Shareholder presentation Feb 2018 - hansatrust.com · 2 Hansa Trust is a proprietor based investment trust blending best‐in‐class third party funds, a global equity portfolio

HANSA TRUST

February 2018

2

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 the Alto Parano Company in 1912 and later changing its name to Scottish & Mercantile Investment Company

Rea Brothers was formedThe Salomon Family obtain control of

Rea Brothers

Rea Brothers acquire the management of a number of

invesment companies, including Scottish & Mercantile

Rea Brothers purchases 58% of Ocean Wilsons

Holdings Limited on behalf of its clients including Scottish & Mercentile Scottish & 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 Silo

Regional exposure based on the output of the HansaHouse View.

34.6%

Global Equities Equity exposure through direct global holdings 15.5%

Thematic & Diversifying Silo

A silo including two elements: Diversifying. As business cycles mature we

seek to dynamically shift to those asset classes and sectors which will add portfolio protection

Thematic Growth sectors such as biotechnology and technology

28.6%

Strategic Stakes

Wilson Sons – Brazilian operating assets 19.8%

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 TrustDecember 2017

Performance Review

8

HANSA TRUSTPerformance to end December 2017

9

Source: Hansa Trust internal, unaudited data: Bloomberg, FTSE

Financial YTD* One year 5 years (p.a.) 15 years (p.a.)

NAV Performance TR 8.5% 11.2% 8.2% 12.3%NAV Performance ex. OWHL TR 9.0% 13.2% 9.5% 9.6%Ordinary Share TR 21.6% 27.7% 9.5% 12.6%‘A’ Ordinary Share TR 17.9% 21.2% 8.1% 12.3%

‐100%

0%

100%

200%

300%

400%

500%

600%

Dec‐02

May‐03

Oct‐03

Mar‐04

Aug‐04

Jan‐05

Jun‐05

Nov

‐05

Apr‐06

Sep‐06

Feb‐07

Jul‐0

7

Dec‐07

May‐08

Oct‐08

Mar‐09

Aug‐09

Jan‐10

Jun‐10

Nov

‐10

Apr‐11

Sep‐11

Feb‐12

Jul‐1

2

Dec‐12

May‐13

Oct‐13

Mar‐14

Aug‐14

Jan‐15

Jun‐15

Nov

‐15

Apr‐16

Sep‐16

Feb‐17

Jul‐1

7

Dec‐17

NAV Cum Income TR Ord Share TR A Ord Share TR

31 Dec 2017 –16 Feb 2018

NAV Performance TR ‐2.2%NAV Performance ex. OWHL TR ‐1.3%Ordinary Share TR ‐3.5%‘A’ Ordinary Share TR 0.8%

* Financial YTD refers to end of March to date

10

HANSA TRUSTPerformance of the different silos one year to 31 December 2017

0%

5%

10%

15%

20%

25%

Core Regional Funds Global Equities Thematic Diversifying (ex OWHL) Ocean WilsonsHoldings Limited

Cash/FX

37,091

,971

3,65

3,59

21,80

6,42

41,72

4,10

31,61

1,98

51,03

6,73

697

3,09

387

5,24

076

8,11

673

2,55

351

7,65

246

5,42

445

8,47

228

6,04

191

,161

45,911 2,42

6,73

21,19

3,59

994

7,17

533

9,43

730

7,79

226

3,94

726

1,79

519

3,99

115

0,04

013

9,21

598

,276

69,705

45,441

26,874

15,948 2,63

9,77

82,29

8,81

529

3,73

527

,149

722,91

417

1,14

111

6,09

346

,375

12,756

28,567

12,049

11,118

,114

237,94

418

2,63

5

525,41

3

23,630

31,942

146,68

016

6,82

220

7,53

325

8,11

534

5,40

2

4,81

810

5,55

124

3,34

3

25,711

257,60

4

£‐

£5,000,000

£10,000,000

£15,000,000

£20,000,000

£25,000,000

£30,000,000

£35,000,000

£40,000,000

Goo

dhart: Ha

njo

SISF Asia

n To

tal R

eturn

Find

lay Pa

rk American

Indu

s Jap

an Lon

g Only

Adelph

i Eur Select E

quity

BlackR

ock Eu

r Hed

gePrince Stree

t Inst

Select Equ

ity Offs

hore

Vulcan

Value

Equ

ityVa

ngua

rd Dev Eur ex UK

NTA

sian Discov

ery

BlackR

ock Fron

tiers

iSha

res E

uro Stoxx

Ode

y Ab

solute Return

SR Globa

l Frontiers

Pershing

Squ

are

Hansteen

Holding

sInteractive Brok

ers

Hilto

n Fo

odAlph

abet

NCC

Group

Berkshire

Hatha

way

Samsung

CBRE

Orio

n En

gine

ered

Carbo

nsBroo

ks M

acdo

nald

UBM

Nutrie

nIridium

Bayer A

GHo

ward Hu

ghes Corp

Softba

nkCK

Hutchison

Exor

Libe

rty Globa

lWhite M

ountains

CVS He

alth

Tripad

visor

Equitie

s So

ld During Pe

riod

GAM

Star T

ech

SPDR

MSC

I World Fins

Worldwide Hea

lthcare

Globa

l Event Partners L

tdKe

ynes Dynam

ic B Strategy

GAM

Core Macro

CZ Abs Alpha

UCITS

Hudson

Bay

Schrod

er GAIA Blue

Tren

dMKP

Opp

Offs

hore

Field Street Offs

hore

Gladw

yne GBP

BNY Ab

s Return Bo

nd Fun

dJLP Cred

it Opp

Ocean

Wilson

s Holding

sDV

4 Ltd

Cash/FX

Fund

Holding

s sold du

ring pe

riod

Total

11

Private Equity

Global Equities DiversifyingCore Regional Funds

HANSA TRUSTPerformance Contribution 1 Year to end December 2017

OWHL

Thematic

12

Private Equity

Global Equities DiversifyingCore Regional Funds

HANSA TRUSTPerformance Contribution 3 Years to end December 2017 OWHL

Thematic

72,978

,390

4,49

9,60

44,12

5,27

73,69

1,65

53,66

9,93

32,89

3,27

92,41

7,56

21,80

7,04

01,59

8,05

21,24

0,49

671

2,45

871

2,33

445

8,47

228

6,04

145

,911

3,99

6,10

73,80

7,82

91,91

3,33

01,27

1,74

61,19

3,59

997

4,30

333

9,43

726

3,94

726

1,79

525

0,50

719

3,99

115

0,04

069

,705

45,441

26,874

15,948 4,10

4,90

64,55

9,19

529

3,73

527

,149

890,12

443

7,69

042

3,55

116

1,49

711

6,09

346

,375

35,477

667,59

649

,752

28,567

20,886

,596

1,00

7,62

461

9,07

3

574,81

42,22

2,88

8

23,630

31,942

146,68

016

6,82

220

7,53

325

8,11

534

5,40

2

154,50

9

176,98

5

£‐

£10,000,000

£20,000,000

£30,000,000

£40,000,000

£50,000,000

£60,000,000

£70,000,000

£80,000,000

Goo

dhart: Ha

njo

Find

lay Pa

rk American

SISF Asia

n To

tal R

eturn

Select Equ

ity Offs

hore

Vulcan

Value

Equ

ityIndu

s Jap

an Lon

g Only

BlackR

ock Eu

r Hed

geAd

elph

i Eur Select E

quity

Prince Stree

t Inst

NTA

sian Discov

ery

Vang

uard Dev Eur ex UK

BlackR

ock Fron

tiers

iSha

res E

uro Stoxx

SR Globa

l Frontiers

Ode

y Ab

solute Return

Pershing

Squ

are

UBM

Hansteen

Holding

sHilto

n Fo

odBroo

ks M

acdo

nald

Interactive Brok

ers

NCC

Group

Alph

abet

Berkshire

Hatha

way

Samsung

Acertec

CBRE

Orio

n En

gine

ered

Carbo

nsNutrie

nIridium

Bayer A

GHo

ward Hu

ghes Corp

Softba

nkCK

Hutchison

Exor

Libe

rty Globa

lWhite M

ountains

CVS He

alth

Tripad

visor

Equitie

s So

ld During Pe

riod

GAM

Star T

ech

SPDR

MSC

I World Fins

Worldwide Hea

lthcare

Globa

l Event Partners L

tdField Street Offs

hore

Hudson

Bay

Keynes Dynam

ic B Strategy

GAM

Core Macro

CZ Abs Alpha

UCITS

MKP

Opp

Offs

hore

Schrod

er GAIA Blue

Tren

dJLP Cred

it Opp

BNY Ab

s Return Bo

nd Fun

dGladw

yne GBP

Ocean

Wilson

s Holding

sDV

4 Ltd

Cash/FX

Fund

Holding

s sold du

ring pe

riod

Total

8.6%6.3%

1.8% 1.8%

‐15.0%

‐10.0%

‐5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Performan

ce (G

BP)

13

HANSA TRUSTPerformance of less correlated funds 1 June 2016 to 31 December 2017A basket of lower‐correlated funds was purchased in June/July 2016. The performance since has been positive and outperformed bonds and cash.

14

HANSA TRUSTTransactions 1 January 2017 to 31 December 2017

• Equity Purchases £36.4m:

– CK Hutchison £2.8m– Berkshire Hathaway £2.7m– Exor NV £2.7m– Samsung £2.6m– Softbank £2.5m– Alphabet £2.4m– Liberty Global £2.3m– Bayer AG £2.1m– CVS Health £2.1m– Interactive Brokers £2.1m– White Mountains Insurance Group £2.1m– Howard Hughes Corp £1.9m– Orion Engineered Carbons £1.9m– Nutrien £1.8m– CBRE Group Inc. £1.7m– TripAdvisor £1.4m– Iridium Communications Inc. £1.3m

• Fund Purchases £23.2m:

– iShares EURO STOXX Mid UCITS ETF £5.1m– Blackrock Frontiers Investment Trust £3.9m– SPDR MSCI World Financials ETF £3.1m– SSgA GBP Liquidity Fund £2.7m– SR Global Fund Frontier Markets £2.6m– Worldwide Healthcare Trust £1.6m– Pareturn Gladwyne Absolute Credit UCITS GBP £1.6m– CZ Absolute Alpha UCITS Fund £1.3m– GAM Systematic Core Macro Fund £1.3m

• Equity Sales £41.9m:

– Galliford Try PLC ‐ £7.8m (profit of £4.1m)– NCC Group ‐ £6.8m (profit of £4.5m)– Experian Group Limited £6.3m (profit of £4.1m)– UBM PLC ‐ £5.5m (profit of £1.9m)– Cape PLC £4.1m (loss of £0.5m)– Brooks Macdonald Group PLC £2.7m (profit of £1.0m)– Goals Soccer Centres £2.3m (loss of £0.5m)– Hargreaves Services £2.3m (loss of 49k)– Altitude Group PLC ‐ £1.8m (profit of £0.8m)– Cairn Energy PLC ‐ £1.1m (loss of £2.1m)– ImmuPharma ‐ £0.6m (loss of £0.3m)– Rhythmone PLC ‐ £0.2m (loss of £0.9m)– RedT Energy PLC ‐ £0.2m (loss of £1.1m)– CAP‐XX Ltd ‐ £0.1m (loss of £1.7m)– Gordon Dadds Group £64k (loss of £1.1m)

• Fund Sales £18.6m:

– iShares Core EM IMI UCITS ETF ‐ £4.5m (profit of £71k)– SSgA GBP Liquidity Fund ‐ £3.8m (profit of 3k)– JLP Credit Opportunity Fund £2.3m (profit of £0.3m)– Schroder ISF Asian Total Return Fund ‐ £2.2m (profit of £0.6m)– Argentiere Fund ‐ £1.7m (loss of £0.2m)– Global Event Partners £1.6m (profit of £0.2m)– Cantab CCP Core Macro Fund £1.3m (profit of £29k)– BlackRock European Hedge Fund ‐ £0.6m (profit of £0.2m)– Odey Absolute Return Fund ‐ £0.6m (loss of £54k)

15

HANSA TRUSTGlobal Equities – performance by size of holding 31 December 2017

Security NameInitial Purchase

Date

Value 31/12/17

(GBP)

% of Total NAV

% of Global Equity Silo

1 YearPerformance

(or since initial

purchase)

3 YearPerformance

(or since initial

purchase)

Hansteen Holdings PLC 25/11/2005 5,103,275 1.5% 10.0% 34.2% 59.3%

Interactive Brokers Group Inc 05/04/2017 3,282,636 1.0% 6.4% 56.9% 56.9%

Hilton Food Group PLC 23/04/2014 3,149,950 1.0% 6.2% 42.2% 142.1%

Berkshire Hathaway Inc 03/04/2017 2,930,514 0.9% 5.7% 9.9% 9.9%

Samsung Electronics Co Ltd 08/08/2017 2,879,444 0.9% 5.6% 10.0% 10.0%

UBM PLC 15/10/2010 2,840,843 0.9% 5.6% 5.6% 70.7%

CK Hutchison 01/12/2017 2,781,587 0.8% 5.5% ‐1.1% ‐1.1%

Alphabet Inc ‐ A Shares 18/04/2017 2,725,384 0.8% 5.3% 14.2% 14.2%

EXOR NV 05/09/2017 2,585,390 0.8% 5.1% ‐5.2% ‐5.2%

SoftBank Group Corp 08/05/2017 2,457,905 0.7% 4.8% ‐1.0% ‐1.0%

Liberty Global Plc 05/04/2017 2,118,865 0.6% 4.2% ‐7.3% ‐7.3%

Bayer AG 05/04/2017 2,072,053 0.6% 4.1% 1.2% 1.2%

Orion Engineered Carbons SA 17/07/2017 1,986,990 0.6% 3.9% 5.0% 5.0%

Howard Hughes Corp 10/04/2017 1,940,716 0.6% 3.8% 0.8% 0.8%

CBRE Group Inc 12/07/2017 1,920,905 0.6% 3.8% 11.2% 11.2%

White Mountains Insurance 11/04/2017 1,875,266 0.6% 3.7% ‐10.7% ‐10.7%

Nutrien 29/11/2017 1,829,955 0.6% 3.6% 4.0% 4.0%

CVS Health Corp 10/04/2017 1,822,147 0.6% 3.6% ‐12.3% ‐12.3%

Iridium Communications Inc 12/07/2017 1,308,397 0.4% 2.6% 2.8% 2.8%

Brooks Macdonald Group PLC 21/03/2012 1,168,294 0.4% 2.3% ‐0.2% 41.3%

NCC Group PLC 09/07/2004 1,109,946 0.3% 2.2% 31.7% 19.3%

TripAdvisor Inc 11/09/2017 1,069,559 0.3% 2.1% ‐24.9% ‐24.9%

Acertec Limited 10/05/2006 11,699 0.0% 0.0% 0.0% 8.7%

Total Global Equities Silo 55,418,822 16.5% 100.0%

Primary Exchange or Equity Index

FTSE 250, 15.6%

FTSE Small Cap, 10.7%

S&P 500, 20.5%NASDAQ,

16.8%

Russell 1000, 7.5%

Kospi, 11.1%

Nikkei 225, 4.8%

Borsa Italiana, 5.1%

DAX, 4.1% NYSE, 3.9%

HANSA TRUSTThe transition from UK Equities to Global as at end December 2017

Sales % of holding sold

Galliford Try 100%Experian 100%Cape 100%Hargreaves Services 100%Cairn Energy 100%Immupharma 100%Cap‐XX 100%RedT Energy 100%Goals Soccer Centres 100%Altitude 100%UBM 67%NCC 65%Hansteen Holdings 50%Brooks Macdonald 14%Hilton Food Group 0%Acertec 0%

Purchases Berkshire Hathaway Liberty GlobalInteractive Brokers BayerCVS HealthHoward Hughes CorpWhite Mountains Alphabet Softbank CBRE Group IncEXOR NVIridium Communications PLCOrion Engineered Carbons SASamsung Electronics Co LtdTripAdvisor IncNutrienCK Hutchison

Europe 41%

US40%

Asia 19%

Geographic Exposure by Listing

0%

2%

4%

6%

8%

10%

12%

World Index FTSE 100 Global Equities Performance

Performance 1 April 2017 to 31 December 2017

16

Portfolio Positioning & Characteristics

17

18

HANSA TRUSTCurrent Positioning (as at 31 December 2017)

13.2%

7.0% 6.4%

3.7% 3.2%1.1%

8.4%

4.1%

1.4% 1.6%3.8%

1.0% 0.5%

11.1%

6.9%

3.6%1.8%

19.8%

1.5%

0%

5%

10%

15%

20%

25%

19

HANSA TRUSTPortfolio Characteristics (as at 31 December 2017)

Look‐through analysis of Hansa Trust portfolio, including holdings in Ocean Wilson (Investments) Ltd*

Note: The exposures are based on the underlying holdings of the investments*Exposures in Ocean Wilson (Investments) Ltd. are based on the top 30 positions. These are subsequently grossed up to 100%.

41.3%

31.0%

15.1%

5.3% 3.6% 3.6%

Dealing Frequency

Daily > 1 year Monthly Quarterly Weekly Fixed Life Investment Period Complete

48.2%

19.8%

15.5%

6.9%

3.6% 2.7% 1.8%1.5%

Asset Type

Long Only Wilson Sons Direct Equities Market Neutral

Private Equity Long‐Short Fixed Income Cash

18.2%

14.0%

13.7%9.9%

7.7%

7.2%

6.5%

6.4%6.2%

4.6%2.4%

2.3% 0.8%

Sector Exposure

Information Technology Financials Consumer DiscretionaryDiversifying Hedge Funds Real Estate Health CareConsumer Staples Industrials MaterialsTelecommunications Energy Cash/Liquidity FundsUtilities

35.7%

13.4%11.3%10.5%

10.4%

9.6%2.9%

2.3% 2.3%1.5%

Geographic Exposure

North America Asia Pacific ex Japan UKDeveloped Europe ex UK Diversifying Hedge Funds JapanMiddle East & Africa Latin America Cash/Liquidity FundsEmerging Europe

20

HANSA TRUSTOther Portfolio Characteristics (as at 31 December 2017)

Weighted average management fee = 1.18%. This includes management fees paid to third parties and to Hansa Capital Partners LLP.

Cash2%

1 Week35%

1 month9%3 months

11%

6 months5%

> 6 months4%

Fixed34%

Liquidity

0%40.2%

0 < x ≤ 1%50.7%

1 < x ≤ 1.5%4.6%

1.5 < x ≤ 2%4.5%

Annual 3rd Party Management Fees on Underlying Holdings

The position in Ocean Wilsons Holdings Ltd is categorised as ‘fixed’ for liquidity purposes.

21

HANSA TRUSTDividend ProfileDividend Policy

The Trust’s dividend policy was updated in 2014, and it is now to pay two similar interim dividends each year.Barring unforeseen circumstances, the dividend is expected to grow over time reflecting the longer term returnsof the portfolio. Under certain circumstances a final extra dividend may be proposed.

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

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)

22

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%

Dec‐07

Jun‐08

Dec‐08

Jun‐09

Dec‐09

Jun‐10

Dec‐10

Jun‐11

Dec‐11

Jun‐12

Dec‐12

Jun‐13

Dec‐13

Jun‐14

Dec‐14

Jun‐15

Dec‐15

Jun‐16

Dec‐16

Jun‐17

Dec‐17

Hansa Trust Ord and A combined

Discount Look‐through discount

‐45%‐40%‐35%‐30%‐25%‐20%‐15%‐10%‐5%0%5%

10%

May‐08

Nov

‐08

May‐09

Nov

‐09

May‐10

Nov

‐10

May‐11

Nov

‐11

May‐12

Nov

‐12

May‐13

Nov

‐13

May‐14

Nov

‐14

May‐15

Nov

‐15

May‐16

Nov

‐16

May‐17

Nov

‐17

Hansa Trust Ord and A combined (relative to AIC overall average discount)

Discount Look‐through discount

Ocean Wilsons Holdings

23

24

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

25

HANSA TRUSTWilson Sons

Wilson Sons is among Brazil’s largest and oldest port, maritime and logistics services companies

Revenue EBITDA

26


Despite the challenges faced in Brazil in recent years, Wilsons has generated significant economic value

27


Wilson Sons operates in a market with significant structural growth potential

28

HANSA TRUSTOcean Wilsons Investments (Limited) as at 31 December 2017

Ocean Wilsons Investments (Limited) is an investment portfolio focused on achieving long‐term returns while emphasising capital generation and possessing an emerging market bias

13.3%

9.4%8.2%

6.5% 6.4%

3.0% 2.1% 2.0%

28.8%

3.2% 2.7% 2.3%1.0% 1.0%

6.6%

0.5% 0.4%2.6%

0%

5%

10%

15%

20%

25%

30%

Market Outlook

29

HANSA TRUSTMarket outlook…..a choppy to start to the year

…….markets raced ahead in January only to collapse in late January and early February. Net little change

30

Source: Bloomberg; MSCI

LC Returns as of 16 Feb 2018Start of year (1 Jan 2018) to Peak (26 Jan 2018)

Peak (26 Jan 2018) to Trough (9 Feb 2018) YTD

Equities ‐ RegionsMSCI ACWI + FM NR USD 7.3 ‐8.9 2.0MSCI World (Developed) NR USD 7.0 ‐8.8 1.8MSCI EM (Emerging Markets) NR USD 10.0 ‐10.2 3.7MSCI Frontier Markets NR USD 6.6 ‐6.0 3.5MSCI EM Asia NR USD 9.5 ‐10.5 2.1MSCI EM ex Asia NR USD 11.5 ‐9.4 8.0MSCI Europe NR EUR 2.9 ‐8.0 ‐2.2

Equities ‐ CountriesMSCI North America NR USD 7.2 ‐8.7 2.1MSCI United Kingdom NR GBP ‐0.2 ‐7.4 ‐4.7MSCI Japan NR JPY 3.8 ‐7.6 ‐3.8MSCI China NR USD 14.5 ‐13.4 5.9MSCI India NR INR 5.0 ‐5.7 ‐1.9MSCI Brazil NR BRL 12.5 ‐5.5 11.1MSCI Russia NR USD 12.3 ‐7.3 11.0Equities ‐ SectorMSCI ACWI Financials NR USD 8.5 ‐8.4 3.7MSCI ACWI Energy NR USD 7.2 ‐12.5 ‐3.3MSCI ACWI Information Technology NR USD 9.1 ‐9.1 5.0MSCI ACWI Health Care NR USD 9.1 ‐10.1 2.6MSCI ACWI Biotech NR USD 12.9 ‐10.6 5.5Fixed IncomeiBoxx USD Treasuries TR ‐1.2 ‐0.9 ‐2.3iBoxx USD Liquid IG ‐1.0 ‐2.0 ‐3.1iBoxx USD Liquid HY 0.8 ‐2.4 ‐0.6FTSE UK Gilts All Stocks TR GBP ‐1.7 ‐0.9 ‐2.5FTSE UK Govt Index Linked All Stocks TR GBP ‐2.0 ‐1.9 ‐3.4iBoxx GBP Non‐Gilts TR ‐0.6 ‐1.4 ‐2.0JPM GBI‐EM Global Diversified TR USD 4.7 ‐2.5 4.6JPM EMBI Global TR USD 0.1 ‐2.7 ‐2.2JPM Corp EMBI USD 0.1 ‐1.2 ‐1.0CommoditiesBloomberg Commodity Index TR USD 3.1 ‐5.6 0.2Gold Bullion USD 3.6 ‐2.5 3.4Copper Index USD ‐2.9 ‐5.2 ‐1.4European Dated Brent Index USD 5.1 ‐11.0 ‐3.0WTI Cushing CR USD 9.5 ‐10.5 2.1

HANSA TRUSTMarket outlook…..reasons for volatility

….the catalyst for the correction appeared to be disappointing inflation numbers. Certainly the market had started to bake in persistently low inflation but a key factor is also market complacency

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Source: FactSetSource: Deutsche Bank

HANSA TRUSTMarket outlook……correction or crash?

……under a wide range of valuation measures, equity markets are increasingly fully valued, especially the US stock market

0%10%20%30%40%50%60%70%80%90%

100%

P/E to Growth EV/Sales EV/EBITDA Price/Book Forward P/E FCF yield Cyclicallyadjusted P/E

Aggregate Index Historical Percentile

S&P500 STOXX600

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Source: Goldman Sachs


…….economic growth is largely improving in both developed and emerging markets. No sign of recession any time soon

33

Source: Deutsche Bank


…..stronger economic growth is feeding through to improved corporate profitability.

34

Source: Standard & Poors. Thompson Financial. FactSet. Credit Suisse


……clearly we are at an inflection point in the liquidity cycle but still a huge amount of liquidity is being pumped into the system. A significant jump in yields may limit equity returns

35


………some tentative signs that excess & exuberance are re‐entering the system but not at the extremes normally associated with a downturn

Arguments for….. Arguments against…..Pockets of consumer excess in areas such auto debt

Mortgage debt, which is far more important, is well under control

Overall country debt levels still high in developed economies and also in China

Banks are key to healthy economies and they appear well controlled

Some signs that retail investors are increasingly viewing equities as the ‘best asset class’

Investors still feel the pain of previous bear markets and are keen to forecast the next downturn

Volatility low Fund manager cash levels still high (4.7% on Merrill Lynch fund manager survey)

Bitcoin – market manias

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Excess & Exuberance

Global Financial Crisis Liquidity

pumped into the system via zero

interest rate policies and

QE

The avoidance of a global collapse in economies and the banking system saw valuations normalise across asset classes

Bond yields collapse through zero interest

rate policies and massive demand

via QE

Equities rise as investors forced up the risk spectrum in pursuit of returns

Liquidity cycle inflects

?


…..much has happened in this cycle. The question is, how close are we to the end?

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HANSA TRUSTPositioning……technology and innovation

38

……despite the strong performance, valuations remain attractive, especially if growth is taken into consideration. Tech has important implications geographically and for existing industries

Source: GAM. New RelicSource: Financial Times

HANSA TRUSTPositioning……emerging and frontier markets

39

…..EM and FM remain structurally attractive combined with lower valuations

Source: GAM. Statista Digital Market Outlook

HANSA TRUSTPositioning……bonds

…..bonds remain unattractive albeit we watch the current rise in yields

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Source: Financial Times

Equities57.5%

Directional Hedge Funds4.0% Private Equity

7.1%

Bonds2.2%

Cash1.8%

Hedge Funds (non

directional)7.6%

Wilson Sons19.8%

HANSA TRUSTSummary as at 31 December 2017

Riskier Assets

Lower Risk Assets

Strategic Allocation

…..we’re currently running 12% in defensive assets. We’re minded to progressively increase this albeit with the provision of identifying the right assets

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HANSA TRUSTConclusion

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• Clearly markets are in the more mature stages of their lifecycle

• Higher valuations remove the safety net and can lead to higher portfolio volatility and being susceptible to disappointment

• For this reason we are getting prepared to add to more defensive positions as the cycle evolves

• It is also the case though that for now we see continued upside in equities…….often the later, momentum stages of stock market cycles can represent powerful periods for performance

Appendix

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44

HANSA TRUSTPerformance of the different silos three years to 31 December 2017

0%

10%

20%

30%

40%

50%

60%

Core Regional Funds Global Equities Thematic Diversifying (ex OWHL) Ocean Wilsons HoldingsLimited

Cash/FX

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.

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Shareholder presentation Feb 2018 - hansatrust.com · 2 Hansa Trust is a proprietor based investment trust blending best‐in‐class third party funds, a global equity portfolio