Euromoney: creating growth through digital innovation Christopher Fordham Managing Director
DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Introductions
• Christopher Fordham, Managing Director • Ben Jones, Chief Technology Officer • Bashar AL-Rehany, CEO, BCA Research • Simon McLoughlin, Managing Director, Institutional Investor Digital Products • Q&A
2 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Improved quality of earnings / cash flow
Euromoney’s revenue by type
2003 2013 Other 6% Other, 3% Advertising Delegates, Advertising , Delegates, 21% 36% 19% 14%
Sponsorship, Subscriptions 13% Subscriptions , 29% 51%
Sponsorship 8%
2003 2013 CAGR Revenue £m 158.9 404.7 10% Adjusted PBT £m 21.3 116.5 19% Digital as % of total 10% 53% revenue
3 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Euromoney’s digital future
• BCA Research and Global Capital launched on Delphi in spring 2014 • Every step guided by client research and user-groups • Roll out Delphi across the company • New Delphi products being launched – Three new BCA products – RMB (Global Capital) – Other products in beta e.g. Co-Co Analytics, Capacity Intelligence, Insurance • Delphi development so far: on time, on budget, high quality – Capital investment in Delphi platform of £10m – Annual cost including depreciation and running costs of c.£4m – Further investment based on future business plans
A SUSTAINABLE COMPETITIVE ADVANTAGE 4 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Delphi: group-wide content platform
• Increase the value of our content with enhanced personalisation and discoverability • Facilitate the repurposing of existing content and data using semantic tagging, search and aggregation • Increase speed to market for new products • Enhance product value by embedding in customer workflows • Generate cost and production efficiencies
TRANSFORMATIONAL TECHNOLOGY INVESTMENT
5 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Transformational Technology Investment Ben Jones Chief Technology Officer
6 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC What is Delphi?
• Group-wide content platform Presentation providing: – An intuitive authoring interface – Greater editorial control Search Semantic – Structuring the unstructured – Automated semantic tagging – Enhanced search Storage – Personalisation and alerting – Mobile responsive Authoring • A vehicle for change
7 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Semantic Web
Federal Reserve 8 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC GlobalCapital
– 12-month project live in Feb 2014 – Merged 3 existing products into 1 – New authoring and content management – Responsive design – Personalised email alerts with campaign tracking – New channel added in 6 weeks The Results – Editorial buy-in – Overall site visits up by more than a third year-on-year – Dwell time now averaging 10 mins – Overall trials nearly tripled – Mobile from zero to nearly a quarter of traffic – New RMB channel already being upsold
9 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Next Steps
1. All remaining publishing sites live on authoring component by end FY15 2. Replace proprietary search component across existing sites by end FY15 3. Product launches for: • Institutional Investor • Euromoney • Metal Bulletin 4. All products live on all components by end of FY16 5. Common linked data
Helping drive a digital-first, content and data-led strategy
10 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Research – A Digital Transformation
Bashar AL-Rehany CEO
11 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Snapshot
Established in 1949 and based in Montreal BCA is the leading provider of global independent macroeconomic research and investment advice Employs 150 staff globally 16 Managing Editors and 50 research analysts 17 Services/Products Clients in 90 countries; 54% in the Americas, 36% in EMEA and 10% in Asia 66% of the revenue comes from subscribers who have been with BCA over 5 years
12 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC The Journey
The Beginning The Transition The Future (Content) (Client Relationships) (Innovation) Hand-plotted charts CRM systems Semantic content Post reports Online reports Digital products Faxed reports Emailed reports Interactive charts Desktop computers Mobile Apps Intelligent search
1949
13 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Innovation Phase
Content Products Digital Products Emerging Markets Bonds BCA Edge a content Foreign Exchange dashboard Equities Frontier Markets BCA Analytics Equity Sectors interactive Financials charting Technology Healthcare Energy Interactive Websites Stocks Trading Strategy
14 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Delphi impact on digital transformation
Utilising Delphi technology to unlock the value of BCA’s content
Deconstructing research with semantic searches Enhancing content with ease of discovery, consumption and intuitive user interfaces Increasing interaction, collaboration and co-creation Creating new products from existing content Extracting value from long tail
15 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Edge - a content dashboard
The traditional PDF is no longer the only method to deliver BCA content
16 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Edge - a content dashboard
Powerful Semantic Tagging And Search Reconstructing the content through semantic tagging according to Themes Views Trades Asset allocation recommendations Charts
Search Entire content of over 120,000 tagged research elements since 2008 Intelligent auto suggest Extensive semantic filters
17 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Semantic Tagging and Search
18 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Market Views And Themes
Personalised Views Visually identify BCA view on a market or economy Automatic and continuous view updates Clarity and transparency Always one step away from the research
View Evolution Visual representation of view analysis on markets and asset classes Clear and easy illustration of historical changes over time Ability to export BCA views Ability to compare views on different markets and asset classes Immediate access to relevant reports
19 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Edge - a content dashboard Personalised Views The filtered BCA Views are available on one screen per individual client need
20 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Edge - a content dashboard
View Evolution
Each blue square represents a research report that discusses a specific view. Clients can review and open the report.
21 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Edge - a content dashboard
The All Investment Recommendations Page
22 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Edge - a content dashboard The All Research Page
23 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Edge - a content dashboard
Semantic Search Graph
Visually understanding the connection between themes, views and markets Unique way of navigating through the research content Quick and easy access to relevant content
24 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Edge - a content dashboard
Semantic Search Graph
25 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Analytics - interactive charting
Interactive Charting
Fully interactive and customisable Powerful set of functions Semantic discovery & search Daily data updates and maintaining relevance of the insights Designed to fit into client workflow
26 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC BCA Analytics - interactive charting
Interactive Charting
27 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC What does it all mean?
Achieving growth through Improving retention rates Increasing new sales to new clients Increasing revenue per client Creating new products
Competitive advantage New vertical opportunities Consolidating our position as the sector leader
Client Feedback • “This is powerful; none of your competitors are doing this.” • “BCA has created something very special.”
28 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Simon McLoughlin Managing Director
29 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Overview
Bringing together the world’s largest investors
• An online network that brings together institutional investors and asset managers from around the world …
• …in two separate but linked digital communities that allow them to connect, share knowledge and put capital to work
30 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Overview
We see Asset Owners every year at 100 events in 23 countries
Kuwait Investment Summit Japan Investment Forum KUWAIT CITY TOKYO European Investment International Trader Forum Roundtable BERLIN COPENHAGEN Family Office Wealth UAE Global Investment Conference Forum LAGUNA BEACH, CA. LONDON India Investment Forum NEW YORK CITY Saudi Arabia Institutional Investor Forum Access & Trust RIYADH Alternative Investor Institute Consultant’s Roundtable Sovereign Institute – Africa CHICAGO Funds Roundtable CAPE TOWN LatAm TraderForum RIO DE JANEIRO Asia Institute CEO UAE Global Investment roundtable Forum SINGAPORE ABU DHABI
31 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Overview
A digital disruptive technology
• A private, online network connecting buyers, sellers and intermediaries in asset management……displacing some consultants and placement agents in a $71 trillion market
• A technology business that gives investors sophisticated tools to deploy capital
• IIN launched in January 2011 with 48 funds
32 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Overview
Online communities provide the foundation
Investor Intelligence Network Manager Intelligence Network
Requests For Information (RFIs) A flow of mandates • 1,633 Institutions • 744 Asset Managers • CIOs/Senior Investors • Sales Heads • 98 countries • 32 countries • $24.4 trillion assets • 2,216 users • Av. AUM = $27 billion • Min. AUM = $1 billion • Min. AUM = $500 m
33 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Investor Members
A unique worldwide network of capital…
783 606 Institutions Institutions 195 Institutions 49 Institutions
* Data accurate on 2nd September 2014.
$7.1 $114 $8.2 $9.0 Trillion Billion Trillion Trillion 34 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Investor Members
… and the most senior, hard-to-reach Allocators
+$27 bn 2,516 98 >$1 bn Average Investment Min Asset AUM Officials Countries Owner AUM of Each Member
69% CIOs or Heads of Portfolios, such as equities
* Data accurate on 2nd September 2014.
35 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Usage
How usage has grown over the past year
Page Views Unique Visitors 40000 3000 35000 2500 30000 25000 2000 20000 1500 15000 1000 10000 5000 500 0 0 May 2013 May 2014 May 2013 May 2014 Month Month
Weekly returning Number of Visits visitors* 7000 100% 6000 80% 5000 60% 4000 40% 3000 20% 2000 0% 1000 May 2013 May 2014 0 Month May 2013 May 2014 *Percentage of returning visitors who revisit the site within seven days Month of their previous visit 36 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Usage
How usage has grown over the past year
Page Views Unique Visitors 40000 3000 35000 2500 30000 25000 2000 20000 1500 15000 1000 10000 5000 500 0 0 May 2013 May 2014 May 2013 May 2014 25% of AssetMonth Owners > $1bnMonth use the Weekly returning Number of Visits visitors*platform monthly7000 100% 6000 80% 5000 60% 4000 40% 3000 20% 2000 0% 1000 May 2013 May 2014 0 Month May 2013 May 2014 *Percentage of returning visitors who revisit the site within seven days Month of their previous visit 36b DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Usage
Share knowledge & collaborate privately…
US Public Fund $290 billion
More informed decisions through a wider array of data points
Saudi Arabian Fund $740 billion 37 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Usage
…and allocate capital and co-invest
1. Public Securities (RFI Service)
2. Private Markets – Data & Subscription Rooms
38 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Investor Members
Benefits of an online community approach…
Provides digital fingerprint of every Asset Owner, so we know who is interested in what, when...
… which means we can make targeted introductions to managers, vendors and third-party online services
39 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Strategy
Our vision: the leading digital platform
Create the leading digital platform connecting Asset Owners, Asset Managers and Intermediaries – an online ecosystem that helps institutional investors deploy capital effectively. We monetise by:
1. Capital introduction: helping investment managers and private market deal sponsors raise institutional capital worldwide. We will make the platform a regulated entity in order to charge bps.
2. Data products: harvesting peer data to turn into subscription products that we sell to Asset Managers and investors.
3. Platform fees: distributing a curated bench of high-value digital services to Asset Owners in return for tenancy fees and a share of revenues.
40 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Capital Introduction
A promising start: capital placed through RFI
$15.6 bn $6.7 bn 2,326 121 Total value of Proposals Total value of mandates searches posted Searches sent over the awarded Network
* Data accurate on 2nd September 2014
41 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Capital Introduction
We will charge on capital placed…
1. RFI: In funds of public securities, we may charge a percentage of the winning manager’s first-year fee. On a $500 million EME search, our fee would be a substantial six-figure sum.
2. In private markets – PE, Real Estate etc – we will charge a certain number of bps on capital placed. Even on a ‘small’ $100 million private placement, our fee would be a substantial six figure sum.
42 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Capital Introduction
Why do Asset Owners use IIN’s RFI Service?
• Direct access to a global pool of manager talent especially boutiques not normally on consultant buy-lists
• Anonymity – only Country/Size/Fund Type disclosed
• Less hassle – answer questions via Blog, not hundreds of calls
43 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Capital Introduction
RFI: How the Asset Owner creates an RFI…
Digital form gives time and efficiency gains…
• Notify all, or select managers.
• Set your investment criteria.
• Remain anonymous.
44 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Capital Introduction
RFI: What you see as a manager…
What you see as a manager… Track your replies. Told if mandate is exclusive to MIN.
45 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Capital Introduction
… ask questions to refine your proposal
Click here to ask the investor questions and get information to tailor your mandate.
46 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Capital Introduction
Asset Owners can compare proposals easily
47 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Capital Introduction
What Investors Say About RFI
'You can tell the service was designed by pension funds. It solves the basic problem we all face: how do we handle manager searches efficiently, spending our resources as effectively as possible? The platform saved us a lot of time.’ Fund Manager, Equities, Multi-Employer Pension Fund, The Netherlands
'Using Institutional Investor’s RFI Service was a great experience for us. It enhanced our manager selection process by uncovering relevant managers, including some interesting ones that were previously unknown to us.’ Investment Manager, Multinational Telecommunications Company Pension Fund, UK
'The RFI Service was easy to use and helped our group quickly identify managers that met the criteria for our search.’ Manager Selection Analyst, Corporate Pension Fund, United States
48 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Capital Introduction
One of the world’s most sophisticated Asset Owners…
‘We use RFI to find managers for our hedge fund portfolio. The advantages of the RFI Service over our other origination processes are threefold:
1. We control the customisation of the mandate. 2. Anonymity. 3. Interactive Q&A about the mandate.
The RFI tool acts as an effective filter that has led to a more targeted and effective origination process for us.’
Daniel MacDonald Portfolio Manager, Alternative Investments Ontario Teachers' Pension Plan
49 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Data Products
Data products: the core of our freemium model
• Users can access basic platform for free
• Pay to access high-value datasets, such as FeeScan
• Pricing power...a 1 bps increase in fee on a $100 million mandate gives $10,000 a year in either savings (Asset Owners), or profits (Asset Managers)
• Sell to captive user group of circa 3,000 firms
50 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Data Products
FeeScan: analysis of fee spread and value
51 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Summary
Preferred digital venue for Asset Managers
• The only digital venue that brings together CIOs from Asset Owners worldwide
• Well placed to become the preferred digital distribution channel for investment managers
• A highly scalable business with the potential for multiple product extensions
52 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Euromoney’s digital strategy is progressing well
• Successful development and implementation of Delphi, a transformative new content platform
• Investor Intelligence Network is another exciting and innovative initiative for Euromoney
• Confident of long-term success through digital innovation
54 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC Q&A
55 DMGT Investor Briefing September 2014 © 2014 Euromoney Institutional Investor PLC