 with a degree in Land Economy, followingwhich he spent a year working at Newton Investment Management, part of BNY Mellon.
IMPORTANT NOTICE
This presentation pack is issued by Hansa Capital Partners LLP, which is authorised and regulated by theFinancial Conduct Authority.
Hansa Capital Partners LLP is the Portfolio Manager and Company Secretary to Hansa Trust PLC.
Investment Trusts are UK Public Listed companies and are not authorised or regulated by the FinancialConduct Authority.
The staff at Hansa Capital Partners LLP and/or the Directors of Hansa Trust PLC may hold positions inthe securities mentioned in this presentation or may buy, sell or offer to make a purchase or sale of suchsecurities from time to time.
This presentation pack is not a prospectus, does not contain any representations, and does not constituteor form part of any offer or invitation to buy, underwrite or solicit any offer to purchase securities, norshall it or any part of it form the basis of or be relied upon in connection with any contract therefore.
This presentation pack has been solely supplied for your information and you may not be reproduce it,distribute it to another person or publish it, in any case in whole and in part, for any purpose.The information contained in this pack is selective, is for background purposes only and is subject toamendment.
Past performance is not necessarily a guide to future performance. The price of shares and incomegenerated may fall as well as rise. An investor may not get back the amount invested.
