FinTech Catalyst

Inception Date:

Investment Philosophy

The FinTech Catalyst strategy is an actively managed portfolio that seeks to achieve capital appreciation by identifying mispriced securities primarily in financial services, equity REITs, fintech, and technology vendors. Security selection is driven by a six-step process with a checklist based approach. The investment team seeks to find companies that trade at attractive valuations, have strong management teams, sound prospects for growth, and measurable catalysts that can close the gap between current public market valuation and its estimate of intrinsic value. These catalysts include merger and acquisition potential.

Differentiated profile characteristics of the FinTech Catalyst strategy:

  • Outperformed the S&P 1500 Financials, S&P Regional Banks Select Industry, and KBW Nasdaq Bank Indices by 21.9%, 34.2%, and 31.1%, respectively, since the strategy's inception (5/31/2015)*
  • 17 announced acquisitions in the 16 quarters since inception
  • Ranked as a top performing manager in the Morningstar Financial Separate Account category by Pensions & Investments Magazine**
  • Concentrated style with the top 10 holdings representing appox. 50% of the strategy's assets

*Cumulative returns based on gross of fee performance. As of June 30, 2019. **As of March 31, 2019, online publication date May 13, 2019.

 

Important Disclosures
The performance results presented above are prior to the deduction of actual investment advisory fees (“gross of fees”) which includes reinvestment of income. Full composite and important “gross of fees” disclosure information can be found at the back of this presentation. Information for the referenced strategy represents a single account within the composite, not all accounts may have the same allocation. Past performance is no guarantee of future results. This information supplements the Penn Capital Financial Services Composite, which can be found at the end of this presentation. Source: Morningstar Direct. Inception: 5/31/2015, Performance is annualized for multi-year periods.
The S&P Regional Banks Select Industry Index comprises stocks in the S&P Total Market Index that are classified in the GICS regional banks subindustry. For comparison purposes, the Index is a fully invested index, which includes reinvestment of income. The S&P Regional Banks Select Industry Index returns are provided to represent the broad investment environment of the banking industry which is an area of focus for the FinTech Catalyst strategy.
The KBW Bank Index is designed to track the performance of the leading banks and thrifts that are publicly traded in the U.S. For comparison purposes, the Index is a fully invested index, which includes reinvestment of income. The KBW Bank Index returns are provided to represent the investment environment of the banking industry which is an area of focus for the FinTech Catalyst strategy.
Index comparisons have limitations because indexes have volatility and other material characteristics that may differ from a particular investment.
The FinTech Catalyst strategy invests in financial services, equity REITs, fintech, and technology vendors. Security selection is driven by a six-step process with a checklist based approach. The investment team seeks to find companies that trade at attractive valuations, have strong management teams, sound prospects for growth, and measurable catalysts that can close the gap between current public market valuation and its estimate of intrinsic value. These catalysts include merger and acquisition potential. The FinTech Catalyst strategy constitutes a carveout of the total portfolio of Penn Capital’s Financial Services Composite. Suhail Chandy took management of this carveout as of 5/31/15. The Penn Capital FinTech Catalyst strategy represents a single account within the Financial Services Composite. Not all accounts may have the same allocation.  This was seeded with cash, and the analysis represents the performance of this mandate since the 5/31/15 inception. Cash is allocated for this carveout separately. Additional information regarding policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.