polar capitals presentation
TRANSCRIPT
This presentation is for one-on-one use with non-US professional investors only
www.polarcapital.co.uk
Polar Capital Healthcare Opportunities Fund
October 2012
“Finding the growth opportunities in a changing healthcare world”
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 2
We See A Compelling Opportunity In Healthcare
• The resurgence of the healthcare sector has been unsung and largely unnoticed
– Healthcare has been an unloved sector – drug patent expirations, healthcare reform and government austerity have
together led investors to question the growth opportunities – recent interest has focused on defensive growth
• Underlying fundamentals have not changed and are still positive
– An aging population in the developed world will demand more healthcare and GDP growth is set to drive increased
healthcare spending in emerging markets
• We think healthcare systems across the world have begun a process of major structural change
– Technological innovation is the catalyst for what we think will be a “once in a generation” transformation
• Government austerity plans accelerate the need to reform the 20th century infrastructure
– Companies with products or services that deliver better healthcare for less will be able to grow despite a difficult
macroeconomic environment
• To take advantage of the investment opportunities we think you need to have a broad investment universe
– Healthcare investing is not about big drug stocks, our investment universe covers the entire value chain
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 3
40 Years of Relevant Healthcare Experience
Daniel Mahony Ph.D. – Fund Manager
Daniel joined Polar Capital to set up the healthcare team in 2007. He has more than 13 years’ investment experience in the
healthcare sector, with over 4 years as a Portfolio Manager and 9 years as a sell-side analyst. Prior to joining Polar Capital, he was
head of the European healthcare research team at Morgan Stanley, covering the European biotechnology, medical technology and
healthcare services sectors. He also previously worked in New York for ING Barings Furman Selz following the US biotechnology
sector. Before working in the investment field, Daniel worked as a research scientist for 7 years with the majority of his time at
Schering Plough Corporation in California. Daniel received his PhD from Cambridge University in 1995 and a first class honours
degree in biochemistry from Oxford University in 1991.
Gareth Powell CFA – Fund Manager
Gareth joined Polar Capital in 2007 to set up the healthcare team. He has over 12 years’ investment experience in the healthcare
sector, with 10 years as a portfolio manager. He joined Framlington in 1999 becoming a portfolio manager on the Framlington health
fund. In 2002, he helped launch and then run the Framlington biotech fund. Gareth became a CFA charter holder in 2003. Gareth
studied biochemistry at Oxford from 1995 to 1999 and during that time worked at Astellas, the Sir William Dunn School of Pathology,
the Wolfson Institute for Biomedical Research and the Oxford Business School.
Anna Sizova MBA – Analyst
Anna joined Polar Capital in February 2008 as an analyst for the healthcare team. She has over 5 year’s investment experience in
the healthcare sector that started with her time at Morgan Stanley as a healthcare analyst covering the European medical technology
sector. Prior to working in investment, she spent 5 years at Johnson & Johnson, working in both the marketing and finance
departments. Anna holds an MBA degree from the London Business School and a degree in Theoretical and Applied Linguistics
from Moscow State University.
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 4
Healthcare Fundamentals A long-term secular growth sector
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Aging Populations Point To A Key Inflection Point
• The first of the US baby-boomers reached retirement age last year
– The baby boomers expect a higher quality of life than their parents’ generation
• Developed markets will witness strong growth in demand for at least a decade
– We expect to see a large increase in chronic conditions associated with old age
Comparison of demographic trends Old-age dependency ratios (in percent)
We are in the middle of a significant change in demographics
Source: United Nations (2009), hhtp://esa.un.org/unpp.
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 6
• As developing nations get richer, healthcare becomes a spending priority
– We expect healthcare spending by the BRICS to increase from 4-6% to 7-9% of GDP over the next decade
Source: World Market Monitor, IMS, AstraZeneca.
Emerging Markets Are A Second Growth Driver
US (off scale) GDP/cap 47,369
Pharma spend/cap 954
Ph
arm
a s
pe
nd
pe
r
cap
ita
, U
S$
, 2
00
8
GDP per capita, US$, 2008
EM spending on healthcare is far below the developed world
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Controlling Costs Is A Long-Term Issue
• OECD health spending has been increasing well above GDP growth for the last decade
– We believe that this is unsustainable but an aging population creates upward pressure on budgets
• It would be politically “difficult” for a Western government to cut its healthcare budget
– But governments can change the way money is spent and we see a focus on improving efficiency
Governments need to manage the growth of health spending
Note: Social Security and Medicare projections based on the intermediate assumptions of the 2005 Trustees’ Reports. Medicaid projections based on CBO’s January 2004 short-term Medicaid estimates and CBO’s
December 2003 long-term Medicaid projections under mid-range assumptions.
Source: GAO unless otherwise stated. GAO analysis based on data from the Office of the Chief Actuary, Social Security Administration, Office of the Actuary, Centers for Medicare and Medicaid Services, and the
Congressional Budget Office.
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Innovation Is A Key Part Of Healthcare Investing
• Delaying the onset of Alzheimer’s by 5 years could save $447 billion by 2050
– We expect data on three new Alzheimer’s treatments over the next 18 months
Innovation is the only solution to long-term cost containment
Impact of treatment to delay AD onset on medical costs
Pro
jec
ted
me
dic
al s
pe
nd
ing
(in
Bil
lio
ns
)
Source: Alzheimer’s Association, “Changing the Trajectory of Alzheimer’s Disease: A National Imperative,” 2010 and innovation.org.
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Source: Centers for Medicare and Medicaid Services.
The Investment Strategy Has to Change
• Healthcare used to be about growing the size of the pie with little regard to cost
‒ We think less will be spent on people and buildings and more allocated to drugs, devices and technology
We think the mix of healthcare spending will change
6%
1960 2010
$29 billion $2,600 billion
9.5% CAGR 3 – 4% CAGR
10%
Drug spending Medical device spending
US Healthcare spending – greater use of innovative technology can reduce cost escalation
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Source: Polar Capital.
Major Structural Change Seems Inevitable
Transitioning to a 21st century healthcare system
Advances in Information Technology
Better understanding of
disease Devices with improved
functionality Healthcare IT
New drugs New
diagnostics
Improved
patient
management
Doctor/nurse
“in
the pocket”
Consumer
-isation
of healthcare
Productivity
in the
hospital
Technology helps move healthcare out of the hospital into cheaper cost settings
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 11
Healthcare Investing The Polar approach to healthcare investing
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Source: Polar Capital and Bloomberg, 31 August 2012. Past performance is not indicative or a guarantee of future results. Performance is quoted net of fees.
Polar Capital Healthcare Opportunities Fund
Growth portfolio
100%
Portfolio of 40 - 45 stocks
Projected portfolio
weighting 20 - 40% 20 - 60% 20 - 40%
Market cap US$1 - 5 billion >US$5 billion <US$1 billion
• The Polar Capital Healthcare Opportunities Fund (HOF) is an open-ended UCITS IV fund
– The sterling share class has delivered a 52.7% return from inception in December 2007 to 31 August 2012
• The Fund invests across healthcare sub-sectors, geographies and market capitalisations
– The investment style for the HOF is best described as Growth At a Reasonable Price (GARP)
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 13
• In the US, changes in healthcare insurance have made individuals more cost-conscious
– In particular, annual deductibles and co-pays have risen significantly over the last decade
• Even in Europe, some parts of healthcare are discretionary
– Most dental procedures are out-of-pocket and cosmetic procedures are more like luxury goods
Healthcare Universe And The Economic Cycle
Certain sub-sectors are more sensitive to the economic cycle
Cyclical Defensive
Discretionary
Cosmetic surgery
Dental
LASIK
Botox
Senior living
Elective
Hip implant
Sports medicine
Imaging
Diagnostics
Vaccinations
Acute/chronic
Diabetes
Heart surgery
Trauma
Oncology
Respiratory
Life science tools & services
Healthcare facilities
Managed care Medical devices
Pharmaceuticals
Biotechnology
Medical supplies
Healthcare distributors
Healthcare IT
Source: Polar Capital. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all recommendations made within the
immediately preceding 12 months is available up on request.
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 14
• Healthcare companies have to show that their products/services deliver value
– Companies can maintain pricing power if they add real value but the era of “me too” drugs and modest technical
improvements seems to have come to an end
• Inefficiency is a major problem in healthcare systems across the world
– Most healthcare systems reward volume not quality – we think reimbursement systems are beginning to change
• Innovation is the best way to improve quality and reduce costs
– We look to invest in companies with new drugs or technologies that can change the way medicine is practised or target
unmet medical needs
• Infrastructure is critical in both emerging markets and developed countries
– Countries such as China are at the start of building an integrated healthcare system while developed countries, such as
Germany, look to the private sector to cut costs
Value means improving outcomes and cutting costs
The Growth Drivers For Healthcare
The three “I”s of healthcare – addressing inefficiency
through innovation and infrastructure
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Healthcare Investing Identifying the near-term catalysts
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Source: Royal Bank of Canada, August 2012.
Healthcare Is Cheap And Has Rebounded
• Historically, healthcare has traded at a premium to the market
‒ The two exceptions are related to the election of a Democrat as US President
• Slowing top-line growth for pharmaceutical companies has not helped
‒ However, we believe that the catalysts are in place for a sector recovery
Price to book value: Healthcare/S&P 500 Index Price to forward earnings: Healthcare/S&P 500 Index
Long-term data suggest the potential for multiple expansion
1.0
1.5
2.0
2.5
3.0
3.5
Jan-80 Jan-83 Jan-86 Jan-89 Jan-92 Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10
Price-to-Book Value: Health Care / S&P500
Long-term Average
+1 STD
-1 STD
0.6
0.8
1.0
1.2
1.4
1.6
1.8
Jan-80 Jan-83 Jan-86 Jan-89 Jan-92 Jan-95 Jan-98 Jan-01 Jan-04 Jan-07 Jan-10
Price-to-Forward Earnings: Health Care / S&P500
Long-term +1 STD
-1 STD
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 17
Source: Bloomberg, 27 September 2012. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all recommendations
made within the immediately preceding 12 months is available up on request.
• Healthcare has been in a consolidating pattern for 15 years and is now breaking out
– We think the technical analysis is indicative of the major structural change that we see occurring
The Sector Is Breaking Out To New Highs
The healthcare resurgence has been unsung and unnoticed
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20
30
40
50
60
70
80
Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12
Obama
Republican
• If President Obama is re-elected then the expansion of healthcare provision will remain on track
– This will be a positive for hospitals and Medicaid managed care stocks
• The composition of the Senate is less certain but is critical for fiscal cliff discussions in 2013
– The concern is that healthcare spending may come under pressure when the fiscal deficit is addressed
US Election Will Be Important for 2013
Intrade odds for the US presidential election
President Obama is leading but Senate races are closer
Source: Intrade, Strategas, US Census Bureau, CBO, and WellPoint Investor Presentation.
Obamacare will extend healthcare coverage
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Healthcare Sector Drivers The return of the pharmaceutical industry
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• The focus on cost control creates an opportunity for operating leverage
– Management teams have started to eliminate waste and streamline their businesses
• The patent cliff may not be as deep as was initially feared
– Pfizer should deliver modest EPS growth as it passes through its patent cliff
Pharma May Exit The Patent Cliff In Better Shape
Consensus estimates suggest margin expansion Pfizer’s EPS trough is not that deep
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
2011E 2012E 2013E 2014E 2015E
Average Global Pharma
Y-Y EPS Growth
Average Global Pharma
Y-Y Sales Growth
Managements have prepared for upcoming patent expirations
$2.00
$2.10
$2.20
$2.30
$2.40
$2.50
$2.60
54
56
58
60
62
64
66
68
70
2011 2012E 2013E 2014E 2015E
Revenues EPS
Source: Bloomberg. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all recommendations made within the
immediately preceding 12 months is available up on request.
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 21
1.Source: Liberum Capital and Bank of America Merrill Lynch.
R&D Productivity May Be Starting To Improve
• We think that we may be at the beginning of a new wave of drugs
– We think the low level of productivity seen over the last decade may be a function of the innovation cycle – similar to the
fallow period seen in the 1970s
New
tri
als
sta
rted
in
a y
ear
0
200
400
600
800
1,000
1,200
1,400
2005 2006 2007 2008 2009 2010
Number of new phase I clinical trials starting per year (2005-10)1 Clinical development activity is increasing
Current valuations attribute little value to drug pipelines
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• Technology is the driver – it is now possible to sequence a human genome for $1,000
– The first human genome sequence cost over $1 billion back in 1999/2000
• After a decade of basic research, there is now a more detailed understanding of disease at the molecular level
– This means scientists have found new, and potentially better, ways of targeting disease
• The biotechnology sector is leading the way but pharmaceutical companies are not far behind
– Some made significant advances have been made in rare genetic diseases, cancer and inflammatory disease
• Diagnostics tests will be an essential of this new era of medicine
– Nearly all drug development programmes now incorporate a biomarker strategy to either select the right patients,
monitor drug activity or identify potential safety issues
• Companion diagnostics are already here – the era of personalised medicine has begun
– Qiagen launched two tests this year that determine whether a colorectal cancer patient is eligible to receive an
expensive cancer drug – saving money by targeting the right drug to the right patient
Genomics research is having a meaningful impact
A New Era of Drug Discovery And Development
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• We are seeing the benefits of increased R&D investment over the last few years
– We believe that innovation can provide companies with pricing power and reduce healthcare costs over the long term
• 2011 saw the launch of 12 new biotechnology blockbuster products
– We expect each of these to have a sales potential of >$500 million
The biotechnology sector is beginning to deliver on its promise
Biotechnology Is The Drug Discovery Engine
It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all recommendations made within the immediately preceding
12 months is available up on request.
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 24
Prostate Cancer – Treatment Is Changing
A number of new prostate cancer drugs are now available New drugs are expected to be used earlier in the progression of the disease
Source: William Blair.
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Source: Bloomberg, 4 September 2012. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all recommendations
made within the immediately preceding 12 months is available up on request.
• Bristol Myers’ clinical pipeline success has been rewarded
– In our view, Bristol Myers is the only pharma stock with significant pipeline value
The Promise Of Growth Is Being Rekindled
Positive pipeline news can still drive stock performance
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Healthcare Sector Drivers The key themes for growth
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Improving Efficiency In The Service Sector
• Accountable care and evidence-based medicine are the new buzz words
– We are seeing similar trends across all developed and developing markets
• These changes have a massive impact for the entire healthcare value chain
– All companies, whether they sell products or services, will need to focus on delivering value
Reimbursement systems will reward quality and not volume
Source: UnitedHealth and ACO management. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all
recommendations made within the immediately preceding 12 months is available up on request.
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 28
Source: Edwards LifeSciences and Polar Capital. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all
recommendations made within the immediately preceding 12 months is available up on request.
Innovation Can Change Medical Practice
• The move to minimally invasive surgery eliminates significant hospitalisation costs
– After only three years, we expect European sales to reach $250 million in 2012
Edwards has pioneered a novel approach for heart valves
Edwards’ SAPIEN eliminates the need for open heart surgery
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Source: Cerner and CMS. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all recommendations made within the
immediately preceding 12 months is available up on request.
• As part of the 2010 stimulus package, the US will spend $36 billion from 2010-2015 on healthcare IT
– The US is a long way behind the rest of the world but looks set to overtake in the hospital setting
• IT will enable not only better cost management but also the “consumerisation” of healthcare
– There are many “easy” gains to be made from implementing IT systems – i.e. on-line booking of appointments
– Ultimately, we see the potential for making individuals more responsible for their own care
Healthcare IT is a critical driver of change in healthcare
The Healthcare IT Era Has Just Begun
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• We see smaller medical device companies as the engine of innovation
– New technologies target niche markets and provide pricing power and growth opportunities
• We are seeing a transition towards products that help doctors manage and not just treat disease
– This could mean new sources of revenue and erect new barriers to entry
The Device Industry Continues To Innovate
Advances in chip technology drive new types of innovation
Source: Polar Capital. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all recommendations made within the
immediately preceding 12 months is available up on request.
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 31
Source: CMS and Barclays Capital. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all recommendations made
within the immediately preceding 12 months is available up on request.
• Medicare Advantage programme began under President Bush but penetration is still low
– We see Humana and UnitedHealth as the best-positioned to take advantage of this move from fee for service to
managed care
• Moreover, the so-called dual eligibles are expensive to treat and could create a huge market opportunity
– This could be a $300 billion opportunity compared to the current health insurance market of $600 billion
The US Govt is using commercial health insurers to save cash
Managed Care Is A Solution
Various revenue opportunities in managed care (as of 30 Jan 2012 $bn)
$bn
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Polar Capital Healthcare Opportunities Fund
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Portfolio As Of 31 August 2012
Biotechnology
(24%)
Large-cap Small-cap Mid-cap
Pharmaceuticals
(24%)
Medical Devices
(24%)
Services
(27%)
Source: Polar Capital. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of securities in this document. A list of all recommendations made within the
immediately preceding 12 months is available up on request.
Allergan
Astellas
Johnson & Johnson
Pfizer
Jazz
UCB
Alexion
Biogen Idec
Celgene
Gilead
Actelion
Biomarin
Cubist
Incyte
Medivation
Onyx
Threshold
Agilent
Covidien
Edwards Lifesciences
Cooper
Heartware
Perkinelmer
Asahi Intecc
Cyberonics
Dexcom
Endologix
Insulet
Spectranetics
Express Scripts
UnitedHealth
Advisory Board
Air Methods
AmerisourceBergen
Brookdale Senior Living
Catamaran Corp
HMS Holdings
Wellcare
Acadia Healthcare
AmSurg
Synergy Healthcare
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Investment Process – Filter / Due Diligence / Risk
US Europe RoW
Pharmaceuticals
Biotechnology
Medical Devices
Services
> 2,900 global healthcare companies
70 potential stock ideas
Industry contacts
Industry periodicals
Company meetings
Broker contacts
Identify companies
that meet our
opportunity criteria
Gareth Powell
Daniel Mahony
Anna Sizova
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1. The operating leverage impact of new products can be underestimated
– Detailed financial modelling can reveal the effect of a new product on operating margins and is also important when assessing
the potential negative impact of competition
2. A longer investment horizon to exploit the time-value proposition of healthcare
– Given the long development times and product cycles in the drug and device industry, product candidates in early
development are often under-valued
3. Specialist or niche markets are regularly overlooked by investors
– Small markets can create a significant commercial opportunity for a mid-sized company
4. M&A activity is often under-rated by the market
– M&A has been shown to drive long-term value for some healthcare companies but is often not reflected in the initial stock
reaction to the news
5. New technologies can generate significant investor returns
– Healthcare relies on innovation and so keeping abreast of new breakthroughs creates an opportunity to profit from increased
awareness of a new drug, device or technology
6. Geographical and sector anomalies in valuation
– US healthcare companies are often priced at a premium to global peers, especially in sectors such as biotechnology
Investment opportunities
Stage 1 – Primary Filter
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Stage 2 – Due Diligence – Stock Picking
Physician and consultant network
Company meetings and site visits
Investor conferences
Medical meetings
45 candidates for the portfolio
Valuation
• We have developed proprietary valuation
algorithms for biotechnology companies
• We prefer fundamental valuation approaches
such as DCF and residual income
• We use peer group analysis – such as P/E,
PEG and EV/EBITDA – to help identify good
entry and exit points
Detailed financial models
• We build detailed market models when
appropriate – the physician network is critical
for gaining insights here
• Sensitivity analysis is important for stress
testing assumptions
• We maintain our own P&L, Balance sheet and
cash flow models
70 potential stock ideas
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 37
We will manage the risk/reward profile of the portfolio • Our multi-cap approach should generate superior risk-adjusted returns versus the healthcare index
– The portfolio comprises three “conceptual buckets” based on the expected holding period
– We want to exploit the long-term upside potential of small-cap stocks but risk and volatility are high
– Mid and large-cap stocks have greater liquidity but anomalies in valuation tend to be shorter duration
Stage 3 – Risk Management
Portfolio of c. 45 stocks
Expected holding
period 12 – 24 months 3 – 12 months 1 – 5 years
Market cap US$1 - 5 billion >US$5 billion <US$1 billion
Estimated portfolio
weighting 20 - 40% 20 - 60% 20 - 40%
Potential reward
Risk
Market Capitalisation
Liquidity
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 38
• Overview
– Number of holdings 40-45 stocks
– Top 10 holdings c. 40% of portfolio
– Benchmark MSCI World AC Healthcare
– Max. position size 10% of NAV
– Geographic Exposure Global
– Use of derivatives Tactical Protection
• Independent risk control process managed by Chief Risk Officer
– Independent of portfolio managers
– Risk profile of each fund assessed at a monthly Risk Management Committee
– Ensures risk managed relative to the investment objectives of Polar Capital’s clients
Portfolio Construction
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 39
Polar Capital was
established in 2001 and
has $5.1bn AUM, with
85 employees.
The Firm was listed on
the London Stock
Exchange (AIM) in
February 2007. The
Firm offers managers a
level of infrastructure
and corporate
governance normally
found in much larger
organisations.
As at 29 June 2012
Polar Capital Overview
Ownership
Business infrastructure
• Distribution and marketing
• Operational support
• Risk management
• Compliance
• Technology
• Finance
Management
Tom Bartlam
Non-Executive Chairman
Tim Woolley
CEO/Co-Founder
John Mansell
Chief Operating Officer
42%
10%
14%
34%
$5.1bn
Polar Capital
XL
Caledonia
Free Float
Total assets under
management Strategies Fund managers AUM
Technology Ben Rogoff
Nick Evans
2 funds
$1,309m
Japan James Salter
Gerard Cawley
$1,533m
UK Philip Hardy 2 funds
$257.2m
European Robert Gurner
Andrew Marsh
2 funds
$612.1m
Healthcare Dan Mahony
Gareth Powell
2 funds
$384.3m
Financials John Yakas
Alec Foster
Nick Brind
4 funds
$494.0m
Emerging Market
William Calvert 2 funds
$165.9m
Convertibles David Keetley
Stephen McCormick
$38.7m
North American Andrew Holliman
Richard Wilson
$260.6m
European MN Ton Tjia
2 funds
$26.3m Source: Polar Capital.
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 40
House View
This document has been produced based on Polar Capital research and analysis and represents our house view. All sources are Polar Capital unless otherwise stated.
Important Information
The information provided in this presentation is for the sole use of those attending the presentation it shall not and does not constitute an offer or solicitation of an offer to make an investment into any fund managed
by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital and is not intended for private investors.
This presentation is only made available to professional clients and eligible counterparties. Shares in the fund should only be purchased by professional investors. Any other person who receives this presentation
should not rely upon it. The law restricts distribution of this document in certain jurisdictions, therefore, persons into whose possession this document comes should inform themselves about and observe any such
restrictions.
This document does not provide all information material to an investor’s decision to invest in the Polar Capital Funds Plc – Healthcare Opportunities Fund, including, but not limited to, risk factors. For more
information, please refer to the fund’s offer document and read it carefully before you invest.
Statements/Opinions/Views
All opinions and estimates in this report constitute the best judgment of Polar Capital as of the date hereof, but are subject to change without notice, and do not necessarily represent the views of Polar Capital. Polar
Capital is not rendering legal or accounting advice through this material; readers should contact their legal and accounting professionals for such information.
Third-party Data
Some information contained herein has been obtained from other third party sources and has not been independently verified by Polar Capital. Polar Capital makes no representations as to the accuracy or the
completeness of any of the information herein. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations
with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular
purpose with respect to any of such data.
Holdings
This portfolio data is “as of” the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the fund. The holdings may represent only a small percentage of the
aggregate portfolio holdings, are subject to change without notice, and may not represent current or future portfolio composition. Information on particular holdings may be withheld if it is in the fund’s best interest to
do so. A complete list of the portfolio holdings may be made available upon request. It should not be assumed that any of the securities transactions or holdings discussed was or will prove to be profitable, or that
the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein. The information provided in this document should
not be considered a recommendation to purchase or sell any particular security.
Benchmarks
The following benchmark index is used: MSCI All Country World Index/Healthcare. These benchmarks are generally considered to be representative of the Global Healthcare market universe. These benchmarks are
broad-based indices which are used for comparative/illustrative purposes only and have been selected as they are well known and are easily recognizable by investors. Please refer to www.mscibarra.com for further
information on these indices.Comparisons to benchmarks have limitations because benchmarks have volatility and other material characteristics that may differ from the fund. For example, investments made for the
fund may differ significantly in terms of security holdings, industry weightings and asset allocation from those of the benchmark. Accordingly, investment results and volatility of the fund may differ from those of the
benchmark. Also, the indices noted in this presentation are unmanaged, are not available for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the fund
may incur. In addition, the performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences
when evaluating the comparative benchmark data performance. The information regarding the indices are included merely to show the general trends in the periods indicated and is not intended to imply that the fund
was similar to any of the indices in composition or risk.
Polar Capital
4 Matthew Parker Street
London SW1H 9NP
Important Information
For non-US professional investor use only. Please refer to the Important Information at the end of this presentation. 41
Regulatory Status
This document is Issued in the UK by Polar Capital.
Polar Capital LLP is a limited liability partnership number OC314700. It is authorised and regulated by the UK Financial Services Authority (”FSA”) and is registered as an investment adviser with the US Securities &
Exchange Commission (“SEC”). A list of members is open to inspection at the registered office, 4 Matthew Parker Street, London SW1H 9NP.
Information Subject to Change
The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Forecasts
References to future returns are not promises or even estimates of actual returns Polar Capital may achieve, and should not be relied upon. The forecasts contained herein are for illustrative purposes only and are
not to be relied upon as advice or interpreted as a recommendation. In addition, the forecasts are based upon subjective estimates and assumptions about circumstances and events that may not yet have taken
place and may never do so.
Performance
Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions. Many factors affect fund performance including changes in market conditions and interest
rates and in response to other economic, political, or financial developments. Investment return and principal value of your investment will fluctuate, so that when your investment is sold, the amount you receive could
be less than what you originally invested. Past performance is not a guide to or indicative of future results. Future returns are not guaranteed and a loss of principal may occur. Investments are not insured by the
FDIC (or any other state or federal agency), are not guaranteed by any bank, and may lose value.
Investment Process - Risk
No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable. Investors may lose all of their investments.
Allocations
The strategy allocation percentages set forth in this document are estimates and actual percentages may vary from time-to-time. The types of investments presented herein will not always have the same comparable
risks and returns. Please see the private placement memorandum for a description of the investment allocations as well as the risks associated therewith. Please note that the fund may elect to invest assets in
different investment sectors from those depicted herein, which may entail additional and/or different risks. The actual performance of the fund will depend on the Investment Manager’s ability to identify and access
appropriate investments, and balance assets to maximize return to the fund while minimizing its risk. The actual investments in the fund may or may not be the same or in the same proportion as those shown herein.
Polar Capital
4 Matthew Parker Street
London SW1H 9NP
Important Information Cont.