Polar Capital Technology Trust
Full-year results presentation
11 July 2017
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
1
Results As At 30 April 2017
Year ended
30/04/16
Year ended
30/04/17
Change
(y/y)
£801,307,000
£1,252,525,000
+56.3%
NAV per ordinary share
605.51p
945.39p
+56.1%
Price per ordinary share
566.00p
947.00p
+67.3%
Net Assets
Benchmark Change
Ordinary shares in issue
+53.4%
132,336,159
132,487,000
+ 0.1%
Source: Polar Capital, 30 April 2017.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
2
PCT As At 30 June 2017
Year ended
30/04/16
Year ended
30/04/17
Change
(y/y)
As at
30/06/17
£801,307,000
£1,252,525,000
+56.3%
£1,309,031,500
NAV per ordinary share
605.51p
945.39p
+56.1%
986.00p
Price per ordinary share
566.00p
947.00p
+67.3%
969.00p
Net Assets
Benchmark Change
Ordinary shares in issue
+53.4%
132,336,159
132,487,000
+ 0.1%
132,762,000
Source: Polar Capital, 30 June 2017.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
3
Full Year Review
DJ World Technology vs. FTSE World TR since Apr 2016
• Global equities (FTSE World + 30.7%)
enjoyed a banner year due to the
combination of earnings growth and
ongoing valuation expansion, particularly
post the US Presidential elections.
• Once again, Sterling weakness (-12%/7%/-8% vs. Dollar / Euro / Yen) was a key
contributor to returns due to Brexit.
• Technology stocks significantly
outperformed (DJ World Tech +53.4% in
Sterling terms) due to superior earnings
growth and a valuation re-rating following
the weak start to CY17. This healing
process was aided by record M&A activity.
Source: Bloomberg, 5 July 2017
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
4
Full Year Review
US technology small caps vs. large caps since Apr 2016
• Small-cap US technology stocks modestly
outperformed during the year (c. 2%) due to
Trump-related strength that largely
unwound during the final third of the year.
• NAV performance (+56.1%) exceeded the
benchmark by 2.7%.
• New technology cycle appears to have
entered a more pernicious phase now that
c. 20% of workloads have migrated beyond
the enterprise. This is likely to prove ‘the
beginning of the end for traditional IT’ with
disruption likely to prove significantly
greater than witnessed thus far.
Source: Bloomberg, 5 July 2017. Past performance is not indicative or a guarantee of future returns.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
5
Style Headwinds Abating
US technology small caps vs. large caps: 2010 - Present
Source: Bloomberg, 5 July 2017
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
6
Technology: PE Expansion Inline With Market
Absolute sector valuation (PE):
Compelling vs. history (1992 – present)
Relative sector valuation (PE):
At / around market level – with superior balance sheet
Source: Ned Davis, 30 June 2017. Past performance is not indicative or a guarantee of future returns.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
7
Undemanding ‘Next-Generation’ Valuations
Internet valuation:
EV / forward 12 month EV/EBITDA levels1
Software as a Service (SaaS) valuation:
EV / forward 12 month revenue multiples2
Source: 1. Goldman Sachs, June 2017. 2. Pacific Crest, June 2017. Past performance is not indicative or a guarantee of future returns.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
8
Undemanding ‘Next-Generation’ Valuations
IT security valuation:
EV / forward 12 month revenue multiples1
Cloud vs legacy valuation
EV / trailing 12 month revenue multiples2
EV/ trailing 12 month sales
14x
12x
10x
8x
6x
4x
2x
0x
LEGACY
CLOUD
Source: 1. Factset, June 2017. 2. Merill Lynch, June 2017. Past performance is not indicative or a guarantee of future returns.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
9
Revisiting Highs (But This Time With Earnings)
PCT share price performance (1997 – present)
March 2000
S&P Tech earnings: $13.09
PE: 70x
June 2017
S&P Tech earnings: $37.48
PE: 25.1x
PCT in Sterling
PCT in US Dollars
Source: Bloomberg, June 2017; annotations: NDR, Trailing 12 months EPS, June 2017. Past performance is not indicative or a guarantee of future returns.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
10
The Internet
Today
c. 2000
11bn >500x 613x 1.1bn
10x
faster
users devices
traffic websites
Computing: The cost of 1m transistors
Storage: The cost of gigabyte of data
Bandwidth: The cost of 1,000Mbps
Source:10x more users: 3.675bn in Sept 16 vs. 361m Dec 2000 (IWS) 17m websites in 2000, 1.14bn at time of writing (http://www.internetlivestats.com/total-number-of-websites/) Traffic from Cisco
(http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/vni-hyperconnectivity-wp.html). Charts = KPCB, Deloitte May 2014. It should not be assumed that recommendations made in
future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. Past performance is not
indicative or a guarantee of future returns.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
11
The Internet
Today
c. 2000
11bn >500x 613x 1.1bn
10x
faster
users devices
traffic websites
Smartphone installed base: 2008 – 2017E
Source: 10x more users: 3.675bn in Sept 16 vs. 361m Dec 2000 (IWS) 17m websites in 2000, 1.14bn at time of writing (http://www.internetlivestats.com/total-number-of-websites/) Traffic from Cisco
(http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/vni-hyperconnectivity-wp.html). Chart = Statista, August 2016. It should not be assumed that recommendations made in
future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. Past performance is not
indicative or a guarantee of future returns.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
12
The Internet
Today
c. 2000
11bn >500x 613x 1.1bn
10x
faster
users devices
traffic websites
IT workloads in public clouds, by company size
30%
25%
20%
15%
10%
5%
0%
End of 2013
Under US$5bn in Revenue
End of 2014
End of 2015
Over US$5bn in Revenue
Source: 10x more users: 3.675bn in Sept 16 vs. 361m Dec 2000 (IWS) 17m websites in 2000, 1.14bn at time of writing (http://www.internetlivestats.com/total-number-of-websites/) Traffic from Cisco
(http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/vni-hyperconnectivity-wp.html). Chart = Morgan Stanley, 2015. It should not be assumed that recommendations made in
future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. Past performance is not
indicative or a guarantee of future returns.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
13
The Internet
Today
c. 2000
11bn >500x 613x 1.1bn
10x
faster
users devices
traffic websites
Data
Smartphone
growth (Zb):
installed
2005 base:
– 2019E
2008 – 2017E
Source: United Nations Economic Commission for Europe http://www.nojitter.com/post/240170228/the-network-impact-of-big-data. It should not be assumed that recommendations made in future will be profitable or will
equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. Past performance is not indicative or a guarantee of future
returns.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
14
Low-innovation Internet Era.....??
A hundred years from now, we might look back
on the late 20th and early 21st centuries and
say, “It was an actively creative society. Then
the internet happened and everything got put
on hold for a generation.”
– Neal Stephenson
“Has the ideas machine broken down?”
– The Economist
“When will this low-innovation
internet era end?”
– Wired
“We wanted flying cars, instead
we got 140 characters”
– Peter Thiel
Source: worldpolicy.org.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
15
The Information Age
‒ PCT 2014
Source: Polar Capital.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
16
The Information Age
Number of annual Google searches (bn)
Source: Polar Capital, Business Insider 2013. All opinions and estimates 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.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
17
The Information Age
Number of manuscripts / books produced in Europe: 500 - 1800
500,000,000
"Every single day 15% of the questions
people ask of Google are (ones) we've
never seen before”
50,000,000
5,000,000
500,000
50,000
5,000
6th
7th
8th
9th
10th
11th
12th
13th
14th
15th
16th
17th
18th
Century
Source: Polar Capital, Business Insider 2013.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
18
Disruptive New Networks / Unprecedented Scale
Centralised, decentralised and distributed networks1
Source: 1. RAND corporation, ‘Where wizards stay up late’’ Other sources: LinkedIn, Statista, June 2016; Amazon, ExportX, December 2015; Alibaba, DMR, August 2016, revenuesandprofits.com, May 2016; Tencent,
Statista, March 2016, expandedramblings.com, November 2015; TripAdvisor, June 2016; Facebook, zephoria.com, July 2015 / July 2016; Google, Hellas, July 2016; Booking.com, August 2016; Airbnb,
expandedramblings.com, February / June 2016. The stocks represented herein do not reflect the entire holdings contained within the Fund. It should not be assumed that recommendations made in future will be
profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
19
Natural Monopolies Being Created?
• 310m active users
• 63m Prime members
• 20m items eligible for Prime
• >350m total products offered
• Paid units grew 28% in Q2
• AWS @ $10bn trailing revs
• $74bn revenue in 2015
• 63% US search share
• 95% US smartphone paid
search clicks in Q1
• $12.3bn R&D spend (2015)
76% of incremental US online advertising spend in 2015
was captured by Google and Facebook
• Amazon: 1. Statista, Q1’16. 2. CIRP, Fortune July 16. 3. http://expandedramblings.com/index.php/amazon-statistics 4. 360pi, June 16. 5. Coburn, Amazon.
• Facebook: theatlantic.com
• Google: 1. http://www.statista.com/statistics/266206/googles-annual-global-revenue/ 2. Statista, July 2016 3. Searchengineland, Q116. 4. https://www.statista.com/topics/1001/google/
• 76% - KPCB, 2016
The stocks represented herein do not reflect the entire holdings contained within the Fund. t should not be assumed that recommendations made in future will be profitable or will equal performance of the
securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
20
Accelerating Pace Of Adoption
Buyers of $1bn+ VC-backed US companies: Tech vs. Non-tech
Source: visualcapitalist.com. The stocks represented herein do not reflect the entire holdings contained within the Fund. It should not be assumed that recommendations made in future will be profitable or will equal
performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
21
Enterprise Computing Becoming Anachronistic
IT spending:
Contraction in IT spending during downturn1
IT spending:
Information processing equipment as % of GDP (1945-present)2
Source: 1. Goldman Sachs, August 2014. 2. Ned Davis Research, 31 March 2017. Past performance is not indicative or a guarantee of future returns.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
22
Device Exhaustion
• Overall device market will contract for the first time this year –> end user spend falling 0.5% y/y in c/c to $719bn in 2016E1
• 2015 was the worst yet for the PC market (2015: $200bn) with units and revenues declining 10% and 13% y/y respectively2
• Elsewhere, the tablet (2015: $60bn) units expected to contract by 5% this year after declining 8% in 20153
• Smartphone units are expected to increase only 7% this year while ASPs will continue to decline now penetration is c. 79%4
PC shipments: 1997 - 20155
Smartphone net adds + replacement units6
Sample
Holdings
Source: Polar Capital unless otherwise stated. 1. Gartner, December 2015. 2. Goldman Sachs, January 2016, IDC January 2016. 3. Goldman Sachs, JPMorgan, January 2016. 4. Gartner, June 2016. 5. IDC, December
2015. 6. CSFB, January 2017. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the
immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
23
Cloud Became “Inevitable” During 2015…
• Public cloud computing leader Amazon Web Services at c. $10bn of trailing twelve month sales (with operating margins > 20%)
• Growing number of traditional companies prepared to go ‘all in’ / evangelise the merits of public cloud computing during 2015
– GE: move 60% of its workloads to the Cloud by 2020, close 30/34 datacentres and migrate half of their 9000 applications1
– “The Cloud has gone from the probable to the inevitable” – Jim Fowler, GE CEO2
• Why now? Mobile centric computing, superior economics, broader reach, major risks addressed (security, vendor lock-in)
AWS: Trailing 12 month sales / operating margin4
Public Cloud share of workloads3
35%
3500
AWS Sales and Operating Margin
AWS Net Sales (US$ m; RHS)
AWS Operating Margin
30%
3000
25%
2500
20%
2000
15%
1500
10%
1000
5%
500
0%
0
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Sample
Holdings
Source: Polar Capital unless otherwise stated. 1. Amazon, October 2015 2. Amazon, October 2015. 3. IDC, Worldwide SaaS & Cloud Software Forecasts; Public Cloud Share of Workloads. 4. Amazon, July 2016. It
should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months
is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
24
…And Disruption Only Just Beginning
• Having debunked many of the earlier barriers to adoption, we expect Cloud migration to accelerate over the coming years
• Computing / storage costs headed lower: Amazon Web Services (AWS) has lowered prices 51 times since launch1
• Expect ‘all’ incremental capacity added beyond the enterprise: traditional IT budgets contract as Cloud  c. 50% of spend by 20192
• Cloud deflation likely to be felt throughout the IT stack while pressuring pricing / volume in the $866bn IT services / BPO market3
Enterprise Computing Workloads: 2016 – 2024E4
Likely Cloud disruption within the IT stack (ISI)5
Sample
Holdings
Source: Polar Capital unless otherwise stated. 1. Amazon, January 2016. 2. Deutsche Bank, January 2016. 3. BNP, Gartner, July 2016. 4. Gartner, August 2016. 5. ISI, January 2016. It should not be assumed that
recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. All
opinions and estimates 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.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
25
Diminished Value Of Incumbency  M&A
Technology M&A since 19951
Cash & equivalents at top 25 tech companies3
Select M&A activity2
Value $m
Date
Target
Acquirer
May-12
Ariba
SAP
19%
4,324
Aug-12
Kenexa
IBM
42%
1,260
Oct -12
OPNET
Riverbed
31%
912
June-13
ExactTarget
Salesforce
50%
2,419
Jul -13
Sourcefire
Cisco
29%
2,185
Dec-13
Responsys
Oracle
38%
1,438
Sept-14
Concur
SAP
28%
7,241
Nov-14
Sapient
Publicis
70%
3,264
Feb-15
Freescale
NXP
2%
17,469
Apr-15
Informatica
PE consortium
11%
4,784
May-15
Altera
Intel
18%
14,354
Oct-15
KLA-Tencor
Lam Research
27%
10,955
Nov-15
King Digital
Activision Blizzard
16%
4,881
Apr-16
Ruckus Wireless
Brocade
45%
1,044
Apr-16
Cvent
Vista Equity
68%
1,408
Jun-16
QLIK Technologies
Thoma Bravo (PE)
5%
2,899
Jun-16
LinkedIn
Microsoft
50%
26,401
Jun-16
Demandware
Salesforce
56%
2,779
Jul-16
ARM Holdings
SoftBank
43%
22,897
Jul-16
Netsuite
Oracle
19%
8,716
Sept -16
Arcam
GE
53%
688
Jan-17
AppDynamics
Cisco
100%*
3,700
Mar-17
Nimble Storage
HP Enterprise
45%
1,000
Apr-17
Mobileye
Intel
34%
14,131
Premium
Source: 1. Centaur Partners, December 2015. 2. Bloomberg and Polar Capital, May 2017. 3. E&Y, June 2016. It should not be assumed that recommendations made in future will be profitable or will equal performance
of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
26
Core Investment Themes
eCommerce
eCommerce worth $342bn in the US2 and $467bn in China4 last year
Penetration just 9% / 8% / 11% in US2 / Europe3 / China5
Number of SKUs Logistics + Ecosystem
Digital Advertising / Marketing
Internet advertising worth $180bn this year6, Social ads ~16% only penetrated6
Social Media ads in US growing 50% in every half year since 20127
Brand Building  Transaction facilitation
Cyber Security
$58bn market in 2016, 6% CAGR to 2019, only ~14% of total S/W spending8
Protect most valuable assets – intangibles (IP, Customers & Reputation)
Block & Protect  Detection, Mitigation & Response
Cloud Infrastructure
$137bn Public Cloud Market (44% CAGR) VS ~$650bn legacy TAM (6% CAGR) by 20201
$11bn AWS LTM revenue growing >50%, still innovating (‘serverless computing’)
Under-utilisation / cost arbitrage  Elastic Compute / TAM expansion
Source: 1. Goldman Sachs, Nov 2016, IaaS + PaaS; 2. US Census Bureau, Penetration of US is calculated by Polar Capital using 2015 adjusted retail sales ex Auto and Gas Station; 3. European B2C Ecommerce
Report 2016; 4. iResearch, May 2016, B2C only; 5. Nielson, Jan 2016; 6. Zenith/Bloomberg; 7. PwC/IAB 2016 Internet Advertising Revenue Half-Year Report; 8. Macquarie, July 2016. It should not be assumed that
recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
27
Core Investment Themes
Software As A Service
Usage based pricing disrupting $150bn2 maintenance market
As penetration rises (~27% today2 ) expect more strategic M&A by incumbents
SMB adoption / TAM expansion Enterprise / ‘rip and replace’
Gaming
$100bn gaming market5 c. 3x > movie box office6, Mobile gaming growing c.15% per annum7
148m eSports Audience5,6, +29% YoY, $3.3 annual rev per fan5,6 VS $20 of NBA5 VS $60 of NFL5
Leisure  Connected / Competitive
Robotics / Automation
$80bn Market1 by 2022 (~12% CAGR3) enabled by advanced components (e.g. sensors, gears)
Position repeatability: 0.01mm (robots) / 0.5mm (humans) VS 0.02mm (iPhone64) / 0.1mm (cars)
Cost savings  Necessity, Flexibility (‘CoBot’) and Consistency
“More than Moore”
Rising capital intensity due to end of ‘Moore’s Law’ (transistor costs stop falling at 20nm)
Greater focus on integration / power consumption VS performance / density
Lithography  Materials Improvement / Process Innovation
Source: 1. Goldman Sachs, Nov 2016, IaaS + PaaS; 2. UBS, Jan 2016; 3. marketsandmarkets, Feb 2016; 4. http://www.cultofmac.com/305200/foxconns-promised-iphone-building-robot-army-running-late/
5. NewZoo, June 2016; 6. PwC <Global Entertainment and Media Outlook 2016>, Global Box Office is estimated to be $36.8 in 2016; 7. NewZoo, June 2016. It should not be assumed that recommendations made in
future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
28
Digital Advertising / Marketing
• Global online advertising expected to reach $195bn in 2016, c. 20% of total advertising spend1
• Paid Search and Social Media markets expected to grow 16% and 33% respectively in 20172
• Size matters: US market dominated by Alphabet and Facebook, who combined captured c. 75% of overall growth in 20162
• Growth drivers: continued improvement in ROI measurement, video content / live streaming, location-based targeting
Internet penetration (as a % of total advertising)3
One Billion Club: timeline to 1bn monthly active users4
Sample
Holdings
Source: Polar Capital, unless otherwise stated. 1. Based on eMarketer forecast, October 2016. 2. Goldman Sachs/Magna Global, January 2017. 3. KPCB, January 2016. 4. BoAML, January 2016. It should not be
assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available
upon request. All opinions and estimates 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.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
29
eCommerce
• eCommerce growth continues unabated and is forecast to reach $1,9tr in 2016, representing c. 8.7% of total retail sales1
• Mobile becoming an integral part of the shopping experience, enabling greater volumes and new use cases (eg. Uber)
• Improvements in payments / delivery continue to reduce online buying friction / change user behaviour and expectations
• Sharing Economy goes mainstream: shared transportation / accommodation markets worth $350bn / $139bn by 20202
Amazon eCommerce gross profit / margin3
Global Retail eCommerce ($bn): 2014 - 2020E4
USD in millions
4,058
3,418
2,860
2,352
1,915
1,336
2014
1,548
2015
2016E
2017E
2018E
2019E
2020E
Sample
Holdings
Source: Polar Capital, unless otherwise stated. 1. Based on eMarketer forecast, August 2016, 2016. 2. UBS, 2016. 3. Pacific Crest, 2016. 4. Statista, 2016. It should not be assumed that recommendations made in
future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. All opinions and estimates
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.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
30
Software As A Service (SaaS)
• The rental / usage-based model is expanding the software market while threatening incumbent franchises / maintenance.
• Enabled by Cloud, software as a service (SaaS) targets a $164bn opportunity by 2022, c. 30% penetrated today1
• Recent acceleration in M&A supportive of our view that Cloud disruption is intensifying (eg. Oracle / Netsuite)
• Preferred areas: enterprise applications, digital marketing, unified communications as a service + new opportunities e.g. Taser
Worldwide SaaS and Cloud Software (2012 – 2017E) 2
Cloud migration across software3
Sample
Holdings
Source: Polar Capital unless otherwise stated.1. IDC. 2. IDC, Centaur Partners, 2014. 3. IDG. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities
in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
31
Gaming
• Video game industry worth $100bn in 2016  $118bn by 2019, driven by new console cycle, mobile and AR/VR1
• Improving market dynamics: industry consolidation + focus on blockbuster franchises = greater scale / profitability / barriers to entry
• The shift to digital distribution (full game digital downloads / additional content) expands the TAM and/ structurally improves margins
• Pokemon Go – first hit game for augmented reality (AR)  scale of mobile gaming: c. 42m daily active users 15 days after launch2
Major publishers receiving >50% of revenue digitally3
Global Games Market ($bn) 2015 – 2019E3
140.0
120.0
99.6
106.5
91.8
100.0
80.0
26.9
25.7
60.0
28.9
27.5
40.0
10.0
8.3
20.0
26.9
22.0
27.7
29.8
10.7
32.0
112.5
29.3
30.4
12.4
118.6
29.7
30.8
13.0
36.0
40.3
2018E
2019E
0.0
2015
Smartphone
2016E
Tablet
Handheld
2017E
TV/Console
Casual Webgames
PC/MMO
Sample
Holdings
Source: 1. Newzoo, Apr 2016. 2. Apptopia, August 2016. 3. Evercore ISI, January 2016. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this
document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
32
Cyber Security
• Security remains one of the more attractive areas within traditional IT budgets, expected to grow c. 10% through 20201
• Favourable regulatory backdrop likely to persist – US National Action Plan calls for a c. 35% increase in spending to $19bn in FY172
• However, priorities shifting from ‘block and protect’ to rapid detection and response (<10% of budgets in 2014  60% by 2020)3
• Preferred areas: email security, privileged account management (PAM), vulnerability management (VM) and SIEM
Expanding Attack Surface4
US cyber security spending: 2009 – 2017E5
Sample
Holdings
Source: 1. marketsandmarkets.com, January 2016. 2. Financial Times, February 2016.3. Gartner, January 2016. 4. Proofpoint. 5. atlanticcouncil.org, 2015. It should not be assumed that recommendations made in
future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
33
Robotics / Automation
• The Fourth Industrial Revolution underway driven by Cyber Physical Systems, Internet of Things and Cloud Services
• Over 25% of manufacturing tasks that can be automated may be performed by robots over the next decade1
• Human-robot collaboration will radically alter the way factories operate, making highly versatile production lines possible
• $80bn TAM by 2022 (c.12% CAGR)2 - we prefer high precision components / sensors over robotic manufacturers
Robotics spending expected to reach $67bn by 20254
80
160
155
70
66.9
9.0
60
50
150
140
17.0
130
42.9
4.5
40
10.8
30
20
10
0
120
117
26.9
2.5
5.9
15.1
1.0
3.2
5.8
24.4
103
16.4
11.0
5.1
7.5
2010
2015E
16.5
11.2
110
(USD, thousands)
Worldwide spending on robots (USD, billions)
Sensor prices (1992 – 2014)3
100
90
80
Military
2020E
2025E
Industrial
Sample
Holdings
Source: 1. Boston Consulting Group, September 2015. 2. marketsandmarkets, February 2016. 3. Rob Lineback, IC Insights. 4. BCG, August 2014. It should not be assumed that recommendations made in future will be
profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. All opinions and estimates 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.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
34
Emerging Themes
Source: Gartner, August 2016.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
35
Voice As A Computing Interface
• Human speak 150 vs. type 40 words per minute on average  voice
should become the most efficient form of computing input1
• Voice queries already account for 20% of Android mobile app
searches in the US, while Siri handles >1bn requests per week2
• “As speech recognition accuracy goes from 95% to 99%, all of
us...will go from barely using it to using it all the time” – Andrew NG3
• By 2020, at least 50% of all searches are going to be through images
or speech according to Baidu4
Words recognised by machine: 1970 - 20165
Sample
Holdings
Source: 1. KPCB, 2016. 2. KPCB, 2016. 3. KPCB, 2016. 4. Baidu / KPCB, 2016. 5. KPCB, 2016. It should not be assumed that recommendations made in future will be profitable or will equal performance of the
securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
36
Autonomous Vehicles
• Automotive market ripe for reinvention: connectivity / infotainment,
ADAS / autonomous driving, vehicle electrification
• Global ADAS / autonomous vehicle penetration forecast to grow from
12% in 2015, to 48% in 2020 and 70% by 20251
• Fully autonomous driving by 2020? Technically yes - Alphabet’s selfdriving cars have already completed 1.8m miles2
• Car ownership? Depreciating, underutilised asset used just c. 4% of
the time  shared private rides becoming mainstream3
ADAS / autonomous vehicle penetration: 2013 – 2024E4
Sample
Holdings
Source: 1. KPCB. 2016. 2. KPCB, 2016. 3. KPCB, 2016. 4. Baidu / KPCB, 2016. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this
document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
37
Augmented / Virtual Reality (AR / VR)
• Nascent today, but massive LT opportunity (TAM = $80bn by 20251)
• Technology driven by smartphone / display / sensor advances
• Gaming primary market today, but additional applications include live
events (sports / concerts) patient monitoring, real estate and education
• Early stage of hardware penetration currently constraining AR/VR
• Success of Pokemon Go (peak >50m MAU2) highlights AR potential
• Current market leaders: Facebook, Sony, HTC, Samsung and Google
Annual VR Hardware / Content Revenue, 2014 – 2020E2
Sample
Holdings
Source: 1. Goldman Sachs, Feb 2016. 2. https://techcrunch.com/2016/12/24/the-reality-of-vrar-trial/ . It should not be assumed that recommendations made in future will be profitable or will equal performance of the
securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
38
eSports
• Esports = Competitive gaming as a spectator sport
• Social media has grown eSports viewership making professional
leagues with full time players / teams possible
–
–
–
–
148m enthusiasts and a further 144m occasional viewers2
40% of eSports viewers do not play the games themselves3
Twitch reaches half of US millennial males4
2016 NBA finals = c.31m viewers vs. League of Legends world finals = c. 36m5
• Revenue opportunities: ads, sponsorship, ticket, merchandise sales
• Rapidly growing TAM: $493m in 2016  $1.1bn by 20196
Esports Growth Scenarios (2012 – 2021E)6
Sample
Holdings
Source: 1. KPCB, 2016. 2. KPCB, 2016. 3. KPCB, 2016. 4. Baidu / KPCB, 2016. 5. KPCB, 2016. 6. Newzoo, September 2015. It should not be assumed that recommendations made in future will be profitable or will
equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
39
Digital Payments / Fintech
• The shift to mobile remains the central and dominant trend in
payments while merchant adoption represents the biggest obstacle.
• Over time the smartphone is likely to replace the physical wallet,
aided by the use of biometric authentication.
• As payments are taken out of the banking system, banks are being
reduced to ‘dumb pipes’ as value moves to the networks.
• Distributed ledger technology: a longer-term opportunity, enabling
payment systems to operate in a decentralised framework
Global Mobile Payments (2010 – 2017E)1
Sample
Holdings
Source: 1. Statista, 2016. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the
immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
40
Internet Of Things (IoT)
• The Internet of Things (IoT)1 is a network of physical objects that
communicate, sense and interact with their internal states or the
external environment. At its best, it envisions a world where
computing is so ubiquitous that it becomes invisible
• Likely to prove over-hyped near-term but longer-term “IoT will be
the front-end of big data”2
• By 2020, each person will own seven connected devices3 while
M2M connections should reach 4bn by 2017 from 1.5bn today4
Number of connected devices 2013 – 2019E5
Sample
Holdings
Source: 1. Source: IoT. 2. Gartner. 3. Cisco. 4. Infonetics. 5. BI Intelligence Estimates, December 2014. It should not be assumed that recommendations made in future will be profitable or will equal performance of the
securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
41
Artificial Intelligence
• What is Artificial Intelligence (AI)? Computers telling humans how to act by learning from data w/o being programmed explicitly
• Massive market opportunity: $3.6bn (2016)  $36bn (2020)  $127bn (2025)1 [combination of hardware / software / services]
• Why now? i) vast data sets necessary to feed neural networks (Internet, smartphones, machine-generated data etc.)
ii) Cheap parallel computing (1GFLOPS costs ~$0.07 now2 VS $32M in 19853 VS ~$9Trn in 19594)
Building neural networks (which mimic the human brain)
•
Training: input unstructured data and “self-improve” by adjusting the weights for neurons
dynamically with feedback from other neurons (not predefined by humans) → billions of paths
executed simultaneously which requires massive parallel computing (GPU/ASIC)
•
Inference (decision-making): process unknown inputs by utilising previous training →
requires extreme low latency (FPGA/CPU/ASIC)
Applications
Present (tech companies)
Future (all companies?)
•
•
•
•
•
Natural Language Processing
• Baidu achieves 97% accuracy5
Image Recognition
• MSFT/GOOG c. 95% VS 94% humans’
accuracy rate in 20156
Internet Search
Predictive Marketing
• Adobe (Sensei), Amazon (DSSTNE7)
•
•
•
Pharmaceutical
• Reinventing clinical trials & drug discovery
Healthcare
• Automated imaging processing analysis
Transportation
• Autonomous driving/package delivery
Manufacturing
• Factory automation, predictive maintenance
Sample
Holdings
Sources: 1. BoAML Research, Dec 2016. 2. Based on NVDA GTX 1080’s performance (9TFLOPS) and cost $600. 3. Based on CRAY-2 Super Computer, theregister.co.uk, March 2012. 4. Based on IBM 1620, Goldman
Sachs, Nov 2016. 5. Baidu World 2015. 6. ImageNet Large Scale Visual Recognition Challenge 2015. 7. Stands for Deep Scalable Spare Tensor Network Engine, “destiny” for short. It should not be assumed that
recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
42
PCT Positioning
Market cap exposure (%)
Sector exposure (%)
Software
Internet Software & Services
Semiconductors & Semiconductor Equipment
Technology Hardware, Storage & Peripherals
Electronic Equipment, Instruments & Components
Internet & Direct Marketing Retail
IT Services
Machinery
Communications Equipment
Chemicals
Other
Cash
25.7%
25.6%
14.8%
11.7%
4.5%
3.7%
2.3%
1.7%
1.3%
1.1%
3.1%
4.1%
Geographic exposure (%)
70
65.9%
60
50
40
30
16.3%
20
10
6.4%
4.7%
1.8%
1.0%
4.1%
0
US &
Canada
Asia Pac (exJapan)
Japan
Europe (ex Middle East
UK)
& Africa
UK
Large Cap (>$10bn)
70.1%
Mid Cap (>$1bn - $10bn)
26.3%
Small Cap (<$1bn)
Total number of holdings
3.5%
121
Top 15 holdings
Alphabet
Apple
Microsoft
Facebook
Samsung Electronics
Tencent
Amazon
Alibaba Group Holding
TSMC
Advanced Micro Devices*
Applied Materials
Salesforce.com
Adobe Systems
New Relic
Splunk
7.5%
7.0%
5.7%
5.4%
3.9%
2.9%
2.8%
2.7%
1.8%
1.7%
1.5%
1.5%
1.5%
1.2%
1.2%
Cash
Source: Polar Capital, 30 June 2017. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made
within the immediately preceding 12 months is available upon request. Totals may not sum due to rounding. *The Fund holds AMD Call options which represent 11bps of NAV and a delta adjusted exposure of 0.51%. The
delta adjusted impact of these options is only reflected in the top 15 positions table all other exposure tables are based on MTM figures.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
43
PCT Positioning
Largest overweights
Largest underweights
8x8
Alphabet
Activision Blizzard
Analog Devices
Advanced Micro Devices*
Apple
Amazon
Baidu
Applied Materials
Broadcom
Axon Enterprise
Canon Inc
CyberArk Software
Cisco Systems
Dolby Laboratories Inc
Cognizant Technology Solutions
Electronic Arts
HP
HubSpot
IBM
New Relic
Infosys
Nintendo Co
Intel
Proofpoint
Intuit
Red Hat
Micron Technology
ServiceNow
Microsoft
Splunk
Nokia
UBISOFT Entertainment
NXP Semiconductors NV
Universal Display Corp
Oracle
Xilinx
Qualcomm
Zendesk
SAP
Market cap exposure versus benchmark1
Large-cap
-16.6%
Mid-cap
14.1%
Small-cap
-20%
2.3%
-15%
-10%
-5%
0%
5%
10%
15%
Source: Polar Capital, as at 30 June 2017. Bold denotes a zero position. *The fund holds AMD Call options which represent 7bps of NAV and a delta adjusted exposure of 0.33%. The delta adjusted impact of these
options is only reflected in the top 15 positions table all other exposure tables are based on MTM figures. It should not be assumed that recommendations made in future will be profitable or will equal performance of the
securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
44
PCT Positioning
Thematic breakdown1,2
Thematic breakdown relative to benchmark (%)1,2
15.0
Legacy
8%
10.0
Internet
26%
Semiconductors
16%
5.0
0.0
-5.0
Smartphones
9%
Medical Technology
1%
-15.0
Apple
7%
-20.0
Big Data
3%
Legacy
Apple
Other
Automotive
Internet
Solar
Smartphones
3D Printing
Emerging
Electric Vehicles
IoT
Semiconductors
Big data
Payments
Medical Technology
IoT
1%
Payments
2%
Factory
automation/robotics
3%
Automotive
0%
-25.0
Cybersecurity
Other
0%
3D Printing
0%
Cloud: infrastructure
6%
Cybersecurity
3%
Factory automation/robotics
Emerging
0%
Cloud: infrastructure
Solar
0%
Cloud: applications
Electric Vehicles
1%
-10.0
Cloud: applications
14%
Source: Polar Capital, 07 July 2017. 1. Benchmark: Dow Jones World Technology Index (TR). 2. Index exposure based on Top 100 index constituents. Figures are shown as gross weightings.
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12
months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
45
PCT Positioning
Earnings growth (Median)
EV/Sales (Mean)
EV/Sales (Median)
EV/Sales (Weighted)**
Sales Growth (Mean)
Sales Growth (Median)
Sales Growth (Weighted)**
CY
NY
CY
NY
CY
NY
CY
NY
CY
NY
CY
NY
CY
NY
CY
NY
Gross Margin (Mean)
Index
Top 100
Index ex
Apple
25.9
22.5
17.1
16.3
5.3
4.5
4.9
4.2
5.7
4.8
20.5
16.6
19.2
13.9
21.8
15.9
60.3
18.4
16.7
13.0
11.3
4.4
3.9
4.0
3.8
5.0
4.3
14.5
9.0
9.2
6.3
15.7
11.3
55.9
18.4
16.7
13.9
11.3
4.4
3.9
4.1
3.8
5.4
4.7
14.6
9.0
9.2
6.3
17.0
11.6
56.0
Gross Margin (Median)
62.9
57.0
57.1
Gross Margin (Weighted)**
58.3
55.7
58.3
Net Cash as % mkt cap
Market Cap ($m)
Avg
10.3
2.3
2.1
Wgtd**
10.1
8.3
6.4
Mean
50,483
64,448
57,529
Median
4,555
18,375
18,178
Wgtd**
225,207
319,306
252,600
Sales growth 2017 – PCT vs. benchmark2
45.0
40.0
35.0
30.0
% of Portfolio
PE (Median)
PCT1
25.0
20.0
15.0
10.0
5.0
0.0
PCT GROSS WEIGHT
BENCH GROSS WEIGHT
Source: 1. Polar Capital, 28 June 2017. Figures in blue exclude Apple (13.4% gross) from the Index Top 100. CY = Current Year, NY = 2018 calendar year estimates. 2. Polar Capital, 07 July 2017. Benchmark: Dow
Jones World Technology Index (TR). Past performance is not indicative or a guarantee of future results. All opinions and estimates 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. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this
document. A list of all recommendations made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
46
Appendix
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
47
Introduction To The Team
• Technology is at the core of the Polar Capital business
• One of the largest technology franchises in Europe with c.US$3.1bn under management
• Six dedicated technology specialists – strong multi-cycle track record
Funds
Senior Fund Managers
Analysts/Fund Managers
Global Technology Fund
US$1.4bn
Polar Capital Technology Trust
US$1.7bn
Mr Nick Evans
Senior Fund Manager
Investment experience: 19 years
Mr Ben Rogoff
Director - Technology
Investment experience: 21 years
Sectors: US (small/mid-cap)
Sectors: US (mid/large-cap)
Miss Fatima Iu
Fund Manager/Analyst
Investment experience: 11 years
Mr Xuesong Zhao
Fund Manager/Analyst
Investment experience: 10 years
Sectors: Europe (all-cap), global
security, networking, energy & med tech
Sectors: Asia (all-cap), global
semi / Semi cap equipment
Mr Bradley Reynolds
Investment Analyst
Investment experience:9 years
Mr Paul Johnson
Investment Analyst
Investment experience: 5 years
Sectors: US (all-cap) – Internet &
digital media
Sectors: Emerging Tech inc.
3D printing, gaming & autos
Source: Polar Capital, 30 June 2017. The Polar Capital Technology Trust was awarded the Money Observer Rated Fund award.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
48
Investment Framework
4,000+ universe
Thematic overview
What we look for
What we avoid
Valuation
Portfolio construction
Portfolio
Sell disciplines
Dynamic definition of technology
Real-world changes in user behaviour
S-Curve inflections
Secular themes / pure-plays
Last-generation winners
Public venture capital
Growth bias – rev/earnings / cash flow
Price targets (bull/base/bear) / Risk reward
Bottom-up stock picking
Benchmark aware
Mis-execution / model change
Price level attainment
Source: Polar Capital.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
49
Thematic Investing: Hype vs. Reality
Polar Capital Technology Team
Early stage
investors
Searching for revenue growth and
cash-flow inflection
High growth
expanding OM%
R&D
negative OM%
Cognitive Expert Advisors)
Connected Home
Blockchain
Index / ETF
Low growth
stable OM%
No growth
uncertain / declining OM%
Machine Learning
Software Defined Security
Autonomous Vehicles
Nanotube Electronics
Smart Robots
Software Define Anything (SDx)
Micro Data Centers
IoT Platform
Commercial UAVs (Drones)
Affective Computing
Smart Data Discovery
Virtual Personal Assistants
Brain Computer Interface
Conversational User Interface
Volumetric Displays
Smart Workforce
Personal Analytics
Quantum Computing
Data Broker PaaS (dbrPaaS)
Neuromorphic Hardware
Natural Language Question Answering
Developed market smartphones
Enterprise Taxonomy and Ontology Management
Human Augmentation
Context Brokering
802.11ax
“Value Trap”?
Wireless Networking (802.11n / ac) Enterprise software
IT Services
Server & Storage Virtualisation
Tablets / Ultrabooks (including Mac Air)
LCD TV / HDTV
eCommerce / online advertising
Notebooks
Mobile broadband (4G / LTE)
Home Broadband
EM smartphones & Ecommerce/Internet
PVR/DVR (Sky+)
Multiplayer / mobile gaming / streaming media
ERP / Traditional software
Moore’s stress / rising semi capital intensity
Sales
Expectations
Gesture Control Devices
Smart agriculture / factory automation / robotics
Software as a Service (SaaS)
Enterprise SSD / 64 bit ARM architecture
Cloud computing (public/private – PaaS/IaaS)
Cyber security / app control / IPS
Big data / predictive analytics / Hadoop
Virtual Reality
Augmented Reality
PND/GPS
DVD
Mobile / social / location based advertising
VCR
Mobile payments / mCommerce / NFC / biometrics
4D printing
Mainframe
Desktop PC / printers
Digital Camera (DSC)
Voice over LTE / WiFI (VoLTE / VoWiFI)
General purpose machine intelligence
Feature phones / 3G
Internet of Things (IoT) / M2M communication
Smart dust
Software defined networking (SDN) / NFV / 100G optical / FTTx)
Virtual Reality
Clean energy (solar & wind)
Innovation
Trigger
Peak of
Inflated expectation
Trough of
disillusionment
Slope of
enlightenment
Plateau of
productivity
Time
2 to 5 years
5 to 10 years
More than 10 years
Electric
vehicles
“Blue Sky”
Years to mainstream adoption:
Less than 2 years
Energy
Storage
3D printing
Emerging
Mainstream
Maturity / Decline
Obsolete before plateau
Positioning of themes/products above is only intended to be indicative of approximate penetration/maturity
Source: Polar Capital & Gartner, August 2016. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations
made within the immediately preceding 12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
50
Team Biographies
Ben Rogoff, Director – Technology
Experience: 21 years
Ben joined Polar Capital in May 2003. He is lead manager of Polar Capital Technology Trust plc and is also joint manager of the
Polar Capital Global Technology Fund. He has been a technology specialist for 21 years. Prior to joining Polar Capital he began his
career in fund management at CMI, as a global technology analyst. He moved to Aberdeen Fund Managers in 1998 where he spent
four years as a senior technology manager. Ben graduated from St Catherine’s College, Oxford in 1995.
Nick Evans, Senior Fund Manager
Experience: 19 years
Nick joined Polar Capital in September 2007 and has 19 years’ experience as a technology specialist. He has been lead manager
of the Polar Capital Global Technology Fund since January 2008. Prior to joining Polar he was head of technology at AXA
Framlington and lead manager of the AXA Framlington global technology fund and the AXA world fund (AWF) – global technology
from 2001 to 2007 (both rated five stars by S&P). He also spent three years as a Pan-European investment manager and
technology analyst at Hill Samuel Asset Management. Nick has a degree in Economics from Hull University.
Fatima Iu
Experience: 11 years
Fatima joined Polar Capital in April 2007 after working as an analyst with Citigroup Asset Management for 18 months. She focuses
on European technology stocks and has responsibility for coverage of the global alternative energy and medical technology subsectors. Fatima graduated from Imperial College London in 2002 with a degree in Medicinal Chemistry. She is a CFA charterholder.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
51
Team Biographies Cont.
Xuesong Zhao
Experience: 10 years
Xuesong joined Polar Capital in May 2012, having spent most of the previous four years working as an investment analyst within
the emerging market & Asia team at Aviva Investors, where he was responsible for the technology, media and telecom sectors.
Prior to that, he worked as a quantitative analyst and risk manager for the emerging market debt team at Pictet Asset Management.
He started his career as a financial engineer at Algorithmics, now owned by IBM, in 2005. He holds an MSc in Finance from
Imperial College of Science & Technology, a BA (Hons) in Economics from Peking University and has passed all three levels of the
CFA.
Brad Reynolds
Experience: 9 years
Brad joined Polar Capital in October 2011 as an Analyst and Trader working as part of the European Market Neutral team with a
focus on media and internet. In 2014, he joined the Technology team as an Investment Analyst. Prior to joining Polar Capital, Brad
worked at Ratio Asset Management as an analyst and trader, and from 2007 to 2011 he worked at F&C as a hedge fund analyst.
Brad started his career in 2001 at Gartmore Investment Management working within the hedge fund team. Brad graduated from the
University of Hertfordshire with a degree in Business Studies and has passed the Level I examination of the CFA Program.
Paul Johnson
Experience: 5 years
Paul joined Polar Capital in March 2012 as an Investment Analyst on the Polar Capital Technology team. Prior to joining Polar
Capital, Paul helped manage a private investment fund between 2010 and 2012. Paul holds a BA in History and Politics and a
Masters in History from Keele University. He has successfully passed all three levels of the CFA program.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
52
New Cycles Challenge The Value Of Incumbency
Inflation adjusted UK holiday expenditure: 1951-1996
overseas
domestic
Source: seasidehistory.co.uk.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
53
Hyper-Personalisation (In The Real World)
An extra large, wet,
double-shot
caramel macchiato
(and WiFi)
Coffee
£1.00
£4.00
It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding
12 months is available upon request.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
54
Important Information
Polar Capital
16 Palace Street
London SW1E 5JD
Important Information: This document is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an
investment into any fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital and is for the intended recipient only. Clients who have
access to this document should make themselves aware of all relevant risk factors relating to these products contained in the Fund or Company’s Prospectus or latest financial report. The law restricts distribution
of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this
document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an Investment Company with investment trust status and as
such its ordinary shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to
do so for the foreseeable future so that the exclusion continues to apply. It is not designed to contain information material to an investor’s decision to invest in Polar Capital PLC – Global Technology Fund or
Polar Capital Technology Trust plc which is an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed
Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered
or placed in a Member State to the extent that (1) the fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be
lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document, the Fund has not been approved,
notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be
made in the future. Therefore this document is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK
FACTORS, IS CONTAINED IN THE COMPANY OR FUND’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Statements/Opinions/Views: All opinions and estimates 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. This material does not constitute legal or accounting advice; readers should contact their legal and accounting professionals for such information. All sources are Polar Capital unless otherwise
stated.
Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. 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 data contained herein.
Holdings: Portfolio data is “as at” the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company or 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 Company or Fund’s best interest to do so. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all
recommendations made within the immediately preceding 12 months is available upon request. This document is not a recommendation to purchase or sell any particular security. It is designed to provide
updated information to professional investors to enable them to monitor the Company or Fund.
Benchmarks: The following benchmark index is used: Dow Jones World Technology Index (Total Return). This benchmark is generally considered to be representative of the Technology Equity universe. This
benchmark is a broad-based index which is used for comparative/illustrative purposes only and has been selected as it is well known and is easily recognizable by investors. Please refer to www.djindexes.com
for further information on this index. Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company or Fund. Security holdings, industry
weightings and asset allocation made for the Company or Fund may differ significantly from the benchmark. Accordingly, investment results and volatility of the Company or Fund may differ from those of the
benchmark. The indices noted in this document are unmanaged, are unavailable for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the Company or
Fund may incur. 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. Information regarding indices is included merely to show general trends in the periods indicated, it is not intended to imply that the fund was similar
to the indices in composition or risk.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
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Important Information Cont.
Polar Capital
16 Palace Street
London SW1E 5JD
Regulatory Status: Polar Capital LLP is a limited liability partnership number OC314700. It is authorised and regulated by the UK FCA 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, 16 Palace Street, London SW1E 5JD. FCA authorised and regulated Investment Managers are expected to write to
investors in funds they manage with details of any side letters they have entered into. The FCA considers a side letter to be an arrangement known to the investment manager which can reasonably be expected
to provide one investor with more materially favourable rights, than those afforded to other investors. These rights may, for example, include enhanced redemption rights, capacity commitments or the provision of
portfolio transparency information which are not generally available. The Fund and the Investment Manager are not aware of, or party to, any such arrangement whereby an investor has any preferential
redemption rights. However, in exceptional circumstances, such as where an investor seeds a new fund or expresses a wish to invest in the Fund over time, certain investors have been or may be provided with
portfolio transparency information and/or capacity commitments which are not generally available. Investors who have any questions concerning side letters or related arrangements should contact the Polar
Capital Desk at the Registrar on 0800 876 6889 (PCTT) or Administrator on +353 1 434 5007 (UCITS). The Fund is prepared to instruct the custodian of the Fund, upon request, to make available to investors
portfolio custody position balance reports monthly in arrears.
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 estimates of actual returns Polar Capital may achieve. Forecasts contained herein are for illustrative purposes only and does not constitute advice or
a recommendation. Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place.
Performance/Investment Process/Risk: Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions. Factors affecting the Company or Fund’s
performance may include changes in market conditions (including currency risk) and interest rates and in response to other economic, political, or financial developments. 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), or guaranteed by any bank, and
may lose value. 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.
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 or prospectus for a description of the investment allocations as well as the risks associated therewith. Please note that the
Company or Fund may elect to invest assets in different investment sectors from those depicted herein, which may entail additional and/or different risks. Performance of the Company or Fund is dependent on
the Investment Manager’s ability to identify and access appropriate investments, and balance assets to maximize return to the Company or Fund while minimizing its risk. The actual investments in the Company
or Fund may or may not be the same or in the same proportion as those shown herein.
Country Specific disclaimers: The Company or Funds have not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders
of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as
amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the
Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons
in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being
solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
For non-US investor use only. Please refer to the Important Information at the end of this presentation.
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