Navigator Global Investments Limited (ASX:NGI)
ASX Appendix 4E
For the year ended 30 June 2023
Results for announcement to the market
Results in brief
(all comparisons to the year ended 30 June 2022)
Revenue from ordinary activities
Earnings before interest, tax, depreciation and amortisation
Amounts in USD’000
30 June 2023
Up
43%
to 184,897
Up
7%
to
54,742
Adjusted Earnings before interest, tax, depreciation and amortisation1
Up
5%
to
48,943
Profit from ordinary activities after tax attributable to members
Down
8%
to
35,512
Net profit for the period attributable to members
Down
8%
to
35,512
Increase in Adjusted Earnings is driven primarily by additional income from recent investments, however net profit for the period is
impacted by interest incurred on borrowings and higher discount unwind on related deferred consideration.
30 June 2023
cents
Basic earnings per share (cents) – statutory basis (based on the weighted
average number of shares on issue over the period)
1 Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) is a non-IFRS financial information and is not subject to audit procedures, and
does not represent profit in accordance with Australian Accounting Standards. This measure is intended to show the Group’s performance before the impact of
non-operating items such as unrealised changes in fair value of financial assets and liabilities and non-recurring items. Refer to table on page 2 for
reconciliation of EBITDA to adjusted EBITDA results.
Down
19%
to
15.03
Dividends
Final 2022 dividend per share (paid 16 September 2022)
Amount per
ordinary share
Franked
%
Conduit
foreign
income %
US 3.0 cents
0%
100%
The directors have determined an unfranked interim dividend of US 3 cents per
share (with 100% conduit foreign income credits).
The dividend dates are:
Ex-dividend date:
Record date:
Payment date:
20 September 2023
21 September 2023
6 October 2023
NGI dividends are determined in US dollars. However, shareholders will receive their dividend in Australian dollars. Currency conversion will
be based on the closing foreign exchange rate on the record date of 21 September 2023.
Dividend Policy
In the prior year, the Company announced that from the 2023 financial year the Company will pay a final dividend of US 3 – 4 cents per
share. This policy allows the NGI Group to direct a significant portion of cash generated from operating activities towards supporting the
continued growth of the business. Dividends will be unfranked and will have conduit foreign income credits attached.
The payment of dividends will be subject to corporate, legal and regulatory considerations.
A dividend reinvestment plan does not operate in respect to dividends of the Company.
Net tangible assets
Per ordinary share
30 June 2023
30 June 2022
USD 121.70 cents USD 120.94 cents
Net tangible assets include the Group’s $19.8 million (2022: $18.1 million) right-of-use asset recognised under AASB 16 Leases.
Navigator Global Investments Limited (ASX:NGI)
ASX Appendix 4E
For the year ended 30 June 2023
Results for announcement to the market (continued)
Details of joint ventures and associates
Longreach Alternatives Ltd
GROW Investment Group
Reconciliation to Adjusted EBITDA 1
30 June 2023
30 June 2022
34.06%
5.84%
34.06%
6.67%
30 June 2023
30 June 2022
Amounts in USD’000
Earnings before interest, tax, depreciation and amortisation
Additional cash payments made for office leases (net)
Unrealised changes in fair value of assets and liabilities
Non-recurring transaction costs and debt restructuring expenses & advice
Equity settled share based payments
Adjusted Earnings before interest, tax, depreciation and amortisation1
54,742
(3,121)
(4,380)
863
839
48,943
51,220
(3,347)
(2,397)
1,052
-
46,528
1 Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) is non-IFRS financial information and is not subject to audit procedures, and
does not represent profit in accordance with Australian Accounting Standards. This measure is intended to show the Group’s performance before the impact of
non-operating items such as unrealised changes in fair value of financial assets and liabilities and non-recurring items.
Additional Appendix 4E requirements can be found in the Directors’ Report and the 30 June 2023 Annual Report and accompanying notes.
This report is based on the 30 June 2023 Annual Report (which includes consolidated financial statements reviewed by Ernst & Young).
2023 ANNUAL REPORT
Navigator Global Investments Limited
and its controlled entities
ABN 47 101 585 737
Securities Exchange Listing
Navigator Global Investments Limited
shares are listed on the Australian Securities Exchange
(ASX Code: NGI)
Website
www.navigatorglobal.com.au
Directors
Michael Shepherd
Nicola Meaden Grenham
Suvan de Soysa
Cathy Hales
Sean McGould
Andy Bluhm (resigned 17 November 2022)
Company Secretary
Amber Stoney
Registered Office
Level 21, 10 Eagle Street
Brisbane QLD 4000
Principal Office
Level 3, 9 Sherwood Road
Toowong QLD 4066
+61 7 3218 6200
Share Registrar
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Locked Bag A14
Sydney South NSW 1235
1300 554 474
+61 2 8280 7111
www.linkmarketservices.com.au
Auditor
Ernst & Young
Level 51, 111 Eagle Street
Brisbane QLD 4000
Navigator Global Investments Limited
Annual Report
CONTENTS
2023 Snapshot
From the Chairman
Directors’ report
Lead auditor’s independence declaration
Financial statements
Directors’ declaration
Independent auditor’s review report
Shareholders information
2
3
5
39
40
95
96
102
Unless otherwise indicated, the numbers in this
annual report have been presented in US Dollars (USD)
Page 1
Navigator Global Investments Limited
Annual Report
2023 SNAPSHOT
USD 71.0 billion
Gross AUM (non-
ownership adjusted)
▲ 16%pcp
USD 25.5 billion
Ownership adjusted
AUM
▲ 11%pcp
USD 48.9 million
Adjusted EBITDA1
▲ 5%pcp
USD 0.98
NTA per share2
▲ 4%pcp
1 This is an unaudited non-IFRS measure and is intended to show the Group’s core operating
performance. Refer to page 13 for further details.
2 NTA per share is calculated as net tangible assets divided by total Ordinary Shares and Ordinary
Shares which would be issued on conversion of Convertible Notes on issue.
Page 2
FROM THE
CHAIRMAN
Page 3
Dear Shareholders
It has been another eventful year for Navigator Global
Investments (“Navigator” or “NGI”). It began with the
acquisition of our tenth minority stake investment into
Invictus Capital Partners (“Invictus”), a real estate credit
focused alternatives asset manager managing $3.2 billion
of assets. With a strong track record of fundraising into
closed-ended vehicles, Invictus adds diversification to
Navigator’s investment sector exposure by introducing a
new asset class in our strategic portfolio.
Navigator delivered another strong year of financial
performance for 2023, earnings Adjusted EBITDA of
$48.9 million, up 5% on the prior year result.
The business performed strongly over the last financial
year despite the ongoing market volatility and more
uncertain macroeconomic environment. These market
conditions have created a new set of opportunities for our
diversified and uncorrelated group of high-quality global
businesses helping deliver strong financial outcomes for
our shareholders.
We have been pleased with the ongoing growth in the
assets under management (AUM) across the Lighthouse
and NGI Strategic businesses driven by investment
performance and an improved opportunity set across
relevant alternative asset classes given the recent market
conditions. In particular, the NGI Strategic Portfolio has
been performing strongly with greater net flows into
flagship strategies, successful product launches and
improved revenue margins delivering higher revenues
combined with higher operating margins through active
expense management. The Lighthouse business has also
experienced positive net flows and growing management
fees, underpinning resilient level of revenues.
We closed out the year with an announcement on 15 June
2023 that Navigator had signed a binding term sheet to
settle the 2026 redemption payment from its 2020
acquisition of a portfolio of alternative investment stakes
with certain affiliates of GP Strategic Capital (formerly
known as Dyal Capital), a platform of Blue Owl (NYSE:
OWL) (“GPSC Investor”). Under the Proposed
Transaction, which is subject to shareholder approval,
Navigator will acquire the remaining distributions previously
retained by GPSC Investor for total consideration of $200
million funded through a $120 million placement to GPSC
Investor and a $80 million entitlement offer.
The transaction repositions Navigator to unlock substantial
shareholder value through:
Deepening the strategic partnership with Blue Owl, a
leading provider of alternative asset management
companies globally.
Continued ability for Navigator and its investment
stakes to utilise the existing value-add service
arrangements with Blue Owl’s business services
platform.
Allow for the broadening of Navigator’s shareholder
base with an opportunity to improve the liquidity of
Navigators shares and ultimately progress towards the
company’s goal of index inclusion.
Strengthen Navigator’s balance sheet and cash flows
to unlock capacity to execute growth initiatives around
additional investment acquisitions.
We believe that the potential value which will be delivered
by the transaction has resonated with our shareholders,
and we look forward to this support being demonstrated in
both the transaction’s approval and their participation in
entitlement offer.
In accordance with our stated dividend policy, the Board
has determined that a dividend of US 3.0 cents per share
will be paid in relation to Ordinary Shares and the
Convertible Notes on 6 October 2023.
The momentum of the Navigator business is made possible
through the efforts of our dedicated staff who, continue to
demonstrate focus and drive to achieve results for
shareholders. The Board extends our appreciation to all of
our staff who have worked hard to make this another
successful year in the Navigator growth story. It is exciting
to see the continuing evolution and growth of our business.
We also thank our new and existing shareholders for
supporting us during what has been an eventful year in our
growth.
Page 4
Michael Shepherd, AO
Chairman
Navigator Global Investments Limited
Operating and financial review
.
DIRECTORS’
REPORT
Page 5
Navigator Global Investments Limited
Directors’ Report
The Directors present their report together with the financial statements of the Group comprising
Navigator Global Investments Limited (‘Navigator’ or ‘the Company’) and its subsidiaries for the
year ended 30 June 2023 and the auditor’s report thereon.
Board of Directors
The Directors of the Company at any time during or since the end of the financial year are:
Michael Shepherd, AO
Appointed 16 December 2009
Chairman and Independent non-executive director, Chairman of the Remuneration and
Nominations & Committee Member of the Audit and Risk Committee
Michael has extensive experience in financial markets and the financial services industry having held
a range of senior positions including Vice Chairman of ASX Limited, and directorships of several of
ASX’s subsidiaries including Australian Clearing House Pty Ltd.
For 9 years, Michael is an independent director of Investsmart Group Limited and more recently a
director of Friends of the Mater Limited and its trustee. Michael is also an independent Compliance
Committee Member for UBS Global Asset Management (Australia) Limited and chairs the Shepherd
Foundation.
Sean McGould
Executive Director & Chief Executive Officer
Appointed 3 January 2008
As a co-founder of Lighthouse Sean has held key leadership positions, including Chief Executive
Officer, President and Co-Chief Investment Officer and Chairman of the Lighthouse Investment
Committee. Sean has been overseeing all aspects of the portfolios since August 1996.
With over 20 years of experience in alternative investment strategies, Sean has demonstrated a
strong track record in the industry. Prior to establishing Lighthouse, he served as the director of the
Outside Trader Investment Program at Trout Trading Management Company. In this role, he was
responsible for the allocation of fund’s assets to external alternative asset strategies. Before joining
Trout, Sean gained valuable experience at Price Waterhouse, where he became a Certified Public
Accountant.
Nicola Meaden Grenham
Appointed 8 October 2020
Independent non-executive director & member of the Remuneration & Nominations Committee
Nicola is a specialist in alternative investments with significant knowledge and experience of
strategic business development and investment management in hedge funds and private markets.
Currently Nicola is the Chair of STANLIB Investments ICAV and Titanbay Ireland Ltd and she also
holds a director position on several BlackRock fund entities. Nicola’s experience includes her time as
the CEO of Alpha Strategic Plc (2008-2012), a UK listed company which provided independent,
owner-managed investment managers with access to passive minority equity capital. She currently
runs Dumas Capital Ltd, a company she founded in 2004 which provides strategic advisory and
research services in the alternative investment sector.
Page 6
Navigator Global Investments Limited
Directors’ Report
Suvan de Soysa
Appointed 22 September 2021
Independent non-executive director & Chairman of the Audit and Risk Committee
Suvan has an accounting and a legal background, holding a Bachelor of Science (Economic)
Honours and a Bachelor of Law before he was admitted as a solicitor of the Supreme Court of New
South Wales in July 1984. Suvan also holds a Graduate Diploma from the Securities Institute of
Australia and a Diploma in Financial Planning from the Financial Planning Association. Suvan was a
certified financial planner for 25 years and is also a fellow of both the Financial Services Institute of
Australasia and the Australian Institute of Company Directors.
Suvan was a co-founder of ipac Securities Limited and ipac Asset Management and during his 25
years undertook a number of senior executive roles. His experience covers a broad range of
business areas within the wealth management arena, having headed various departments including
financial planning, business development, strategic alliances and acquisitions.
Currently, Suvan is a Non-executive Chairman of Chancellor Portfolio Services and for the past six
years an independent non-executive director of Monash Absolute Investment Company where he
continues to Chair its Audit and Risk Committee.
Cathy Hales
Appointed 22 March 2022
Independent non-executive director, member of the Audit and Risk Committee & the Remuneration &
Nominations Committee
Cathy brings her extensive expertise spanning over 25 years where she has successfully led and
developed investment management businesses. Prior to joining NGI, Cathy held the position of
Global Head of Fidante Partners, the multi-boutique asset management arm of the Challenger
Group. Her leadership roles also include distinguished positions at Deutsche Asset Management,
Colonial First State, and BT Funds Management.
Throughout her career, she has held directorships with investment firms such as WaveStone Capital,
Alphinity Investment Management, Greencape Capital, Kudu Investment Management, and Ardea
Investment Management, among others, showcasing her breadth of experience in diverse sectors of
the investment industry.
Cathy’s academic accomplishments include a Bachelor of Business (Economics) Honours degree
and she is a member of the Australian Institute of Company Directors and fellow of the Governance
Institute of Australia.
Andrew Blum
Appointed 17 October 2012
Resigned 17 November 2022
Non-executive director & member of the Audit and Risk Committee
Andrew is the founder and principal of Chicago-based DSC Advisors, LP (DSC), which is the
investment manager of Delaware Street Capital Master Fund, LP. Delaware Street Capital Master
Fund, LP holds a substantial shareholding in Navigator.
DSC invests in a wide array of companies and industries seeking to identify and acquire undervalued
securities and sell-short overvalued securities.
Prior to forming DSC, he was a founder and Principal of Walton Street Capital, LLC, and prior thereto
worked as a Vice President at JMB Realty Corporation and as an Associate at Goldman Sachs.
Page 7
Navigator Global Investments Limited
Directors’ Report
Nature of operations and principal activities
Navigator is dedicated to partnering with well established alternative investment
firms globally
Navigator Global Investments Limited has executed a strategy to invest in a range of diversified alternative asset management
companies, through partnering with leading management teams who operate institutional quality businesses globally. Selecting
partners who are well-established, scaled alternative asset managers, and that are diversified across investment style, product
type and client base. These minoirity interest investments complement the provision of investment mangement products and
services to investors globally through wholly-owned subsidiary Lightouse Investment Partners, LLC.
With interest aligned, our diversified portfolio has delivered resilient earnings for the 2023 financial year, despite difficult global
market conditions that have negatively impacted the results of many traditional asset managers. This validates our approach of
leveraging our investing and operating expertise to invest in leading alternative investment managers who meet our key criteria:
Established
Diversified
Scaled operations which have
been tested over market cycles
Uncorrelated strategies and
multi-product businesses
Global
Aligned
Investing and operating presence
across the globe
Shared philosophy and operating
autonomy
Page 8
Navigator Global Investments Limited
Directors’ Report
Navigator operates a business which is broader and more diversified than ever before. Our performance is driven by high
quality earnings diversified across product, client type, geography and positioned with the financial resources and capabilities to
drive strong long-term growth. Our focus is on sectors of the asset management industry experiencing strong growth and high
barriers to entry.
We look for opportunities which provide exposure to asset management businesses for our shareholders and look to achieve
this with flexible ownership and operating structures. After two very active years of making minority stake investments in
alternative asset managers, Navigator provides access to the earnings of a range of high quality managers to complement our
inhouse hege fund business:
Investment Strategy: A hedge fund that strategically allocates capital to
unaffiliated investment managers and Lighthouse’s platform hedge fund strategies.
Investment Strategy: An equity based absolute return strategy with a low
correlation to public equity markets.
Investment Strategy: An absolute return strategy with multi-portfolio managers
that focuses on macro discretionary and systemic strategies.
Investment Strategy: Providing managed account services globally to institutional
investors with turnkey solutions customised to their needs.
Investment Strategy: Core competencies in public and private credit,
collateralized loan obligations, and event-driven equities.
Investment Strategy: A global, alternative investment management firm operating
across a broad range of derivatives-based strategies with a deep understanding of
volatility
Investment Strategy: Global quantitative and systematic asset management firm
applying a scientific approach to finance
Investment Strategy: Global macro strategy that uses a top-down fundamental
approach to identify and exploit economic and financial imbalances in asset
markets to produce strong risk adjusted returns
Investment Strategy: Global commodities specialist platform with exposure to
energy, metals and agricultural sectors
Investment Strategy: Structured public and private credit strategies across high
yield asset-based securities, commercial and residential credit
Investment Strategy: US based asset manager specialising closed-ended private
equity style funds which provide capital solutions for high quality multifamily
developers and operators in markets experiencing population growth and
undersupply of housing.
Investment Strategy: US based asset manager specialising in opportunistic credit
strategies across the spectrum of real estate debt investments, including high-
yielding and distressed bonds and loans.
Investment Strategy: Australian based asset manager specialising in a variety of
alternative asset classes such as private credit, energy, sustainable seafood and
quantitative market neutral equities.
Investment Strategy: A China based multi strategy multi asset management
company whose goal is to capitalise on opportunities in the Chinese asset
management industry and the continued evolution of China’s markets
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Page 9
Navigator Global Investments Limited
Directors’ Report
Through our partners, we continue to expand our global footprint, meaning we offer our shareholders access to diversified
alternative asset managers who operate and invest around the world.
Our core values
Strong governance and a culture which values ethics and integrity are a key priority for the Navigator board.
We are very aware that people are the heart of everything we do. Our Lighthouse business has operated with the guiding force
of values centred around Ethics & Integrity, Client Loyalty, Teamwork, Continuous Improvement & Excellence and
Professionalism.
As the Navigator Group has evolved to include an increasingly large strategic investment component, we have reviewed our
core values to ensure that they fit our broader business. While keeping the essence of our previous core values, we have
distilled them into four core values which underpin the Navigator Group’s culture and behaviour.
Integrity
Partnership
Excellence
Evolution
Hold ourselves and others to
the highest standards of
ethical and responsible
behavior.
Collaborate and work as a
team for the success of both
internal and external
stakeholders. Treat
everyone with respect and
professionalism.
Be committed to delivering
excellence. Go the extra
mile and own the results of
what you do.
Adapt, change and grow. Be
responsive, open-minded
and act on opportunities to
improve.
Page 10
Navigator Global Investments Limited
Review of Operations
Key financial highlights
Directors’ Report
The 2023 financial year has been marked by growth in both assets under management and revenue across the Navigator
business. Of particular note:
Ownership adjusted Group AUM of $25.5 billion comprising of $15.4 billion from Lighthouse and $10.1 billion from NGI
Strategic Investments which is an increase of $ 2.6 billion over the financial year.
Navigator delivered Adjusted EBITDA of $48.9 million a 5% increase on the prior year (with statutory EBITDA of $54.7
million).
NGI Strategic Investments delivered another strong year contributing a net $31.8 million (2022: $28.8 million). This
increase of 10% was primarily due to $5.0 million of distributions from two new investments, Marble Capital and Invictus
Capital, and the Strategic Portfolio again delivering higher than historical average gross distributions, which totalled $61.9
million (2022: $70.8 million).
Lighthouse management fee revenue has increased 4% to $76.7 million (2022: $73.5 million) resulting from additional
funds under management during the period.
Lighthouse performance fee revenue for the year was $6.9 million (2022: $10.6 million), a decrease of $3.7 million on the
previous financial year. The lower performance fee revenue reflects a difficult period in markets over the financial year,
Lighthouse funds generally performed more strongly than traditional asset management classes.
Operating expenses after adjustments for net of revenue from fund expense reimbursements and provision of office space
and adding back cash lease payments now recognised as a financing cost, increased by $5.2 million or 8%pa on the prior
year. Increased staff costs, primarily due to higher variable compensation, as well as increases in information technology
from cyber security and data storage projects.
5-year historical performance
The Board considers Adjusted EBITDA to be the most relevant measure of the Company’s overall financial performance.
Statutory EBITDA is adjusted for certain cash and non-cash items, particularly those due to carrying investments held at fair
value through the Income Statement, adding in rent expense and other non-recurring items when relevant.
Statutory EBITDA for 2023 increased by 7% on the prior year as a result of another strong year for the NGI Strategic portfolio as
well as distributions received for two newly acquired investments Marble Capital and Invictus Capital:
Statutory EBITDA (USD millions)
37.652
30.518
37.803
51.220
54.700
2019
2020
2021
2022
2023
Cash flows from operating activities (USD
millions)
Dividends per share for the financial year (US
cents)
Dividend amount for the financial year (USD
millions)
22.565
32.562
22.199
89.738
37.856
17.0
14.0
9.5
8.5
3.0
27.281
22.885
25.619
24.002
9.117
19%2
Dividend payout as a % of EBITDA
72%
75%
80%1
52%2
Closing share price (dollars)
AUD 3.94
AUD 1.19
AUD 1.78
AUD 1.25
AUD 1.33
Change in share price (dollars)
▼ AUD 1.40 ▼ AUD 2.75 ▲ AUD 0.59 ▼ AUD 0.53 ▲ AUD 0.08
1
2
2021 payout ratio calculated on Adjusted EBITDA of $31.587 million as calculated in the prior year before comparatives were
restated to align with current year methodology.
2022 & 2023 payout ratio calculated on Adjusted EBITDA of $46.528 million and $48.814 million respectively. Refer to page 13 for
a reconciliation of Statutory EBITDA to Adjusted EBITDA for each period.
Page 11
Navigator Global Investments Limited
Directors’ Report
Dividends
The Directors determined an unfranked dividend of 3 US cents per
share (with 100% conduit foreign income credits) payable 6 October
2023.
This equates to a payout ratio of 19% of Adjusted EBITDA.
The Board has determined that it remains appropriate for the NGI Group
to direct a significant portion of cash generated from operating activities
towards supporting the continued growth of the business.
The dividend policy remains unchanged with an annual dividend of US 3
- 4 cents per share, which will be unfranked, however may have conduit
foreign income credits attached. The payment of dividends will be
subject to corporate, legal and regulatory considerations.
During the 2023 year the final ordinary dividend for the year ended 30 June 2022
of US 3.0 cent was paid to shareholders and convertible note holders amounting
to USD 9 million.
FY2023 dividends of
3.0
cents per share
Navigator Group assets under management
As at 30 June 2023, the Navigator Group
had $25.5 billion
of AUM on an ownership adjusted basis,
an increase of $2.6 billion or 11% since
30 June 2022.
8.5
19%
10.1
NGI Strategic
14.4
7%
15.4
Lighthouse
30 June 2022
30 June 2023
Page 12
Navigator Global Investments Limited
Directors’ Report
Navigator Group results 2023
Adjusted EBITDA of $48.9m
Presentation of the Group’s results is an unaudited non-IFRS measure intended to show the Group’s core operating
performance before the impact of depreciation, amortisation, non-operating items such as net interest income/costs and non-
recurring items. Net profit before and after income tax reconciles to the income statement on page 42.
Management fee revenue
Performance fee revenue
Revenue from reimbursement of fund operating expenses
Net distributions from strategic investments
Other revenue & income
Total revenue & income
Employee expense
Reimbursable fund operating expenses
Other operating expenses1
Total operating expenses1
Result from operating activities1
Net finance income/(costs) excluding interest
Non-operating expenses
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
EBITDA per share
Net interest expense
Depreciation and amortisation
Profit before income tax
Income tax expense
Net profit after income tax
Adjustments (unaudited)
EBITDA
Net cash payments made for office leases
Unrealised changes in fair value of assets and liabilities
Non-recurring transaction costs and debt restructuring expenses &
advice
Equity settled share based payments
Adjusted EBITDA
(unaudited, non-IFRS measure)
Consolidated USD’000
2023
2022
76.7
6.9
96.6
31.8
5.4
73.5
10.6
42.6
28.8
2.7
217.4
158.2
Increase /
(decrease)
4%
(35%)
127%
10%
100%
37%
10%
122%
20%
56%
< (1%)
875%
(18%)
(50.7)
(42.6)
(13.0)
(106.3)
51.9
0.4
(1.1)
(55.6)
(94.5)
(15.6)
(165.7)
51.7
3.9
(0.9)
54.7
51.2
7%
23.2 cents
24.4 cents
(5.1)
(5.6)
44.0
(8.5)
35.5
54.7
(3.1)
(4.4)
0.9
0.8
48.9
(0.7)
(4.8)
45.7
(7.0)
38.7
51.2
(3.4)
(2.4)
1.1
-
46.5
(5%)
629%
17%
(4%)
21%
(8%)
7%
(9%)
83%
(18%)
100%
5%
1
Excludes interest, depreciation and amortisation so as to present the Group’s core operating activities.
Net cash lease payments made during the year are adjusted against EBITDA so that it represents a closer measure of the annual
cash operating cost associated with the Group’s various office premises leases following adoption of AASB 16 Leases.
Add back of unrealised gains and losses associated with financial assets and liabilities measured at fair value through profit and loss
primarily relate to NGI Strategic Portfolio investments and the associated redemption liability.
Transaction costs incurred to date associated with the impending transaction to early settle the 2026 redemption payment. Prior year
non-recurring costs included transaction costs for the Marble Capital transaction and expenses associated with exploring sources of
debt and securing an increase in the Line of Credit facility.
Page 13
Navigator Global Investments Limited
Directors’ Report
Lighthouse Investment Partners, LLC (‘Lighthouse’) is a USD15.4 billion global diversified alternative asset management firm
with more than two decades of delivering competitive risk-adjusted returns and innovative solutions to investors. It operates
three distinct businesses:
Hedge Funds
Hedge Funds
Hedge Funds Solutions
Hedge Fund Solutions
Managed Account Services
Managed Account Services
A growing focus of the Lighthouse
business is its Hedge Fund offering.
These products are structured as
multi-portfolio manager hedge fund
products.
The largest Hedge Fund product
is North Rock, which specialises
in equity based absolute return
strategies with a low correlation
to public equity markets. The
North Rock fund houses multiple
investment teams.
Mission Crest is a relatively
new offering now accessible by
direct investors and is a multi-
portfolio manager global macro
hedge fund.
Additional products using the multi-
portfolio manager structure are in
development and Lighthouse sees
this as a key area for additional
growth.
Lighthouse offers a broad range of
hedge fund solutions, including
strategic partnerships, custom
managed portfolios and commingled
funds.
In its strategic partnerships,
Lighthouse works closely with large
strategic investors to customise their
alternative investment exposure and
meet specific needs across
investment advisory, risk monitoring
and operational services. Strategic
partners may utilise a variety of
Lighthouse’s services, ranging from
investments in its Hedge Funds or
Commingled Funds, Customised
Funds or utilisation of its Managed
Account Services (discussed further
below).
Customised Solutions offers
investors who are able to commit to
a significant investment size the
ability to access the benefits of the
managed account structure in their
own customised portfolio while still
receiving portfolio construction,
manager selection and due
diligence services from the
Lighthouse investment team.
Lighthouse also offers a number of
hedge fund solutions through its
commingled funds.
Lighthouse offers dedicated
Managed Account Services for
large institutions who have
significant allocations to hedge fund
assets. It has recently rebranded as
Luminae to further differentiate it as
a unique service offering.
Managed Account Services provides
these clients with access to the
benefits of a managed account
structure, allowing them to maintain
control of manager selection and
allocation decisions.
Luminae offers clients a unique skill
set and knowledge which allows us
to provide efficient onboarding,
specialised legal structuring and
compliance services, counterparty
management and robust operational
oversight. Internally built expertise
also means a high level of
customisation, and support purpose-
built tools for advanced portfolio
analytics, risk management and
treasury functionality.
Lighthouse has built its
infrastructure over time to handle
the complexity of operating a large
managed account program in terms
of number of managers strategies
and assets under management.
Lighthouse’s collaborative, transparent, and entrepreneurial approach has enabled it to continually improve, innovate, and
evolve the hedge fund experience. The firm’s efforts have produced a culture that attracts top-notch talent who share its vision
and appreciate a focus on exceptional client service. Lighthouse and its affiliates employ over 150 professionals across offices
in New York, London, Chicago, Hong Kong, and Palm Beach Gardens. Its global investor base includes pension plans,
sovereign wealth funds, corporations, insurance companies, endowments, foundations, family offices, and individual investors.
USD15.4bn
Assets under
management
26
year
track record
286
employees
125
investment
professionals
1500+
investors
Page 14
Navigator Global Investments Limited
Directors’ Report
Assets under management (AUM)
Lighthouse finished the year with USD 15.4 billion of AUM, an increase of USD 1.0 billion or 7% over the prior year.
Hedge Funds continue to be a key area for growth, with these products generating AUM growth through USD 1.3 billion of net
inflows.
Lighthouse AUM USD billions
.
2
4
1
.
8
1
1
.
9
3
1
.
4
4
1
.
4
5
1
June 2019
June 2020
June 2021
June 2022
June 2023
The following table summarises the AUM movements over the 2023 financial year by product:
30 June 2022
Net Flows1
Performance22
30 June 20233
Hedge Funds
Hedge Fund Solutions
Commingled Funds
Customised Solutions
USD 2.58 bn
▲ USD 1.30 bn
▲ USD 0.05 bn
USD 3.93 bn
USD 2.44 bn
▼ USD 0.21 bn
▲ USD 0.11 bn
USD 2.34 bn
USD 3.74 bn
▼ USD 0.09 bn
▲ USD 0.16 bn
USD 3.81 bn
Managed Account Services
USD 5.65 bn
▼ USD 0.39 bn
▲ USD 0.08 bn
USD 5.34 bn
Combined total
USD 14.41 bn
▲ USD 0.61 bn
▲ USD 0.40 bn
USD 15.42 bn
The above AUM figures have been determined on the following basis:
1
2
3
Net flows include monies received by Lighthouse for applications and any redemptions effective 1 July 2023. This
convention in relation to the reporting of net flows and AUM has been consistently applied by the NGI Group since
January 2008.
Performance includes investment performance, market movements, the impacts of foreign exchange on non-USD
denominated AUM and distributions (if any).
30 June 2023 AUM is estimated and is based on performance estimates which may be subject to revision near the
20th business day of the month and upon final audit. AUM may include transfers from other Lighthouse Funds that
occurred on the first day of the following month.
Page 15
Navigator Global Investments Limited
Directors’ Report
Financial results
The Lighthouse business has grown AUM by 11% over the
past year, with growth largely attributable to net flows into
Hedge Funds products. Lighthouse revenue from clients is
largely generated by management fees, although there are
a number of portfolios across both Hedge Funds and
Hedge Fund Solutions which may generate a performance
fee.
Management fees
Management fees for the 2023 financial year were $76.7
million, an increase of $3.2 million or 4% on the prior year.
As the average management fee rate remained steady at
0.51%pa, the increase in management fees is consistent
with the increase in AUM. Strong net inflows into Hedge
Funds, particularly in the second half of the financial year,
have resulted in a 5% increase in average AUM of $14.8
billion for FY2023 (2022: $14.1 billion).
The average management fee rate represents the blended
net management fee rate across all AUM. While there are
a number of factors which impact the average management
fee rate across periods, the main driver is the relative
proportion of AUM invested across the various product
lines.
Performance fees
The Group earns performance fees on select portfolios.
The fees represent an agreed share of investment
outperformance of a fund or portfolio over a defined
benchmark and/or highwatermark and may be subject to
hurdles. Performance fee rates range from 10%-20%
depending on the fund.
The financial year delivered performance fees of $6.9
million (2022: $10.6 million). Whilst Lighthouse products
performed well throughout the first half of the financial year
when compared to market indices, the majority of
performance fees are earned on an absolute basis above a
highwatermark over a calendar year. As such, despite
strong relative outperformance by most products in the first
half, performance fees earned were nonetheless lower as
compared to the prior year.
Performance fees are variable in nature, and it is difficult to
forecast how much, if any, performance fee revenue will be
earned in future periods.
Fund reimbursement revenue and expenses
Since 1 January 2021, Lighthouse has been rolling out the
implementation of a pass through expense model across
relevant funds. This pass through model fee structure is
now common as compared to legacy fee structures which
traditionally charged a 1.5-2.0% management fee plus a
15-20% performance fee.
As the relevant products obtain sufficient scale, Lighthouse
is able to establish fund share classes which have a low or
nil management fee, a performance fee and which can
absorb passed through fund operating expenses. These
fund operating costs can include the compensation cost of
dedicated staff (such as portfolio managers and analysts)
as well as external services and consulting expenses. In
practice, these costs are paid by Lighthouse and are then
reimbursed by the relevant funds.
In FY2023, these costs totalled $96.6 million (2022: $42.6
million), for which there was an off-setting $94.5 million
Page 16
expense (2022: $42.6 million). The increase is due to on-
boarding a significant number of portfolio managers and
other staff who are dedicated to the relevant funds over the
course of the financial year.
Employee expenses
Lighthouse employee compensation for FY2023 was $51.6
million (2022: $48.0 million), an increase of 8% on the prior
comparative period and reflective of inflationary pressures
in a highly competitive employment market in the United
States alternative asset management sector.
Fixed compensation was 5% higher than in the prior,
reflecting a new $0.3 million non-cash expense for the
issue of performance rights to relevant senior executives as
well as an incremental $0.5 million of staff termination
costs. The residual increase is due to salary increases and
additional staff hires during the financial year.
Variable compensation was 10% higher on the prior year,
with the increase due to meeting employee expectations in
a highly competitive labour market. An increase in
discretionary bonuses was approved in order to ensure
retention of key staff.
Other operating expenses
Other operating expenses for the Lighthouse business, net
of sundry income and net fund reimbursements, totalled
$13.1 million (2022: $12.2 million), an increase of 7% on
the previous year. The increase primarily relates to a $0.4
million increase in information technology costs, and a $0.6
million increase in distribution expenses.
Lighthouse utilises a number of expert consultants across
its business, in particular to provide specialist assistance
and support in technology, legal, managed account
services and investment processes. These expenses
totalled $4.7 million for the 2023 financial year (2022: $4.3
million). The additional spend related to projects
undertaken during the year regarding improvements in
cyber security and related data storage requirements.
Distribution expenses this year were $2.5 million (2022:
$1.8 million). These expenses relate to third party
distribution arrangements, whereby ongoing payments are
made to third parties in relation to clients they have
introduced to Lighthouse and who continue to be invested
in their products. The increase in the current financial year
is due to additional AUM raised under distribution
arrangements for Hedge Fund products.
Other operating expenses remained relatively steady at
$5.9 million as compared to the prior year (2022: $6.0
million). Travel costs increased by $0.5 million over 2023
as employees returned to pre-pandemic levels of business
travel. These costs were off-set by savings in occupancy
and other administrative costs due to additional recovery of
expenses to relevant Lighthouse Funds. Other operating
expenses also includes $3.1 million of cash payments
made in relation to office leases (net of additional cash rent
received from sub-leases) that is not included in other
operating expenses per statutory accounting (FY2022: $3.4
million).
Sundry income of $3.7 million (2022: $2.6 million) is netted
against other expenses as this amount represents charges
for provision of office rent, desk space and related services
at a nil mark-up.
Navigator Global Investments Limited
Directors’ Report
NGI Strategic Investments Division, established in 2021,
makes investments in the management companies of high
quality alternative asset managers. The acquisition of the
NGI Strategic Portfolio, a portfolio of six minority interests
in alternative asset managers in February 2021 started this
strategic initiative. In May 2022, Navigator executed on a
minority investment stake in Marble Capital, LLC (‘Marble
Capital’) and soon after in August 2022 a further minority
interest investment was made in Invictus Capital Partners
(‘Invictus’).
As at 30 June 2023, the NGI Strategic Investments had
USD 55.6 billion of aggregate AUM, representing USD 10.1
billion of AUM to the NGI Group on an ownership adjusted
basis. The NGI Strategic Investments comprises minority
interest stakes in the following ten alternative asset
managers:
Total
Consideration
(USD millions)
219
Equity interest
Investment sectors
Range between
8-25%
Preferred
Minimum
Distribution to
Navigator until
FY2025
Diversified portfolio of
alternative asset managers
specialising in quantitative
strategies, global commodities,
discretionary global macro,
derivatives, public and private
credit and asset backed
strategies
4
Up to 10%
China based multi-strategy
asset management
10
34.1%
85 over 2
years
16.8%
100 over 3
years
18.2%
9.1% carried interest
participation
Australian based alternative
asset manager specialising
across a diverse range of
strategies, including private
credit
US based asset manager
specialising in closed-ended
private equity style funds
which provide capital solutions
for high quality multifamily
developers and operators in
growth market.
US based asset manager
specialising in opportunistic
credit strategies across the
spectrum of real estate debt
investments, including high-
yielding and distressed bonds
and loans.
1
2
0
2
Y
F
February
2021
September
2021
2
2
0
2
Y
F
3
2
0
2
Y
F
May
2022
August
2022
Page 17
Navigator Global Investments Limited
Directors’ Report
Investment in Invictus Capital Partners
In August 2022, Navigator announced a $100 million
investment into Invictus, adding a 18.2% minority equity
stake in the US based private equity manager to the NGI
Strategic Investments division.
Established in 2008, Invictus is a real estate credit focused
alternatives asset manager for private funds and separately
managed accounts. With $3.2 billion of assets under
management, they are a market leader in the space and
are one of the most active non-bank investors in the United
Stares residential real estate finance market. With a belief
that real estate lending markets remain inefficient due to
reduced credit availability for many groups of creditworthy
borrowers, Invictus provides senior mortgage whole loans
to access premium risk adjusted returns relative to fixed
income alternatives.
Invictus seeks these attractive risk-adjusted returns by
sourcing undervalued high-quality mortgage loans and
financing them efficiently through term credit facilities and
the securitisation market. With cumulative acquisitions in
excess of $25 billion since 2015, they target investments in
newly originated residential and commercial mortgage
loans using established investment programs, its national
sourcing network and substantial operating infrastructure.
Invictus believes these investments provide an attractive
combination of premium return with strong downside
protection.
Invictus has a strong track record of fundraising into closed
end funds, with closed commitments across their various
products as follows:
Invictus
Opportunities Fund
II
• $833m
• 2019, closed end
• $386m
• 2017, closed end
Invictus
Opportunities Fund
• $974m
• 2022, closed end
Invictus
Opportunity Fund
III
$750m
$663m
Other accounts,
Unlevered
Other accounts,
Levered
The investment in Invictus is attractive to Navigator for a
number of reasons:
The closed-ended structures and long dated
accounts mean there is certainty of AUM over the
life of the vehicle, providing a stable management
fee earnings stream.
Through its affiliated company, Verus Mortgage
Capital, and proven broad network of lending
partners, Navigator expects Invictus to be able to
continue to grow its existing institutionally scaled
loan investment program, as well as further
execute on its ability to efficiently fund investments
through the securitisation market.
Page 18
$75 million of the proceeds from Navigator’s total
$100 million investment will be used by Invictus to
execute group initiatives, including committed
capital to planned new funds and invest alongside
clients.
It adds diversification to Navigator’s investment
sector exposure by introducing a new asset class
in our overall portfolio.
Navigator Global Investments Limited
Directors’ Report
Assets under management
NGI Strategic Investments had aggregated total AUM of USD 55.6 billion as at 30 June 2023, with Navigator’s ownership
adjusted AUM at USD 10.1 billion.
The 19% increase in aggregated AUM over the 2023 financial year was driven by a combination of strong investment
performance, organic growth of the NGI Strategic Portfolio managers and Marble Capital, as well as through acquisition of a
new equity stake in Invictus.
The USD 5.0 billion of growth in NGI Strategic Portfolio AUM reflects the exceptionally strong returns generated across the
aggregated managers for the 2022 calendar year and continuing for the first half of the 2023 calendar year.
Financial results
Distribution income
The majority of income from NGI Strategic Investments
was derived from the NGI Strategic Portfolio, which paid
$61.9 million of gross distributions during the 2023 financial
year (FY2022: $70.8 million).
Of the gross distributions, Navigator retains $26.9 million
(FY2022: $28.8 million) and Dyal is entitled to $35.0 million
(FY2022: $42.0 million). The gross distributions are before
the deduction of certain operating expenses.
Since acquisition, the NGI Strategic Portfolio has
significantly outperformed expectations based on pre-
acquisition historical earnings. Historical distributed
earnings of the Portfolio between calendar years 2015 and
2020 ranged between $27 million and $41 million, and
averaged at $34 million.
The managers in the NGI Strategic Portfolio have generally
continued to perform well over calendar year 2023 to date.
However, we highlight that the performance fees earned by
these managers are variable in nature and it is not possible
to predict with any certainty what Navigator’s share of
distributions for the 2023 financial year will be. We are
confident however, that our Preferred Minimum Distribution
Amount is well covered, and there is upside for additional
revenue above that.
NGI Strategic Portfolio income
The NGI Strategic Portfolio is the aggregation of
the six manager stakes acquired by Navigator in
February 2021. The acquisition is planned in
two stages:
The initial acquisition in February 2021,
which gives Navigator a Preferred Minimum
Distribution Amount of all distributions paid
by the NGI Strategic Portfolio until 30 June
2025, indexed at 3.0%pa, plus 20% of any
distributions received above the Preferred
Minimum Distribution amount. For FY23
the Preferred Minimum Distribution
Amount is $18.035 million.
The final settlement in April 2026 whereby
Navigator will acquire full ownership of the
NGI Strategic Portfolio and will then be
entitled to 100% of any distributions it earns.
Expenses
Net unrealised changes in fair value
The expenses involved in operating the NGI Strategic
Investments are:
A small number of dedicated staff who are responsible
for monitoring the existing investments as well as
identifying and diligencing new investment
opportunities.
External professional advice costs on legal, tax
compliance and external valuations.
External audit costs.
Nominal day to day administration expenses.
These costs were $3.9 million for the 2023 financial year,
the first full year of operations (FY2022: $2.5 million). The
increase compared to the prior year reflects the
employment of additional staff, a $0.4 million non-cash cost
for the issue of performance rights during the year.
NGI Strategic Investments may also incur non-recurring
external diligence, financing and transaction costs. These
costs for the 2023 financial year were $0.9 million (FY2022:
$1.0 million).
The Group carries its investments at fair value, which is re-
measured at each balance date. Changes to the fair value
of the NGI Strategic Portfolio are recognised in the profit
and loss statement, and given their strong distributions and
growth in aggregate AUM, as $33.9 million fair value gain
has been recognised, which is a 12% increase on the
opening fair value of the assets.
The redemption liability associated with the FY2026
settlement of the remaining ownership stake of the NGI
Strategic Portfolio is carried at a fair value of $160.0 million
as at 30 June 2023, resulting in a $31.6 million impact to
the profit and loss statement.
Changes to the fair value of investments in Marble Capital
and Invictus are recognised in other comprehensive
income, and a fair value loss of $18.8 million was
recognised in relation to these investments for FY2023.
Page 19
Navigator Global Investments Limited
Directors’ Report
Business strategies and future outlook
FY2023 was a year of consolidating and embedding prior peirod expansions. The Navigator Group is more diversified across
alternative asset management sectors than ever before. This diversification creates high quality earnings across a wide range
of product, client type and geography.
Navigator’s earnings profile
is now highly diversified
over 11 stakes in
alternative asset managers
Multi-year outlook for
stable, well-covered
preferred earnings stream
from the NGI Strategic
Portfolio, and the addition
of high-quality earnings and
visible revenue generated
from closed-end funds
Lighthouse generates
management fee
concentrated earnings
from a diverse product set
and client base
Diversification
Growth
Long-term
Growth
Stability
Innovation
Our partners are
demonstrating solid AUM
growth, driven by both
performance and inflows
The Lighthouse business is
well positioned for growth
across multiple products and
continues to invest in
additional product innovation
NGI Strategic managers continue
to innovate by leveraging their
core competencies and tactically
launching new products and
strategies
With strong organic AUM growth from both our Lighthouse business and the majority of our minority stake investments, both
from positive investment performance and net inflows to products, we expect to see the benefits through an uplift in
management fee earnings. This growth underpins Navigator’s financial results whilst we continually explore other opportunities
to enhance earnings.
During this financial year we proactively engaged in discussions to bring forward the planned acquisition of the full earnings in
relation to the NGI Strategic Portfolio acquired in February 2021. structure the organisation now to facilitate continued growth.
On 1 August 2023, Navigator announced it had entered into definitive documentation to early settle this planned 2026
redemption payment to certain affiliates of GP Strategic Capital (formerly known as Dyal Capital), a platform of Blue Owl (NYSE:
OWL) (“GPSC Investor”). Navigator will acquire the remaining distributions previously retained by GPSC Investor for total
consideration of $200m funded through a $120m placement to GPSC Investor and a $80m entitlement offer to existing
shareholders. Subject to shareholder and other regulatory approvals, the transaction is expected to settle before the end of the
2023 calendar year.
Bringing a number of key benefits, a key outcome of the transaction will be to strengthen Navigator’s balance sheet and cash
flows to unlock capacity to execute growth initiatives around additional investment stake acquisitions. Navigator continues to
see and explore opportunities for additional investments, and from the second half of the 2024 financial year will be in a position
to proactively pursue the most attractive opportunities which meet our criteria.
Page 20
Navigator Global Investments Limited
Directors’ Report
Material business risk
Cyber risk
The material business risks facing the Group are equity
market conditions, cyber and regulatory risk.
Global market conditions
The Group’s results and outlook are influenced by
conditions in global equity markets, both in terms of
potential impact on investment performance of funds and
prospects for raising and retaining client assets. The
Group is exposed to a variety of economic, political,
geographical and social risk factors through its global
portfolio of stakes in alternative investment managers.
These risk factors may impact on the performance of
capital markets in unpredictable ways.
The Group’s approach to managing this market exposure
risk has been through a strategy of diversification of our
investments in alternative asset managers across a range
of strategies, products and geographies. Through careful
curation of our minority investment stakes, we look to add
investments with low correlation to existing specialities to
build resilience in both our management fee and
performance fee earnings through various market cycles.
Global market conditions can impact on investment
performance, which impacts the value of the Group’s
assets under management. Assets under management is
a key driver of the Group’s financial performance, and is
sensitive to the investment performance generated by each
asset manager. Investment performance can also impact
assets under management by influencing the prospects of
an individual manager in raising and/or retaining client
capital.
Key person risk
The generation of strong investment returns and raising of
new capital from clients requires a high level of skill and
experience from key people within the Group and the asset
managers we invest in. A loss of these key people could
be detrimental to the financial performance of the Group.
The Group looks for alignment of interest with key persons
through remuneration and ownership interests in order to
incentivise both performance and retention.
Regulatory risk
The Group operates in a number of jurisdictions around the
world in an industry which is highly regulated. The Group
remains focussed on compliance with its regulatory
requirements, particularly as they continue to evolve
through regular review and change in laws, regulations and
policy requirements. Our minority stake investments are in
established and well resourced asset management firms
which have dedicated in-house compliance functions. We
ensure that our internal legal, risk and compliance functions
continue to be well resourced, both in terms of staff and
access to specialist consultants and support.
Data is a key asset of the Group, and the number of high
profile data hacking incidents which occurred throughout
2023 highlights the importance of vigilance in relation to
management of the Group’s cyber environment. Whilst the
Group does not collect and store any significant level of
personal financial, payment or identification data in relation
to individuals, a core focus is protection of portfolio data as
well as ensuring business continuity in the event of any
technological disruption. The Group’s operating subsidiary
has dedicated in-house resources who proactively manage
information technology requirements and cyber risks. The
Group also engages external specialists to regularly
review, test and enhance its technology environment.
Directors’ interests
The relevant interest of each director in the shares
issued by the Company at the date of this report is
as follows:
Director
Ordinary
shares
Notes
Michael
Shepherd
Suvan de
Soysa
Nicola
Grenham
Cathy
Hales
195,270 Shares are held indirectly
by Tidala Pty Ltd as
Trustee for the Shepherd
Provident Fund
150,000 Shares are held indirectly
by De Soysa Super
Pension Fund, a self-
managed superannuation
fund
6,450 Shares are held directly
10,000 Shares are held indirectly
by 89th & Amsterdam Pty
Ltd as trustee for the
Rocama Trust, a director
related entity (family trust)
Sean
McGould
19,438,083 Shares are held indirectly
by SGM Holdings, LLC
Company secretary
Ms Amber Stoney BCom (Hons) CA holds the position of
company secretary. Amber has held this position for most
of her tenure at Navigator, specifically for the periods 15
March 2007 to 20 November 2008, 18 July 2011 to 9 May
2016 and from 27 June 2016. Amber also holds the
position of Chief Financial Officer of Navigator. Prior to
joining the Company in 2003, Amber was a senior manager
at KPMG, specialising in the funds management industry.
Page 21
Navigator Global Investments Limited
Directors’ Report
Corporate governance
Audit and Risk Committee meetings
The number of meetings the Audit and Risk Committee
held during the year ended 30 June 2023, and the number
of meetings attended by each Committee Member whilst in
office were:
Held
Attended
Suvan de Soysa (Chair)
Michael Shepherd
Cathy Hales
Andy Bluhm
5
5
4
1
5
5
4
1
Remuneration and Nominations Committee
meetings
The number of meetings the Remuneration and Nomination
Committee held during the year ended 30 June 2023, and
the number of meetings attended by each Committee
Member were:
Held
Attended
Michael Shepherd (Chair)
Nicola Grenham
Cathy Hales
2
2
2
2
2
2
The Group recognises the value of good corporate
governance. The board believes that effective
governance processes and procedures add to the
performance of the Group and engenders the confidence of
the investment community.
The Company has adopted Listing Rule 4.10.3 which
allows companies to publish their corporate governance
statement on their website rather than in their annual
report. The directors have reviewed the statement, and a
copy of the statement, along with any related disclosures,
is available at:
https://www.navigatorglobal.com.au/corporate-governance
Board and Committee meetings
The agenda for meetings is prepared by the Company
Secretary in consultation with the Chairman and Chief
Executive Officer, and is set to ensure adequate coverage
of strategic, operational, financial and governance matters.
Board papers are circulated in advance of the meetings.
Senior executives are invited to attend board meetings,
however the directors may have closed sessions without
executive involvement during meetings at their discretion.
Board meetings
The number of meetings of the Company’s board of
directors during the year ended 30 June 2023, and the
number of meetings attended by each director whilst in
office were:
Held
Attended
Michael Shepherd (Chair)
Nicola Grenham
Sean McGould
Suvan de Soysa
Cathy Hales
Andy Bluhm
19
19
19
19
19
5
18
18
18
19
19
4
Page 22
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited
This Remuneration Report for the Company and its controlled entities for the year ended
30 June 2023 forms part of the Directors’ Report and is audited in accordance with section
300A of the Corporations Act 2001.
Reporting in United States dollars
Contents
In this report the remuneration and benefits reported have been
presented in US dollars (‘USD’). This is consistent with the
functional and presentation currency of the Group. Where
compensation for Australian-based employees is paid in
Australian dollars, it is converted to USD for reporting purposes
based on either specific transaction exchange rates, or the
average exchange rate for the payment period as appropriate.
The Australian dollar based compensation paid during the year
ended 30 June 2023 was converted to USD at an average
exchange rate of:
AUD/USD 0.6630 (2022: AUD/USD 0.7259).
Overview of remuneration policy and approach
Relationship between remuneration policy and company
performance
Variable compensation for the 2023 financial year
CEO remuneration
Non-executive director remuneration
Key management personnel remuneration disclosures
23
28
29
30
30
31
Overview of remuneration policy and approach
The overall objectives of the Group’s remuneration policies are to:
embed a culture that promotes the Group’s core values
support the business strategy of the Group by attracting, retaining and rewarding quality staff
encourage appropriate performance and results to uphold client and shareholder interests
properly reflect each individual’s duties and responsibilities
When setting the Group’s approach to remuneration, the Board keeps the following factors front-of-mind:
Operations and employees are mainly based in the US
Navigator is an Australian company listed on the Australian Securities Exchange, however the Group’s operations
are predominantly based in the US. To be effective in attracting and retaining high quality staff, remuneration
arrangements must therefore be aligned to the expectations of people who are employed in the United States
alternative asset management industry.
These remuneration arrangements may diverge from arrangements which would be considered industry practice
within Australia. The quantum and proportion of variable remuneration to total remuneration packages is one
such area.
Variable remuneration is a key component of total compensation
The remuneration arrangements in place for the Group are generally structured around setting a lower fixed
remuneration amount and having the opportunity to earn variable remuneration as a major component of overall
remuneration. This is particularly true for our US based employees. The Board believes this provides a dynamic
basis to be able to adjust the Group’s total remuneration expense and is also consistent with US industry practice.
Performance conditions in relation to variable remuneration apply to senior management and investment staff in the US. These
have been implemented to incentivise senior employees to achieve results which grow revenues for the Lighthouse business as
it continues to transition away from its Legacy fund-of-fund business model and into a multi-portfolio manager hedge fund
business.
The Board has maintained a level of discretion in setting the total amount of variable compensation, and the Chief Executive
Officer (CEO) exercises his discretion in allocating bonuses to individuals based on their performance and contribution.
The Board is satisfied that the current arrangements are consistent with alternative asset management industry practice in the
US and allows employees to focus on achieving results for clients, which is ultimately in the long-term interests of shareholders
The Board notes that with the implementation of a pass through expense model for Lighthouse over the past few years, a
reassessment of the remuneration strategy for the Lighthouse business will be considered over the 2024 financial year.
Page 23
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Overview of remuneration policy and approach (continued)
The Group rewards its executives and senior managers
with a level and mix of remuneration which is relevant to
their position, responsibilities and performance during the
year. Remuneration comprises both fixed and variable
remuneration, and may include long-term incentive
positions. The correct mix and outcome of remuneration is
considered by the Remuneration and Nominations
Committee and the Board when setting and approving
remuneration arrangements.
Fixed remuneration
Fixed remuneration may include:
base salary;
a minimum annual bonus amount; and
employer contributions to superannuation and
retirement plans and health care benefits.
Fixed base remuneration is generally determined by having
regard to responsibilities, performance, qualifications and
experience of the relevant staff member.
Since the 2022 financial year, the Group has introduced a
bonus structure which establishes specific performance
conditions in relation to annual variable bonus
remuneration for select senior management and
investment roles. The specific performance conditions are
set to incentivise those employees to achieve outcomes
directly relevant to their roles and responsibilities, such as
achievement of a defined level of net performance return
for a particular fund or portfolio for which they are
responsible.
As part of implementing these new performance conditions,
a minimum and/or maximum bonus component may be
incorporated into the revised bonus remuneration
arrangements for these staff members.
The implementation of these arrangements has been
limited to a small number of employees, hence most
employees do not have a fixed bonus component in their
compensation structure.
Fixed remuneration is reviewed at least annually, or on
promotion, to ensure that it is competitive and reasonable.
There are no guaranteed increases to the minimum
remuneration amount.
The amount of fixed remuneration is not dependent on the
satisfaction of a performance condition, or the performance
of the Group or business unit, the Company's share price,
or dividends paid by the Company.
Other benefits
Employees are entitled to additional benefits that may
include educational assistance, adoption assistance and
health care benefits.
Employees are also able to make investments into
Lighthouse managed funds without incurring any fees.
There is no incremental cost incurred by the Group in
providing fee-free investment management services via the
Lighthouse funds to employees. Having employees invest
their own assets into Lighthouse managed funds is viewed
positively by clients and potential clients as it demonstrates
an alignment of interest between the Lighthouse employee
and future investment results for clients. Nil fee
arrangements for employees is common practice in the US
asset management industry.
Variable remuneration
Short term incentives
Variable remuneration is comprised of participation in a
short-term cash bonus pool, and for certain senior eligible
employees, participation in long-term incentive plans.
The majority of existing variable remuneration
arrangements are short-term in nature, and are designed to
motivate staff to create value for both:
our clients, thorough investment returns and a high
level of client service; and
the Company's shareholders.
As noted, since the 2022 financial year, certain senior
management and investment employees have had
contractual performance conditions applied to their bonus
arrangements. These arrangements may include a
minimum and maximum applied to any amount calculated
in accordance with the performance condition.
The performance of individual staff members, including
senior executives, is reviewed at least annually, after which
the award of variable remuneration is considered.
The Board approves the overall size of the annual bonus
pools and approves an award to the CEO, the Managing
Director of Strategic Corporate Development and the Chief
Financial Officer. The Board delegates authority to the
CEO to exercise his discretion to make variable
remuneration allocations to individual staff.
Page 24
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Overview of remuneration policy and approach (continued)
Long term incentives
At the 2021 Annual General Meeting (“AGM”) held on 28 January 2022, shareholders approved the Performance Rights Plan
(the “LTI Plan”) and the issue of securities under the LTI Plan. A summary of the LTI Plan is set out below:
Performance
Rights Plan
The Board may, from time to time, in its absolute discretion, offer to grant Performance Rights as part of its
long-term incentive strategy to an eligible participant under the Performance Rights Plan.
Any full-time or part-time employee (including any executive director) of the Company and its related bodies
corporate (Group) (Employee) is eligible to participate in the Performance Rights Plan and to be offered
Performance Rights if they satisfy the criteria or other performance conditions that the Board determines
from time to time.
Objective
The objective of the LTI Plan is to:
support the business strategy of the Group by attracting, retaining and rewarding quality executives and
staff;
encourage appropriate performance and results to uphold client and shareholder interests;
properly reflect each individual's duties and responsibilities; and
embed a culture that rewards performance whilst maintaining integrity, reputation and mitigating risk.
How offers
made
How
Securities
acquired
The Company may from time to time invite any person to participate in the LTI Plan who is an Eligible
Person by offering to the person Performance Rights for acquisition on such terms as the Board may
determine in accordance with this LTI Plan.
Performance Rights may be granted, and shares, upon the exercise of Performance Rights, may be issued
transferred to Employees or such other persons (including without limitation, any person’s legal personal
representative or trustee in bankruptcy) as the Board in its discretion determines to be eligible to participate
in the Performance Rights Plan (Participant).
Consideration Unless otherwise determined by the Board in its discretion, Performance Rights are to be granted for nil
consideration to Employees under the Performance Rights Plan.
The exercise price for Performance Rights, or the method of calculation of the exercise price, is as
determined by the Board at the time of grant and stated in the letter of offer. The exercise price for a
Performance Right will be nil (including where no exercise price is stated in the letter of offer) unless the
Board determines otherwise and states the price in the letter of offer.
Other terms
The Board will determine whether any performance hurdles or other conditions will be required to be met
(vesting conditions) before the Performance Rights which have been granted under the Performance Rights
Plan can vest.
Performance Rights will only vest once all vesting conditions and performance hurdles set out in the offer
have all been satisfied or otherwise waived by the Board, and will vest automatically on the business day
after the Board determines the vesting conditions and performance hurdles set out in the offer have all been
satisfied or otherwise waived.
Once granted, a Performance Right will lapse on the earliest to occur of:
the stated lapsing date;
a date or circumstance specified in the offer for that Performance Right or a provision of the
Performance Rights Plan rules as when a Performance Right lapses;
failure to meet an exercise condition or meet any other condition applicable to the Performance Right
within the period specified in the offer for that Performance Right; or
the receipt by the Company of a notice in writing from a Participant that the Participant has elected to
surrender the Performance Right.
Performance Rights are not entitled to receive a dividend. Any shares issued or transferred to a Participant
upon vesting of Performance Rights are only entitled to dividends if they were issued on or before the
relevant dividend entitlement date.
A share issued on exercise of a Performance Right will rank equally in all respects with shares already on
issue on the date of exercise of the Performance Right, except for entitlements which had a record date
before the date of issue of that share.
Page 25
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Overview of remuneration policy and approach (continued)
Long term incentives (continued)
The Board has made two grants of performance rights under the LTI Plan to Participants, the 2021 Performance Rights Grant
and the 2022 Performance Rights Grant (the Grants). The performance conditions relating to the Grants are as follows:
Performance
conditions
The number of Performance Rights that vest and, therefore, the number of shares that Participants may acquire,
are subject to two performance conditions.
Performance Rights will vest depending on the following two performance conditions:
1.
2.
total shareholder return (TSR); and
earnings before interest, taxes, depreciation and amortisation (EBITDA).
50% of the Performance Rights granted for the performance period will be tested against an absolute TSR
performance condition (TSR Rights), and the remaining 50% will be tested against an absolute adjusted EBITDA
performance condition (EBITDA Rights). In both cases, any vesting will depend upon the Compound Annual
Growth Rate (CAGR) achieved by the Company.
TSR Rights
The performance condition to be used to determine the number of TSR Rights that vest is the TSR performance of
NGI over the performance period.
Broadly, TSR measures the return to a shareholder over the relevant performance period in terms of changes in
the market value of the shares plus the value of any dividends paid on the shares. Unless the Board determines
otherwise, the share prices used to calculate the TSR of the Company for a performance period will be measured
as follows:
the opening share price will be the volume weighted average price on the ASX in respect of the
Company for the 20 trading days ending on the first day of the performance period; and
the closing share price will be the volume weighted average price on the ASX in respect of the Company
for the 20 trading days ending on the last day of the performance period.
The percentage of Performance Rights which vest, if any, will be determined by the Board by reference to the
absolute TSR CAGR achieved by the Company over the relevant performance period:
TSR - Performance level
TSR over the Performance
Period
Vesting level
Below Minimum
Minimum
< 7%
7%
0%
25%
Between Minimum and Target
Between 7% and 9.5%
Straight line vesting between 25%
and 50%
Target
9.5%
50%
Between Target and Stretch
Between 9.5% and 14.5%
Straight line vesting between 50%
and 100%
Stretch
14.5%
100%
The Board's determination of TSR and TSR CAGR for this purpose is final and is not appealable or reviewable.
EBITDA Rights
The performance condition to be used to determine the number of EBITDA Rights that vest is the CAGR of
adjusted EBITDA per share (EBITDA/Share) over the performance period.
Unless the Board determines otherwise, EBITDA is to be calculated as Earnings Before Interest, Tax, Amortisation
and Depreciation of the NGI Group adjusted for the following:
to recognise cash payments associated with office lease payments recognised as a finance cost under AASB
16 Leases;
to exclude from EBITDA non-cash changes in fair value related to the assets and liabilities associated with the
NGI Strategic portfolio; and
to exclude from EBITDA expensed transaction costs incurred in relation to an acquisition accounted for under
AASB 3 Business Combinations.
The Board retains a discretion to adjust the EBITDA performance condition to ensure that participants are not
penalised nor provided with a windfall benefit arising from matters outside of management’s control that affect
EBITDA (for example, excluding one-off non-recurrent items or the impact of significant acquisitions or disposals).
Page 26
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Overview of remuneration policy and approach (continued)
Long term incentives (continued)
Performance
conditions
(continued)
EBITDA/Share is calculated by dividing EBITDA for the financial year by the weighted average number of ordinary
shares outstanding over the relevant period i.e.
USD EBITDA (or loss) for financial year
Weighted average number of ordinary shares outstanding
The vesting schedule for the EBITDA/Share performance hurdle is set out in the table below:
EBITDA - Performance level
EBITDA/Share CAGR over the
Performance Period
Vesting level
Below Minimum
Minimum
< 8%
8%
0%
25%
Between Minimum and Target
Between 8% and 11.5%
Straight line vesting between 25%
and 50%
Target
11.5%
50%
Between Target and Stretch
Between 11.5% and 15%
Straight line vesting between 50%
and 100%
Stretch
15%
100%
Performance
period
2021 Performance Rights Grants
The performance conditions will be tested on a date determined by the Board following the end of the 2024
financial year (i.e. 30 June 2024). Any Performance Rights that do not vest prior to the expiry date of the
Performance Rights will lapse.
2022 Performance Rights Grants
The performance conditions will be tested on a date determined by the Board following the end of the 2025
financial year (i.e. 30 June 2025). Any Performance Rights that do not vest prior to the expiry date of the
Performance Rights will lapse.
The Company will issue or procure the transfer of Company ordinary shares on the exercise of Performance Rights
in accordance with the Performance Rights Plan rules and the terms of the Performance Rights.
Shares allocated on exercise of Performance Rights will rank equally with shares in the same class.
An alignment grant was made to the Managing Director of Strategic Corporate Development on the following terms:
Nature
The Alignment Grant is a long-term incentive award directly linked to long-term successful outcomes related to the
acquisition of the NGI Strategic Portfolio. It is a grant of Navigator shares which can be settled through the issue of
shares or cash at the Company’s election following vesting. The grant is divided into two tranches.
Performance
conditions
Tranche 1:
Must remain an employee at vesting date or have not provided notice to terminate their
employment; and
Navigator must have been paid at least the Preferred Minimum Distribution Amount for each
of the 2021 to 2024 financial years in accordance with the terms of the acquisition of the NGI
Strategic Portfolio.
Tranche 2:
Must remain an employee at vesting date or have not provided notice to terminate their
employment; and
Tranche 1 vesting requirements were met; and
Total earnings to Navigator from the NGI Strategic Portfolio equals or exceeds $35 million;
and
Aggregate assets of the NGI Strategic Portfolio (non-ownership adjusted) equals or exceeds
$40 billion.
Performance
period
Tranche 1:
Performance period of four years from 1 July 2021 to 30 June 2025
Vesting date of 30 June 2025 with settlement in the 2026 financial year.
Tranche 2:
Performance period of five years from 1 July 2021 to 30 June 2026
Vesting date of 30 June 2026 with settlement in the 2027 financial year.
Page 27
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Overview of remuneration policy and approach (continued)
For the 2023 financial year, the proportion of remuneration between fixed and variable components for KMPs is as follows:
Chief Executive Officer
68%
32%
Chief Financial Officer
52%
Other KMP
62%
48%
38%
Fixed Compensation
Variable Compensation
Further detail regarding the methodology for determining the 2023 financial year annual bonus pools are contained on page 29.
Relationship between remuneration policy and company performance
In implementing the remuneration policy and structure, the Board has had regard to what it considers to be the key measure
of the profitability of the Company:
Adjusted EBITDA –
Earnings before interest, tax, depreciation, and amortisation from continuing operations, adjusted for:
the reduction of occupancy costs recorded below the EBITDA line due to the implementation of AASB 16
Leases
the unrealised change in fair value on financial assets and liabilities
non-recurring transaction costs associated with investment acquisitions and financing activities.
The following table shows a summary of the Group’s key performance measures over the past 5 years:
Adjusted EBITDA
Net profit after tax
US$’000
2023
2022
2021
2020
2019
48,814
46,528
31,5872
30,5181
37,6521
35,512
38,701
26,755
18,148
26,843
Dividends paid during the financial year
9,004
31,414
18,421
28,208
27,451
Closing share price (AUD dollars)
1.33
1.25
1.78
1.19
Change in share price (AUD dollars)
▲ 0.08
▼ 0.53
▲ 0.59
▼ 2.75
3.94
▼ 1.40
1
2
Adjusted EBITDA for FY2018-2020 is equal to statutory EBITDA
2021 Adjusted EBITDA is calculated as per the prior year before comparatives were restated to align with current year
methodology.
Page 28
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Variable compensation for the 2023 financial year
Lighthouse variable compensation arrangements
The Lighthouse general bonus pool is determined with reference to Lighthouse EBITDA (ex-bonuses and performance fees).
The Board may exercise discretion to increase the bonus pool where it considers the circumstances warrant additional
remuneration. The Board has set the following arrangements for determining the size of the Lighthouse short term cash bonus
pools:
Lighthouse general pool
Lighthouse incentive fee pool
Company performance
metric
Basis of variable
remuneration
Company performance
metric
Basis of variable
remuneration
Lighthouse EBITDA
(excluding performance
fees, before bonuses and
adjusted for other
specified items)
30-35% allocated to
Lighthouse general bonus
pool
Performance fees
50% allocated to
Lighthouse incentive fee
bonus pool
All Lighthouse staff are eligible to participate in the
Lighthouse general bonus pool, the amount of which is
calculated as 30-35% of Lighthouse’s EBITDA (before the
bonus pools and excluding performance fee revenue and
adjusted for other specified items).
Allocation of the Lighthouse general bonus pool to staff
(other than as noted below) is determined by the CEO
in accordance with remuneration structure and
guidelines established by the Remuneration and
Nominations Committee.
A bonus for the CEO is determined and approved by
the board based on an assessment of his
performance. This bonus amount forms part of the
overall Lighthouse general bonus pool.
Certain senior executives have specific short term
compensation arrangements which are linked to specific
metrics such as revenue and EBITDA of the business
lines/products for which they are responsible. Details on
these arrangements for KMPs are outlined on the following
pages.
Senior members of the Lighthouse investment team are
eligible to participate in a bonus pool determined as 50% of
performance fee revenue earned by the various funds
managed by Lighthouse.
This pool is allocated at the discretion of the CEO based on
his assessment of the contribution of each eligible staff
member to the creation of the performance fee revenue.
The allocation of the pool occurs after determining the
bonus amounts for the small number of senior investment
employees who have performance conditions which apply
to their annual bonuses. The specific performance
conditions are set to incentivise those employees to
achieve outcomes directly relevant to their roles and
responsibilities, such as achievement of a defined level of
net performance return for a particular fund or portfolio for
which they are responsible. There is generally a minimum
and a maximum applied to these bonuses.
Investment team staff members may still also receive an
allocation from the general bonus pool.
The Board retains the discretion to vary the final amounts approved after calculation based on the above pools, to ensure that
they can also factor in extenuating circumstances. The Board approved $6.2 million of additional discretionary bonuses for the
FY23 year above the amounts calculated under the Lighthouse general bonus pool and Lighthouse incentive fee pool as
outlined above. This approval was on the basis of ensuring retention of key staff in what is currently a very competitive
environment in the US asset management sector.
NGI Strategic and Corporate variable compensation arrangements
Discretionary short-term bonuses totalling $1.1 million were awarded for staff who:
directly contributed to the operation of the listed parent company, namely staff involved in finance and company secretarial
functions in Australia; and/or
were responsible for the successful completion of the NGI Strategic investment transactions completed during the 2023
financial year. These awards were based on the relevant individual’s contribution in assessing, negotiating and
implementing complex transactions.
The Remuneration and Nominations Committee recommended these bonuses which were approved by the Board.
Page 29
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
CEO remuneration arrangements
Non-executive director remuneration
Mr McGould is based in the US and performs two key roles
for the Group. He is both:
Chief Executive Officer of the NGI Group;
Chief Executive Officer of Lighthouse; and
Chief Investment Officer of Lighthouse.
The Board considers that Mr McGould’s remuneration
needs to encompass both of these roles, and that it
should also be structured so that it is consistent with
remuneration principles which operate in the United
States alternative asset management industry.
Mr McGould’s base salary is $1,000,000 which reflects
the scope of his role across the Group as well as his
specific responsibilities to Lighthouse Mr McGould is
also entitled to receive health care benefits, retirement
benefits and nil fees in relation to his investment in
Lighthouse products.
The Board has not set specific key performance
indicators (KPIs) for the CEO. Instead, the Board
awards Mr McGould a discretionary bonus amount,
taking into account the following factors:
investment results achieved for clients;
achievement of board-approved budgets and
targets, strategic goals, capital and business
restructuring and development of new business
opportunities;
growth in AUM, through both net investment flows
and investment performance of Lighthouse
portfolios; and
group financial results and dividends paid to
shareholders.
Mr McGould received a bonus of $350,000 for the year
ended 30 June 2023.
Non-executive directors may receive director fees. The
Company’s policy is to remunerate non-executive directors
at market rates for comparable companies having regard to
the time commitments and responsibilities assumed. The
aggregate of non-executive director fees is capped at a
maximum of $750,000 per annum (including
superannuation), as approved by shareholders at the AGM
held on 20 November 2014.
Fees paid to non-executive directors are USD, and for the
2023 financial year were as follows:
Chairman
Non-executive
directors
USD 170,000 per annum
(plus superannuation)
USD 100,000 per annum
(plus superannuation)
Australian based non-executive directors are also
entitled to superannuation. For the financial year
ended 30 June 2023 actual remuneration for non-
executive directors was $508,021 (2022: $466,835).
A Bluhm elected not to receive remuneration from the
Company for his role as a non-executive director.
Non-executive directors’ fees cover all main board
activities and membership of any committee. Executive
and non-executive directors may be reimbursed for
reasonable expenses properly incurred in their role as
a director. Non-executive directors are not entitled to
participate in executive remuneration schemes, may
not receive performance-linked equity or bonus
payments, and are not provided with retirement
benefits other than statutory superannuation
entitlements. Non-executive directors are not entitled
to any benefits or payments on retirement from office.
Page 30
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Key management personnel remuneration disclosures
Those appointed to key management personnel positions are outlined below:
Name
Position
Term
Non-Executive Directors
Michael Shepherd
Chairman and Non-Executive Director
Full year
Andy Bluhm
Non-Executive Director
Nicola Grenham
Non-Executive Director
Suvan de Soysa
Non-Executive Director
Cathy Hales
Non-Executive Director
Fernando Esteban
Non-Executive Director
Resigned 17 November
2022
Full year
Appointed 22 September
2021
Appointed 22 March
2022
Retired 28 January 2022
Executive Director
Sean McGould
Executives
Rob Swan
Amber Stoney
Ben Browning
Ross Zachary
Group Chief Executive Officer (CEO), Chief Executive Officer,
Lighthouse Investment Partners, LLC, and Chief Investment
Officer, Lighthouse Investment Partners, LLC
Full year
Chief Operating Officer (COO), Lighthouse Investment Partners,
LLC
Full year
Chief Financial Officer (CFO) and Company Secretary, Navigator
Global Investments Limited
Full year
President, Lighthouse Investment Partners, LLC
Managing Director of Strategic Corporate Development, NGI
Strategic Holdings
Full year
Full year
Contractual arrangements for senior executives
The Group has entered into service agreements with each member of key management personnel. These agreements specify
the duties and obligations to be fulfilled.
US-based executives
Service Agreements
The CEO entered into a service agreement commencing on 7 March 2011. The agreement was for an initial term of four years
and thereafter automatically extend for a one-year term unless either the Group or the employee gives not less than sixty days’
notice of their intention not to extend the agreement.
The remaining US-based KMPs entered into revised service agreements effective from 1 July 2021. There is no defined term
period under these service agreements, and their employment continues until terminated by either the employee or the
Company in accordance with the terms of the agreement.
Termination
The Group may terminate the agreements of US-based executives at any time for Good Cause as defined under their service
agreement. In these circumstances there is no entitlement to a termination payment.
The Group may terminate the agreement for any reason at any time by giving not less than sixty days’ notice.
The employees may terminate their agreements at any time on thirty days’ notice for Good Reason as defined under their
service agreement, which may include circumstances where the Group fails to comply in any material respect with the terms of
the agreement, or there is a material and unconsented change to responsibilities. For the CEO and Managing Director of
Strategic Corporate Development, NGI Strategic Holdings, Good Reason includes where there is a material reduction in the
compensation opportunities, there is a material change to the Group’s strategy or there is a change of control of the Company.
The employees may terminate the agreement and their employment at any time for any reason other than those noted above by
giving not less than sixty days’ notice.
Page 31
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Key management personnel remuneration disclosures (continued)
Contractual arrangements for senior executives (continued)
Potential Termination Benefits
Shareholders approved potential termination benefit arrangements at the 2021 Annual General Meeting for US-based
executives as follows:
A severance payment of up to $1 million on cessation of employment, except where their employment has been terminated
for Cause as defined by their employment contract. Any severance payment made is in lieu of any unpaid short-term
incentive bonus which they would otherwise be entitled to receive for their performance during the relevant year in which
they ceased employment. The amount of the severance payment will be pro-rated based on the number of days of service
provided by the US Relevant Executive during a year prior to cessation of their employment.
Restraint payments may be paid to enforce post-employment restraint clauses if considered necessary and/or appropriate
to protect matters such as non-compete periods, non-solicit periods and confidential information or intellectual property. In
some jurisdictions, restraint clauses may be legally unenforceable, or difficult to successfully enforce, without payment.
The amount of the restraint payment is determined based on the following circumstances:
If employment ceases due to termination for Cause, their providing notice to the Company, or them not renewing their
contract then:
-
-
they will be entitled to restraint payments for 6 months at their monthly base salary; and
the Board will have the option, but not the obligation, to extend the restraint period for up to an additional 6 months
by paying the Relevant Executive a restraint payment of up to $166,667 per month.
If employment ceases due to the Company providing the required contractual notice, the Board has the discretion, but not
the obligation, to enforce the restraint clauses in the employment contract for up to 12 months by paying the Relevant
Executive a restraint payment of up to $166,667 per month.
These payments are capped at a maximum of $2 million.
Annual bonus arrangements and 2023 financial year awards
In addition to their base salary and benefits, each of the US-based KMPs are entitled to the following bonus compensation as
follows:
Group Chief Executive Officer
Remuneration arrangements for the CEO are outlined on page 30.
Chief Operating Officer,
Lighthouse Investment
Partners, LLC
The performance conditions for components of the Chief Operating Officer’s bonus have
been set in acknowledgement of his role as a head of the Luminae Managed Account
Services business, and are designed to incentive revenue growth in that business.
Performance condition
Met for FY2023
Minimum annual bonus Minimum amount of not less than
$200,000, additional amount may
be awarded at the discretion of
the CEO.
(Minimum amount classified as
fixed remuneration)
X
Revenue Linked bonus
resulted in higher amount
than the minimum bonus
amount
OR
Revenue Linked
amount
Calculated as 4.25% of Revenues
of the Managed Account Services
clients less any base salary
received during the year.
✓
Additional discretionary
amount awarded
The employee must satisfy the following Payment Requirements in order to receive the
bonus:
remain an employee as at the end of the financial year, or not have provided notice
to terminate the service agreement as at that date; and
all representations and warranties made by the employee as set out in the service
agreement are still true and accurate.
Page 32
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Key management personnel remuneration disclosures (continued)
Contractual arrangements for senior executives (continued)
President,
Lighthouse Investment
Partners, LLC
The performance conditions for components of the President’s bonus have been set to
incentivise revenue growth across the Lighthouse business through the Revenue Target
bonus, as well as ensuring a focus on cost management through the EBITDA Target bonus.
Performance condition
Met for FY2023
Minimum annual
bonus
Revenue Target
50% of fixed
remuneration
OR
100% of fixed
remuneration
EBITDA Target
25% of fixed
remuneration
Minimum amount of not less than
$650,000, additional amount may
be awarded at the discretion of the
CEO.
(Minimum amount classified as fixed
remuneration)
If Covered Business achieves
minimum Top Line Revenue Growth
targets
If Covered Business achieves Top
Line Revenue Growth stretch
targets
If EBITDA margin target is achieved
✓
X
X
X
To the extent that a Revenue Target or EBITDA Target is awarded for a financial year, 50%
of such compensation will be paid in cash soon after period end, while the remaining 50%
shall be deferred over a period of three years.
The employee must satisfy the following Payment Requirements in order to receive the
bonus:
remain an employee as at the end of the financial year, or not have provided notice to
terminate the service agreement as at that date; and
all representations and warranties made by the employee as set out in the service
agreement are still true and accurate.
Managing Director of
Strategic Corporate
Development,
NGI Strategic Holdings
This Managing Director is responsible for a growing segment of Group operations, and
annual bonus amounts are awarded at the discretion of the CEO after considering
performance and achievements in relation to that business.
Performance condition
Met for FY2023
Discretionary amount
in the range of at least
100% to 300% of his
base salary
No specified performance
conditions.
(The minimum end of the range is
classified as fixed remuneration)
✓
260% of base salary
awarded.
Based on CEO’s
assessment of
performance.
Participation in long-term incentive plans
The CEO and Managing Director of NGI Strategic Holdings are entitled to participate in the Performance Rights Plan, a long-
term incentive plan as outlined on pages 25-27. Grants made in the current period are outlined on pages 36-37. The Managing
Director of NGI Strategic Holdings was awarded a one-time Alignment Grant in 2021, the details of which are outlined on page
27.
The President of Lighthouse is eligible to participate in any long-term incentive plan that may be implemented by Lighthouse.
No such plans are currently in place.
Page 33
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Key management personnel remuneration disclosures (continued)
Contractual arrangements for senior executives (continued)
Australian Based executives
Service Agreement
The Australian based CFO is engaged pursuant to an executive services agreement for 30 hours per week for a base salary of
A$400,000 per annum (USD equivalent for the current year of $270,777) exclusive of superannuation, and a short-term
incentive bonus of up to 50% of this amount.
Termination
The Group may terminate the CFO’s executive services agreement at any time, without notice for a number of reasons including
bankruptcy, gross negligence or wilful and serious misconduct. In these circumstances there is no entitlement to a termination
payment. The CFO may terminate the agreement at any time by giving 6 months’ notice and the Group may terminate the
agreement at any time by giving 6 months’ notice or payment in lieu.
Annual bonus arrangements and 2023 financial year award
The CFO is entitled to a short-term incentive bonus of up to 50% of her base salary. The Board may exercise its discretion to
award an additional bonus amount. Ms Stoney a was awarded a bonus of 50% of her base salary for the 2023 financial year
based on the assessment of her performance by the Remunerations and Nominations Committee.
Participation in incentive plans
The CFO is eligible to participate in the Performance Rights Plan, a long-term incentive plan as outlined on pages 25-27.
Grants made in the current period are outlined on pages 36-37.
Remuneration arrangements for Non-executive directors
Service Agreement
Navigator enters into agreements with each non-executive director at the time of their appointment as a director. Each
agreement sets out the rights and obligations of the director, including:
Attendance at board meetings
Prior approval for acceptance of additional roles outside Navigator
Independence requirements and notification of interests
Remuneration
Provision of a Deed of Indemnity, Insurance and Access
Directors are also required to enter a Director’s Interest Disclosure Agreement at the time of their appointment.
Termination
A director may resign at any time by providing notice to the Chairman.
Non-executive directors are required to be elected by shareholders at the next annual general meeting following their
appointment. Directors do not have a fixed term, however they must be re-elected by shareholders at an annual general
meeting at least every three years.
A director may be requested to retire from the Board should they fail to attend three consecutive board meetings without a leave
of absence. In addition, a director may cease to hold office if they become a disqualified person under the Corporations Act
2001.
Non-executive directors are not entitled to any benefits or payments on retirement from office.
Annual bonus arrangements
Non-executive directors are not entitled to participate in executive remuneration schemes, may not receive performance-linked
equity or bonus payments, and are not provided with retirement benefits other than statutory superannuation entitlements.
Participation in incentive plans
Non-executive directors are not entitled to participate in any incentive plans.
Page 34
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Key management personnel remuneration disclosures (continued)
Directors’ and executive officers’ remuneration
The following remuneration was paid to key management personnel during the financial year:
Benefit Category
Short-term
Salary &
fees
Bonus
Other1
Post-
employment
Pension &
Super-
annuation
Other long-term
Total
Share
based
payment
s
Long
service
leave
Non-Executive Directors
Michael Shepherd
2023
170,000
2022
2023
2022
2023
2022
2023
2022
170,000
100,000
100,000
100,000
77,500
100,000
27,688
Nicola Grenham
Suvan de Soysa2
Cathy Hales3
Executive Director
-
-
-
-
-
-
-
-
Sean McGould
2023
1,000,000
350,000
2022
1,000,000
500,000
Executives
Rob Swan
Ben Browning
Ross Zachary
Amber Stoney
2023
2022
2023
2022
2023
2022
2023
2022
300,000
800,000
300,000
800,000
350,000
650,000
350,000
716,849
300,000
780,000
250,000
675,000
271,120
132,600
291,644
86,244
Total
2023
2,691,120
2,712,600
2022
2,566,832
2,778,093
-
-
-
-
-
-
-
-
24,749
23,771
24,749
23,771
24,749
23,771
24,843
23,771
-
-
99,090
95,084
17,021
16,962
-
-
10,500
7,750
10,500
2,769
-
-
-
-
-
-
-
-
19,800
138,914
18,300
19,800
18,300
19,800
-
-
-
-
-
-
8,734
291,010
19,087
48,088
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
187,021
186,962
100,000
100,000
110,500
85,250
110,500
30,457
1,533,463
1,542,071
1,144,549
1,142,071
1,044,549
1,090,620
1,404,587
1,015,946
17,020
134,956
6,877
562,573
17,252
-
10,422
405,562
123,175
564,880
6,877
6,197,742
100,240
48,088
10,422
5,598,939
1
2
3
Other short-term fixed remuneration amounts relate to health care benefits paid on behalf of US based staff.
Appointed as a director 22 September 2021
Appointed as a director 22 March 2022
Page 35
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Key management personnel remuneration disclosures (continued)
Analysis of bonuses & share based payment awards included in remuneration
Details of the short-term and long-term incentive bonuses awarded as remuneration to key management personnel of the Group
in the current reporting period are detailed below:
Sean McGould
Rob Swan
Ben Browning
Ross Zachary
Amber Stoney
Proportion of
remuneration paid that
is performance based
32%
52%
0%
55%
48%
Short-term incentives1
Long-term incentives2
% awarded
% forfeited
100%
100%
52%
87%
100%
0%
0%
48%
0%
0%
% Vested in
year
0%
0%
0%
0%
0%
% Forfeited in
year
0%
0%
0%
0%
0%
1 Short-term bonus is paid annually on a financial year basis. No amounts vest in future financial years in respect of the financial year
2
ended 30 June 2023.
Long-term incentive share based payment arrangements are subject to service and performance hurdles measured at various
financial year ends. Details included in following sections of this report
Analysis of equity instruments granted as remuneration
As detailed above the Group has a Performance Rights Plan in place for eligible employees including the CEO. In addition, an
Alignment Grant was made to the Managing Director of Strategic Corporate Development, NGI Strategic Holdings. There have
been no alterations to the terms or conditions of the grants since grant date. Details of all equity instruments granted are
summarised in the following tables:
Equity instruments granted
Tranche
Equity
instruments
granted1
Grant date
Vesting &
exercise date
Fair value per
award at grant
date ($)
Expiry date
Sean McGould
Ross Zachary
Amber Stoney
2021 PR - EBITDA
2021 PR - TSR
2022 PR - EBITDA
2022 PR - TSR
2021 PR - EBITDA
2021 PR - TSR
2022 PR - EBITDA
2022 PR - TSR
2021 PR - EBITDA
2021 PR - TSR
2022 PR - EBITDA
2022 PR - TSR
Ross Zachary
Alignment grant T1
Alignment grant T2
152,905
152,905
152,905
152,905
275,230
275,230
275,230
275,230
152,905
152,905
152,905
152,905
120,976
120,976
2023
30/9/2022
30/06/2024
17/11/2022
30/06/2025
30/9/2022
30/06/2024
30/9/2022
30/06/2025
30/9/2022
30/06/2024
30/9/2022
30/06/2025
2022
1/7/2021
1/7/2021
30/06/2025
30/06/2026
0.68
0.16
0.70
0.36
0.68
0.16
0.64
0.33
0.68
0.16
0.64
0.33
0.91
0.85
30/9/2026
17/11/2026
30/9/2026
30/9/2026
30/9/2026
30/9/2026
1/7/2025
1/7/2025
1Includes instruments held directly, indirectly and beneficially by KMP.
Of the total performance rights issued to employees in the current year, 50% EBITDA rights and 50% are TSR rights, each with
specific service and performance conditions attached. The fair value at grant date is determined for each right based on the
specific terms and conditions of each. All performance rights have zero exercise price and are subject to continuation of
employment conditions.
Page 36
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Key management personnel remuneration disclosures (continued)
Analysis of equity instruments granted as remuneration (continued)
Summary of equity instruments granted, vested or lapsed during the year for KMP
2023
Grant date
Vesting &
exercise
date
Beginning
balance
unvested
Number
Granted as
compensation1
Number
Toal vested
and
exercisable
Number
Ending
balance
unvested
Number
Maximum
value in
future
periods ($)
Sean
McGould
Ross
Zachary
Amber
Stoney
30/9/2022 30/06/2024
17/11/2022 30/06/2025
1/7/2021 30/06/2025
1/7/2021 30/06/2026
30/9/2022 30/06/2024
30/9/2022 30/06/2025
30/9/2022 30/06/2024
30/9/2022 30/06/2025
-
-
120,976
120,976
-
-
-
-
305,810
305,810
-
-
550,459
550,459
305,810
305,810
1
Includes instruments held directly, indirectly and beneficially by KMP.
-
-
-
-
-
-
-
-
305,810
305,810
120,976
120,976
550,459
550,459
305,810
305,810
42,867
107,502
42,867
99,555
77,161
179,199
55,044
61,698
There were no share based payment arrangements which vested or were forfeited during the period.
Additional information
Movement in shares
The movement during the reporting period in the number of shares in the Company held, directly, indirectly or beneficially, by
key management personnel, including their related parties, is as follows:
Balance
1 July 2022
Purchases
Sales
Balance
30 June 2023
Directors1
Michael Shepherd
Sean McGould
Nicola Grenham
Suvan de Soysa
Cathy Hales
Executives
Rob Swan
Ross Zachary
Amber Stoney
145,270
19,438,083
6,450
150,000
10,000
2,936,512
20,000
180,374
50,000
1
-
-
-
-
20,000
-
-
-
-
-
-
-
-
-
195,270
19,438,084
6,450
150,000
10,000
2,936,512
40,000
180,374
1 Refer to page 21 for details on direct and indirect shareholdings by Directors.
Other transactions with key management personnel
A donation of $100,000 was made to Oxbridge Academy, a director related entity of the CEO, Sean McGould. There were no
other transactions with key management personnel during the year.
This marks the end of the remuneration report.
Page 37
Navigator Global Investments Limited
Directors’ Report
Significant changes in state of affairs
Indemnification and insurance
In the opinion of the directors there were no significant
changes in the state of affairs of the Group that occurred
during the financial period not otherwise disclosed in this
financial report.
Events subsequent to end of financial period
On 1 August 2023, the Group entered into definitive
documentation for a transaction with certain affiliates of GP
Strategic Capital (formerly known as Dyal Capital) (“GP
Strategic Affiliates”), a platform of Blue Owl (NYSE: OWL)
regarding the accelerated acquisition of incremental profit
distributions and settlement of the 2026 redemption liability
for total consideration of $200 million.
This will result in:
a) Cancellation of the scheduled redemption payment in
CY26 (currently recorded as a non-current liability at
present value on the Group’s balance sheet (Note
18(a))) to acquire GP Strategic Capital Affiliates’ share
of profit distributions from the NGI Strategic Portfolio;
and
b) Acquire GP Strategic Capital Affiliates’ share of profit
distributions from the NGI Strategic Portfolio with effect
from 1 July 2023. This will entitle the Group to 100% of
distributions received from the portfolio with no
corresponding payable to non-controlling interest such
as that in current trade and other payables.
Consideration will be funded by a combination of an
entitlement offer to all Navigator shareholders and
convertible note holders, a placement of Navigator shares
to GP Strategic Capital Affiliates, with remaining
consideration paid by cash or debt to a maximum of $40
million.
The transaction which is subject to shareholder & other
regulatory approvals, will be structured so that GP Strategic
Capital Affiliates’ relevant interest in Navigator’s ordinary
shares will not exceed 46.5% as convertible notes will be
issued to GP Strategic Affiliates to give the effect to the
economic terms of the Entitlement Offer or Placement (as
applicable).
Assuming the transaction settles in December 2023, the
expected impact on the profit and loss will be an expense
of $34.7 million excluding transaction costs. This reflects a
fair value adjustment to bring the redemption payment
liability its gross value of $200 million.
Other than the above, there has not arisen in the interval
between the end of the reporting period and the signing
date of this report, any item, transaction or event of a
material nature, likely to affect significantly the operations
of the Group, the results of those operations, or the state of
affairs of the Group, in future financial years.
Environmental regulation
The Group is not subject to any particular or significant
environmental regulation under any Australian
Commonwealth, State or Territory legislation.
Page 38
The Company has a Deed of Indemnity, Insurance and
Access in place with each of the Directors (‘the Deeds’).
Pursuant to the Deeds, the Company indemnifies each
Director to the extent permitted by law for losses and
liabilities incurred by the Director as an officer of the
Company or of a subsidiary. This indemnity is in place for
a 7 year period from the cessation of directorship.
In addition, the Company will advance reasonable costs
incurred or expected to be incurred by the Director in
defending relevant proceedings on terms determined by
the Board. No such advances were made during the
financial period.
During the period, the Group paid insurance premiums to
insure the Directors and Officers of the Company. The
terms of the contract prohibit the disclosure of the
premiums paid.
Rounding of amounts
In accordance with ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191
dated 24 March 2016, amounts in the financial report and
directors’ report have been rounded off to the nearest
thousand dollars, unless otherwise stated.
Auditor
Ernst & Young is the auditor of the Group in accordance
with section 327 of the Corporations Act 2001. Details of
remuneration paid to auditors is presented in Note 25 of the
financial statements.
Non-audit services
There were no non-audit services provided by the entity’s
auditors during the financial year.
Indemnification
To the extent permitted by law, the Company has agreed to
indemnify its auditors, Ernst & Young Australia, as part of
the terms of its audit engagement agreement against
claims by third parties arising from the audit (for an
unspecified amount).
No payment has been made to indemnify Ernst & Young
Australia during or since the end of the financial year.
Auditor’s independence declaration
The lead auditor’s independence declaration as required
under section 307C of the Corporations Act 2001 is set out
on page 39 and forms part of the directors’ report for the
financial year ended 30 June 2023.
This report is made in accordance with a resolution of
directors:
Michael Shepherd, AO
Chairman and
Non-Executive Director
Sydney, 24 August 2023
Suvan de Soysa
Non-Executive Director
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Auditor’s Independence Declaration to the Directors of Navigator Global
Investments Limited
As lead auditor for the audit of Navigator Global Investments Limited for the financial year ended
30 June 2023, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b) no contraventions of any applicable code of professional conduct in relation to the audit; and
c) no non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Navigator Global Investments Limited and the entities it controlled
during the financial year.
Ernst & Young
Nathan Young
Partner
24 August 2023
Page 39
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Navigator Global Investments Limited
2022 Annual Report
FINANCIAL
STATEMENTS
Page 40
Navigator Global Investments Limited
2023 Annual Report
CONTENTS
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
42
43
44
45
47
48-94
Operating assets and
liabilities
Capital and risk
10. Trade receivables & other
64
19. Capital management
assets
11.
12.
Investments at fair value
Investments in joint ventures
and associates
20. Capital & reserves
65
21. Financial risk
management
66
.
77
78
79
Results for the year
1. Operating segments
2. Revenue
3. Expenses
48
50
52
4.
Finance income & costs
54
5. Cash
6.
Income tax
7. Dividends
8. Earnings per share
9. Acquisitions
56
57
59
60
61
13. Plant and equipment
14. Leases
15.
Intangible assets
16. Trade and other payables
17.
Employee benefits
18.
Other financial liabilities
68
69
72
74
74
75
89
90
91
91
Basis of preparation
28. Corporate information
29. Statement of compliance
30. Basis of measurement
31. Functional and
presentation currency
32. Other accounting
policies
92
92
92
92
93
95
96
Group structure
Other disclosures
22. Group entities
23. Parent entity
disclosures
87
88
24. Related parties
25. Auditors’ remuneration
26. Commitments &
contingencies
27. Subsequent events
Directors’ declaration
Independent auditor’s report
Page 41
Navigator Global Investments Limited
2023 Annual Report
INCOME STATEMENT
For the year ended 30 June 2023
Consolidated USD’000
Note
2023
2022
Management fee revenue
Performance fee revenue
Revenue from reimbursement of fund operating expenses
Revenue from provision of office space and services
Total revenue
Other income
Employee expenses
Administration and other general expenses
Depreciation and amortisation expense
Share of profits / (loss) from joint ventures and associates
Results from operating activities
Finance income
Finance costs
Profit before income tax
Income tax expense
Profit for the period
2(a)
2(a)
2(a)
2(a)
2(b)
3(a)
3(b)
3(c)
4(a)
4(a)
6(a)
76,674
6,862
96,620
4,741
73,515
10,632
42,589
2,636
184,897
129,372
31,815
(55,633)
(110,915)
(5,592)
638
45,210
36,922
(38,127)
44,005
(8,493)
35,512
28,775
(50,732)
(56,592)
(4,820)
58
46,061
51,326
(51,664)
45,723
(7,022)
38,701
Attributable to equity holders of the parent
35,512
38,701
Earnings per share
Basic earnings per share
Diluted earnings per share
Consolidated US cents
2023
2022
8
8
15.03
11.61
18.47
13.94
Page 42
The accompanying notes form part of these consolidated financial statements
Navigator Global Investments Limited
2023 Annual Report
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2023
Consolidated USD’000
Note
2023
2022
Profit attributable to equity holders of the parent
35,512
38,701
Other comprehensive income
Other comprehensive income that may be reclassified to profit and
loss in subsequent periods:
Exchange differences on translation of foreign operations
4(b)
(325)
(436)
Other comprehensive income not to be reclassified to profit and
loss in subsequent periods:
Change in fair value of financial assets at fair value through other
comprehensive income
Income tax on financial assets at fair value through other
comprehensive income
4(b)
4(b)
Other comprehensive income for the year
Total comprehensive income for the year, net of tax
Attributable to equity holders of the parent
(18,761)
(225)
(19,311)
16,201
16,201
22
3
(411)
38,290
38,290
Page 43
The accompanying notes form part of these consolidated financial statements
Navigator Global Investments Limited
2023 Annual Report
STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
Consolidated USD’000
Note
2023
2022
Assets
Cash
Trade receivables and other assets
Current tax assets
Total current assets
Investments at fair value
Investment in joint ventures and associates
Plant and equipment
Right-of-use assets
Deferred tax assets
Intangible assets
Other non-current assets
Total non-current assets
Total assets
Liabilities
Trade and other payables
Lease liabilities
Employee benefits
Current tax liabilities
Other financial liabilities
Total current liabilities
Trade and other payables
Lease liabilities
Employee benefits
Deferred tax liabilities
Other financial liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Non-share capital
Reserves
Accumulated losses
Total equity attributable to equity holders of the parent
5
10
6(b)
11
12
13
14(a)
6(c)
15
10
16
14(a)
17
6(b)
18
16
14(a)
17
6(c)
18
20(a)
20(b)
67,818
24,382
93
92,293
94,041
18,704
183
112,928
495,918
386,946
13,897
10,162
19,766
28,653
96,308
5,928
670,632
762,925
40,627
3,595
3,011
1,487
97,938
146,658
350
23,127
9
-
171,243
194,729
341,387
421,538
368,165
87,824
45,389
(79,840)
421,538
13,498
6,721
18,101
34,157
94,323
6,704
560,450
673,378
45,865
2,466
3,745
576
48,344
100,996
302
22,080
4
107
136,372
158,865
259,861
413,517
356,186
99,818
41,879
(84,366)
413,517
Page 44
The accompanying notes form part of these consolidated financial statements
Navigator Global Investments Limited
2023 Annual Report
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023
Consolidated USD’000
Note
Share
Capital
Non-share
Capital
Amounts attributable to equity holders of the parent
Share
Based
Payments
Reserve
Parent
Entity
Profits
Reserve
Translation
Reserve
Fair Value
Reserve
Accumulated
Losses
Total
Equity
356,186
99,818
13,326
(1,758)
414
29,897
(84,366)
413,517
Balance at 1 July 2022
Net profit for the period
Transfer to parent entity profits reserve1
Other comprehensive income
Foreign Currency translation differences, net of
tax
Net change in fair value of financial assets at fair
value through other comprehensive income
Income tax on other comprehensive income
Total other comprehensive loss, net of tax
Total comprehensive income for the year, net
of tax
Convertible note redemption
Transaction costs
Dividends to equity holders
Share based payments
20(a)
20(a)
7
3(a)
11,994
(11,994)
(15)
-
-
-
-
-
Total transactions with owners
11,979
(11,994)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
839
839
-
-
-
(17,905)
(222)
-
-
(325)
-
-
(18,127)
(325)
-
35,512
35,512
30,127
(30,127)
-
-
-
-
-
-
(325)
(856)
(18,761)
(3)
(225)
(859)
(19,311)
(18,127)
(325)
30,127
4,526
16,201
-
-
-
-
-
-
-
-
-
-
-
-
(9,004)
-
(9,004)
-
-
-
-
-
-
(15)
(9,004)
839
(8,180)
Balance at 30 June 2023
368,165
87,824
14,165
(19,885)
89
51,020
(79,840)
421,538
1 Relates to the net profit of the parent entity (Navigator Global Investments Limited).
Page 45
The accompanying notes form part of these consolidated financial statements
Navigator Global Investments Limited
2023 Annual Report
STATEMENT OF CHANGES IN EQUITY (CONTINUED)
For the year ended 30 June 2023
Consolidated USD’000
Amounts attributable to equity holders of the parent
Share
Based
Payments
Reserve
Fair Value
Reserve
Translation
Reserve
Parent
Entity
Profits
Reserve
Accumulated
Losses
Total
Equity
Note
Share
Capital
Non-share
Capital
320,146
99,818
13,326
(1,783)
850
20,613
(82,369)
370,601
Balance at 1 July 2021
Net profit for the period
Transfer to parent entity profits reserve1
Other comprehensive income
Foreign Currency translation differences, net of
tax
Net change in fair value of financial assets at fair
value through other comprehensive income
Income tax on other comprehensive income
Total other comprehensive loss, net of tax
Total comprehensive income for the year, net
of tax
Issue of share capital
20(a)
37,752
Transaction costs
20(a)
(1,712)
Dividends to equity holders
7
Total transactions with owners
-
36,040
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22
3
25
25
-
-
-
-
-
-
(436)
-
-
(436)
-
38,701
38,701
40,698
(40,698)
-
-
-
-
-
-
-
-
-
(436)
22
3
(411)
(436)
40,698
(1,997)
38,290
-
-
-
-
-
-
(31,414)
(31,414)
-
-
-
-
37,752
(1,712)
(31,414)
4,626
Balance at 30 June 2022
356,186
99,818
13,326
(1,758)
414
29,897
(84,366)
413,517
1 Relates to the net profit of the parent entity (Navigator Global Investments Limited).
Page 46
The accompanying notes form part of these consolidated financial statements
Navigator Global Investments Limited
2023 Annual Report
STATEMENT OF CASH FLOWS
For the year ended 30 June 2023
Consolidated USD’000
Note
2023
2022
Cash flows from operating activities
Cash receipts from operating activities
Cash paid to suppliers and employees
Cash generated from operations
Distributions received from investments
Profit share payment to non-controlling interests
Bank interest received
Lease interest received
Lease interest paid
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
5(b)
183,034
(166,781)
16,253
66,860
(42,483)
463
232
(1,024)
(2,445)
37,856
130,730
(102,006)
28,724
71,281
(9,444)
10
241
(867)
(207)
89,738
(8,011)
(2,816)
(49)
(88)
9,9(a)
(51,656)
(29,750)
Capital expenditure on plant and equipment & internally developed
software intangibles
Net proceeds from disposing/(purchase to acquire product
investments)
Acquisition of equity investments (including deferred consideration
paid)
Dividends received from/ (investments in) joint ventures and
associates
Transaction cost associated with acquisitions
Proceeds from security deposit returns
Net cash (used in)/from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings & associated fees
Proceeds from issuing shares
Transaction costs associated with the issue of shares
Lease payments received from finance leases
Payment of principal portion of lease liabilities
Dividends paid to equity holders
Net cash from/(used in) financing activities
Net (decrease)/increase in cash
Cash balance at 1 July
9(b)-(c),
12
9
20(a)
20(a)
7
Effect of exchange rate fluctuations on cash balances held in
foreign currencies
Cash balance as at 30 June
5(a)
127
(1,975)
(722)
(62,286)
30,000
(20,597)
-
(15)
503
(2,782)
(9,004)
(1,895)
(26,325)
94,041
102
67,818
(13,312)
(1,130)
47
(47,049)
-
-
37,752
(1,712)
487
(3,207)
(31,414)
1,906
44,595
52,097
(2,651)
94,041
Page 47
The accompanying notes form part of these consolidated financial statements
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Results for the year
This section of the notes to the financial statements focuses on the results and performance of the Navigator Global
Investments Limited Group explaining the results for the year, segment information, taxation and earnings per share.
Acquisitions made in recent times are significant to the operating structure of the Group and have also been included in this
section of the financial statements.
Where an accounting policy or key estimate is specific to a single note, the policy or estimate is described in the note to which it
relates.
1. Operating segments
The Group has two reportable segments and are unchanged from the prior reporting period:
Lighthouse Group, which operates as a global absolute return funds manager for investment vehicles; and
NGI Strategic Group, holds several strategic investments on a minority basis. Including the strategic portfolio, Marble
Capital and Invictus Capital investments.
No operating segments have been aggregated to form the above reportable operating segments.
The ‘All other segments’ category includes the parent entity, investments in joint ventures & associates and adjustments to
eliminate on consolidation. Individually these are not considered a reporting segment.
The CEO is responsible for day-to-day operations and the implementation of the Group’s business strategy. Internal
management reports are provided to the CEO on a monthly basis including separate analysis for the Lighthouse, NGI Strategic
& NGI Parent divisions to monitor the operating results of its business for the purpose of making decisions about resource
allocation and performance assessment.
Divisional performance is evaluated based on the financial information as set out below, as well as other key metrics such as
Assets under Management and the average management fee rate.
Page 48
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
1. Operating segments (continued)
USD’000
Lighthouse
NGI Strategic
Total reportable
segments
All other segments
Consolidated
Reportable Segments
Revenue
Other revenue
Total revenue from contracts with
customers
Other income
Share of profit from associates & joint
ventures
Employee expenses
Operating expenses (excluding
depreciation and amortisation)
Result from operating activities
Net finance income / (costs) (excluding
interest)
Other non-operating expenses
Earnings before interest, tax,
depreciation and amortisation
Interest revenue
Interest expense
Depreciation and amortisation
Reportable segment profit / (loss)
before income tax
Income tax (expense) / benefit
Reportable segment profit / (loss) after
income tax
Segment assets
Segment liabilities
Net assets
Page 49
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
83,360
101,280
83,772
45,181
184,640
128,953
-
-
-
-
-
-
-
-
-
-
83,360
101,280
83,772
45,181
184,640
128,953
31,815
28,775
31,815
28,775
-
-
-
-
176
81
257
-
638
375
44
419
-
58
83,536
101,361
84,147
45,225
184,897
129,372
31,815
28,775
638
58
(51,627)
(48,011)
(2,186)
(1,384)
(53,813)
(49,395)
(1,820)
(1,337)
(55,633)
(50,732)
(108,314)
(54,155)
(1,687)
(1,165)
(110,001)
(55,320)
24,699
26,787
27,942
26,226
52,641
53,013
266
-
(727)
(80)
1,982
(863)
2,469
(972)
2,248
(863)
1,742
(1,052)
24,965
25,980
29,061
27,723
54,026
53,703
257
(1,120)
(5,539)
264
(871)
(4,782)
326
(4,663)
-
-
(22)
-
583
(5,783)
(5,539)
264
(893)
(4,782)
18,563
20,591
24,724
27,701
43,287
48,292
(5,466)
(5,787)
(3,027)
(1,235)
(8,493)
(7,022)
(51)
(976)
1,692
-
716
112
(57)
(53)
718
-
(220)
(110,052)
(55,540)
(1,080)
51,665
51,933
(1,404)
3,940
338
-
(863)
(1,052)
(2,484)
54,742
51,219
10
(56)
(39)
695
(5,840)
(5,592)
274
(949)
(4,821)
(2,569)
44,005
45,723
-
(8,493)
(7,022)
13,097
14,804
21,697
26,466
34,794
41,270
718
(2,569)
35,512
38,701
214,172
(34,434)
210,149
529,268
428,385
743,440
638,534
(31,524)
(306,086)
(227,190)
(340,520)
(258,714)
19,485
(867)
34,844
(1,147)
762,925
673,378
(341,387)
(259,861)
179,738
178,625
223,182
201,195
402,920
379,820
18,618
33,697
421,538
413,517
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
2. Revenue
a) Revenue from contracts with customers
Operating revenue
Management fees from hedge fund clients
Management fees from commingled funds
Management fees from customised solutions clients
Management fees from managed account services clients
Performance fees
Total operating revenue
Other revenue
Revenue from reimbursement of fund costs
Revenue from provision of office space and services
Total other revenue
Total revenue from contracts with customers
Consolidated USD’000
2023
2022
27,380
21,255
19,150
8,889
6,862
83,536
96,620
4,741
101,361
184,897
20,931
23,501
19,791
9,292
10,632
84,147
42,589
2,636
45,225
129,372
Management fees
Performance fees
Management fees are received from customers for
providing:
investment management / advice and related services
to commingled funds;
investment management / advice to customised
solutions clients; and
managed account services to clients.
Management fee revenue is based on a percentage of the
customer’s portfolio value and is calculated in accordance
with the applicable document or agreement which creates
the contractual relationship with the customer. The
management fee is a single fee which covers all of the
individual components which make up the management
service. Management fee revenue is variable in nature as
it is based on a percentage of the customer’s portfolio
value.
The Group’s obligation to provide management services to
customers is satisfied as and when the customer receives
and consumes the services on a continuous basis. The
Group recognises revenue for the services performed at
the end of each month.
Page 50
Performance fees may be earned on certain fund share
classes and client accounts, other than for managed
account services clients.
The amount of the performance fee is calculated in
accordance with the terms of the applicable contract with
the customer. The entitlement to performance fees for any
given performance period is dependent on the customer’s
portfolio achieving a positive performance, and in some
cases in outperforming an agreed hurdle. Performance
fees are generally also subject to a high watermark
arrangement which ensures that fees are not earned more
than once on the same performance.
The Group satisfies its obligations to provide services in
exchange for the performance fee revenue on a continuous
basis, however the right to receive the revenue is
constrained by achieving the required performance hurdles
and/or high watermark. As such, performance fee revenue
is only recognised to the extent that it is probable that a
significant reversal of the revenue will not occur. Due to
the uncertainty associated with the estimate of
performance fees prior to the end of the performance
period, this revenue is not recognised in the income
statement until the entitlement to receive the fee becomes
certain, which is at the end of the relevant performance
period. At all times prior to this, there is a high probability
of any revenue recognised being reversed. Performance
periods for performance fee arrangements range from
between 1 month to 1 year.
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
2. Revenue (continued)
Revenue from reimbursement of fund costs
The Group is entitled to reimbursement for fund
expenditure that it has paid on behalf of the funds which
includes operating expenses and capital expenditure.
While the funds generally pay their own operating
expenses directly, there are some expenses, such as
financial data services, software development and
technology expenses, where it is more practical for the
Group to incur and pay the costs and then be reimbursed
by the funds.
The Group enters into contracts for the relevant good or
service directly with the third party service providers, and
hence the Group controls the good or service until it
subsequently directs the good or service to be transferred
to the fund.
As the Group controls the good or service before it is
transferred, the Group is not acting in a capacity as agent
for the fund. The Group is required to recognise both:
the expense incurred under the contract with the third-
party service providers (see note 4) to receive the
good or service; and
the revenue to which it expects to be entitled from the
fund in exchange for transferring the good or service.
The revenue and expense in relation to these reimbursed
costs off-set to the extent amounts relate to operating
expenditure as opposed to capital expenditure. The Group
does not add a margin to the original cost of the good or
service transferred to the fund.
Revenue from the provision of office space
and services
The Group has a number of agreements with external
parties to license office space at its New York and London
offices. As part of these agreements, licensees are charged
license fees and service charges on a monthly basis.
The Group’s obligation to provide office space services and
its obligation to provide business services to licensees are
satisfied as and when the customer receives and
consumes the services on a continuous basis. The Group
recognises revenue as the amount to which it has a right to
invoice for the period.
The Group is entitled to:
a license fee and an occupancy-related service charge
as per the terms of the applicable contract with each
licensee as it satisfies its obligations to provide office
space and related services; and
a service charge as per the terms of the applicable
contract with each licensee as it satisfies its obligations
to provide business services.
Major revenue source
8% (2022: 11%) of the Group’s operating revenue relates
to management fees and performance fees earned on the
Lighthouse Diversified commingled funds.
12% (2022: 13%) of the Group’s operating revenue relates
to management fees and performance fees earned on the
Lighthouse Global Long/Short commingled funds.
38% (2022: 28%) of the Groups operating revenue relates
to management fees and performance fees earned on the
North Rock funds.
The Group’s largest individual client represents 12% of
operating revenue (2022: 8%).
The Group’s three largest individual clients combined
represent 26% of operating revenue (2022: 22%).
Page 51
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
2. Revenue (continued)
b) Other income
Distribution income
Share of profits to non-controlling interest holders
Net investment income
Distribution income
Distributions are received from investments the Group
holds in unquoted securities in externally managed entities.
Income is recognised on the date that the Group’s right to
receive payment is established.
3. Expenses
a) Employee expenses
Employee costs and benefits
Share based payments
Total employee expenses
b) Administration and other general expenses
Operating expenses
Professional and consulting expenses
Information and technology expense
Reimbursable fund costs
Occupancy expense
Distribution expense
Insurance
Travel expense
Other expenses
Total operating expenses
Non-operating expenses
Transaction costs associated with acquisitions & debt restructuring
Total administration and general expenses
c) Depreciation and amortisation expense
Depreciation of plant and equipment
Lease depreciation
Amortisation of intangible assets
Total depreciation and amortisation expense
Total expenses
Page 52
Consolidated USD’000
2023
2022
66,860
(35,045)
31,815
71,258
(42,483)
28,775
Share of profits to non-controlling interests
Non-controlling interest holders associated with the
Strategic Portfolio are entitled to a share of profits above a
minimum level of distributions received from the six
investments within the portfolio. This share of profits is
recorded through the profit and loss as the redemption
payment to acquire non-controlling interests and is
recorded as a liability (refer Note 18(a)).
Consolidated USD’000
2023
2022
(54,794)
(839)
(55,633)
(3,674)
(2,830)
(94,540)
(2,107)
(2,487)
(654)
(1,118)
(2,642)
(110,052)
(863)
(110,915)
(2,491)
(3,006)
(95)
(5,592)
(50,732)
-
(50,732)
(3,461)
(2,237)
(42,589)
(1,295)
(1,892)
(686)
(583)
(2,797)
(55,540)
(1,052)
(56,592)
(2,350)
(2,375)
(95)
(4,820)
(172,140)
(112,144)
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
During the period 3,287,460 performance rights were
issued under the Group’s Employee Performance Rights
Plan. In accordance with this plan, half of the rights issued
to each employee are subject to non-market vesting
conditions to achieve target earnings hurdles and the
remaining half are subject to market vesting conditions.
Employee expense includes share based payment
expenses for the proportion of the period services rendered
by employees since grant date.
Reimbursable fund costs
The Group is entitled to reimbursement for fund expenses
that it has paid on behalf of the funds. While the funds
generally pay their own operating expenses directly, there
are some expenses, such as financial data services,
software and technology expenses, where it is more
practical for the Group to incur and pay the expense and
then be reimbursed by the funds.
From January 2021 new cost sharing arrangements were
negotiated with funds whereby additional operating
expenses such as employee costs including salaries,
wages and cash bonuses are passed through for
reimbursement.
Distribution expense
Distribution expenses are paid to external intermediaries
for marketing and investor servicing, largely in relation to
commingled funds. Distribution expenses are variable in
line with AUM and the associated management fee
revenue. This expense is recognised on an accrual basis.
Occupancy expense
Under AASB 16 Leases, occupancy expense relates to
short-term leases, common area maintenance costs and
low value leases.
Lease depreciation
Lease depreciation has been recognised in accordance
with AASB 16 Leases. The Group’s right-of-use assets are
depreciated using the straight-line method over the term of
each lease.
3. Expenses (continued)
Employee expense
The largest operating expense is employee expense which
includes salaries and wages, together with the cost of other
benefits provided to employees such as contributions to
superannuation and retirement plans, health care benefits,
educational assistance and cash bonuses. It also includes
associated payroll costs such as payroll tax and payroll
processing fees.
A defined contribution plan is a post-employment benefit
plan under which the Group pays fixed contributions to a
separate entity and will have no legal or constructive
obligation to pay further amounts. Obligations for
contributions to defined contribution plans are recognised
as an employee benefit expense in profit and loss in the
periods during which services are rendered by employees.
Share based payment expense
The Group provides benefits to small select group of senior
management in the form of share based payment awards
as part of their remuneration. Employees render services in
exchange for shares or rights over shares (‘equity settled
transactions’).
The grant date fair value of share-based payment awards
is recognised as a share based payment expense in the
profit or loss, with a corresponding increase in reserves
within equity. Over the period that the employees
unconditionally becomes entitled to the awards. The
amount recognised as an expense is adjusted to reflect the
number of awards for which the related service and non-
market vesting conditions are expected to be met, such
that the amount ultimately recognised as an expense is
based on the number of awards that meet the related
service and non-market performance conditions at the
vesting date.
For share based payment awards with market based
vesting conditions, the grant date fair value of the share
based payment is measured to reflect such conditions and
there is no true-up for differences between expected and
actual outcomes.
The cumulative expense recognised for share based
payments transactions at each reporting date until vesting
date reflects:
the grant date fair value of the award;
the extent to which the vesting period has expired;
and
the current best estimate of the number of awards
that will vest.
Page 53
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
4. Finance income and costs
a) Recognised directly in profit and loss
Finance income
Unrealised fair value changes in financial assets
36,014
51,053
Consolidated USD’000
2023
2022
213
463
232
-
10
263
36,922
51,326
(31,634)
(1,113)
(171)
(482)
(1,137)
(3,590)
(38,127)
(1,205)
(48,656)
(867)
(1,826)
(233)
-
(82)
(51,664)
(338)
Finance costs
Lease interest expense relates to the Group’s lease
liabilities and is charged to profit and loss over the lease
period to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. Refer to
Note 14 for additional detail.
Interest on borrowing consists of interest and other costs
the entity incurs in connection with the line of credit facility.
Expenses are recognised in the profit and loss over the
period of borrowings using the effective interest method.
This includes transaction costs such as fees paid on the
establishment of loan facilities which for the period totalled
$0.5 million. Other borrowing costs are expensed in the
period in which they are incurred.
Discount unwinds are associated with amortising the cost
of financial liabilities such as the convertible notes debt
component, deferred consideration payable and make
good provision for the Group’s lease obligations.
Realised gain on financial assets
Interest income on bank deposits
Finance income on net investment in finance lease
Total finance income
Finance costs
Unrealised fair value changes in financial liabilities
Lease interest expense
Net foreign exchange loss
Bank charges
Interest on borrowings
Unwinding of discount on financial liabilities & provisions
Total finance costs
Net finance (loss) / income recognised in profit and loss
Fair value movements through profit and
loss
Financial assets (Note 11) and financial liabilities (Note 18
(a)) at fair value through profit and loss are remeasured at
each reporting date. Fair value movements (unrealised) are
reported in the profit and loss on as either finance income
or finance costs depending on whether the fair value
increment or decrement for the reporting period.
Finance income
Finance income on net investment in finance lease is
recognised over the term of the lease based on a pattern
reflecting a constant rate of return on the lessor’s net
investment in the lease. Refer to Note 14 for additional
detail.
Interest income is recognised in profit and loss as it
accrues.
Realised and unrealised foreign currency gains and losses
are reported on a net basis as either finance income or
finance costs depending on whether foreign currency
movements result in a net gain or net loss position for the
reporting period.
Page 54
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
4. Finance income and costs (continued)
b) Recognised directly in comprehensive income
Consolidated USD’000
2023
2022
(325)
(18,761)
(225)
(19,311)
(18,986)
(325)
(436)
22
3
(411)
25
(436)
Foreign currency translation differences
Unrealised fair value changes in financial assets
Income tax expense recognised directly in equity
Total finance loss
Recognised in:
Fair value reserve
Translation reserve
Fair value movements through
comprehensive income
Financial assets at fair value through other comprehensive
income are carried in the statement of financial position at
fair value, with changes in fair value reported in other
comprehensive income and presented in the fair value
reserve in equity (refer Note 11).
Upon sale or derecognition of these investments, any gain
or loss will be transferred to retained earnings.
Page 55
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
5. Cash
a) Cash and cash equivalents
Consolidated USD’000
2023
2022
Cash at bank
67,818
94,041
At balance date, AUD cash accounts earn interest of 3.9%
(2022: 0.65%); USD cash accounts earn between 0% -
4.39% (2022: 0-0.75%).
The carrying amount of these assets is a reasonable
approximation of fair value. The Group’s exposure to
interest rate and foreign currency risk on cash is disclosed
in Note 21.
b) Reconciliation of cash flows from operating activities
Cash flows from operating activities
Profit for the period
Adjustments for:
Income tax expense, less income tax paid
Depreciation of plant and equipment
Lease depreciation
Amortisation of intangible assets
Fair value changes in financial assets
Fair value changes in financial liabilities
Non-cash lease (income)/expense & modification gains, net
Interest expense & borrowing cost amortisation (non-cash)
Share based payments
Share of (profit)/loss joint ventures and associates
Net foreign exchange (gain) / loss
Transaction costs associated with acquisitions & business combinations
Operating cash flow before changes in working capital and provisions
(Increase) / decrease in receivables
(Increase) / decrease in other current assets
Increase / (decrease) in payables
Increase / (decrease) in employee benefits
Net cash from operating activities
Page 56
Consolidated USD’000
2023
2022
35,512
38,701
6,047
2,491
3,006
95
(36,227)
31,634
85
3,847
839
(638)
172
-
46,863
(1,857)
(599)
(5,836)
(715)
37,856
6,815
2,350
2,375
95
(51,053)
48,656
(108)
82
-
(58)
1,826
366
50,047
2,125
420
34,283
2,863
89,738
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
6.
Income tax
The Group operates in various tax jurisdictions around the world including Australia, United States of America, and to a smaller
extent United Kingdom, Hong Kong and Ireland. The Group has an Australian tax consolidated group and two separate US tax
consolidated groups; one for the Lighthouse segment and one which includes US entities within the NGI Strategic segment.
Several entities within the NGI Strategic segment are incorporated in the Cayman Islands including the partnership entities
which receive distribution income from portfolio investments acquired in the current year.
Income tax expense comprises current and deferred tax and is recognised in profit and loss, except to the extent that it relates
to items recognised directly in equity or in other comprehensive income.
a) Reconciliation of effective tax rate
Consolidated USD’000
2023
2022
Profit before income tax
Income tax using the Company’s domestic tax rate of 30% (2022: 30%)
Effect of tax rates in foreign jurisdictions
Non-deductible / non-assessable amounts included in accounting profit
Amounts not included in accounting profit
Tax losses / (generated) for which no deferred tax asset is initially recognised
Changes in estimates relating to prior years
Total income tax expense reported in profit and loss
44,005
(13,202)
(33)
8,561
(1,038)
(39)
(2,742)
(8,493)
45,723
(13,717)
2,382
4,834
(499)
2
(24)
(7,022)
b) Current tax assets and liabilities
Current tax assets
Current tax liabilities
Tax receivables & payables
Current tax assets and liabilities represent the amount of
income taxes receivable or payable to the relevant tax
authority, using rates current at reporting date. Income
taxes payable are after the effects of applying any carried
forward losses available and instalments paid during the
period.
Consolidated USD’000
2023
2022
93
(1,487)
183
(576)
Current tax assets and liabilities are offset if there is a
legally enforceable right to offset, and they relate to income
taxes levied by the same tax authority on a tax
consolidated group of entities.
Page 57
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
6.
Income tax (continued)
c) Deferred tax
Carried forward tax losses
Goodwill and intangible assets
Property, plant and equipment
Employee benefits
Financial assets at fair value through profit and loss
Investment in joint ventures and associates
Financial assets at fair value through other comprehensive income
Foreign tax credits
Other items
Net deferred tax assets
Reflected in the statement of financial position as follows:
Deferred tax assets
Deferred tax liabilities
Net deferred tax
Consolidated USD’000
2023
2022
37,271
(11,569)
376
921
(1,637)
(334)
425
856
2,344
28,653
28,653
-
28,653
37,259
(5,703)
492
849
(1,632)
(77)
597
620
1,645
34,050
34,157
(107)
34,050
Deferred tax balances
Recognition of deferred tax assets
Deferred tax assets are only recognised to the extent that it
is probable that future taxable profits will be available
against which the asset can be utilised. An assessment is
made at each reporting date. Deferred tax assets are
reduced to the extent that it is no longer probable that the
related tax benefit will be realised. The carrying value of
both recognised and unrecognised deferred tax assets are
reassessed at each reporting date.
Recognised carried forward losses arose in the Lighthouse
tax consolidated group. At balance date it is considered
more likely than not that these losses and deductible
temporary differences will be fully recovered. This position
is supported by the current profitability of each US Group,
which is expected to continue into the future.
Carried forward tax losses relating to the US Group which
existed prior to 1 January 2018 have a life of 20 years and
will expire during the period from 2029 to 2038. Tax losses
incurred after 1 January 2018 have an indefinite life.
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for taxation purposes. Deferred tax is not recognised
for temporary differences related to investments in wholly-
owned subsidiaries to the extent that it is probable that they
will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected
to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively
enacted by reporting date.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset, and they relate to income
taxes levied by the same tax authority on a tax
consolidated group of entities.
Uncertain tax positions
In determining the amount of current and deferred tax, the
Group takes into account the impact of uncertain tax
positions and whether additional taxes and interest may be
due. This assessment relies on estimates and assumptions
and may involve interpretations of tax law and judgements
about future events. New information may become
available that causes the Group to change its judgement
regarding the calculation of tax balances, and such
changes will impact the profit and loss in the period that
such a determination is made.
Page 58
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
6.
Income tax (continued)
c) Deferred tax (continued)
Deferred tax assets - unrecognised
Deferred tax assets have not been recognised in respect of the following items:
Deductible temporary differences
Unrealised capital losses
Tax losses
Total deferred tax assets - unrecognised
Consolidated USD’000
2023
2022
77,844
4,879
2,679
85,402
81,153
-
3,259
84,412
Unrecognised deferred tax assets relating to the Australian
tax consolidated Group of AUD$121.5 million equivalent
(2022: AUD$122.5 million) consist of carried forward
operating tax losses and deductible temporary differences
primarily relating to financial assets and impairment losses
recognised in previous financial years. Tax losses relating
to the Australian Group and deductible temporary
differences do not expire under current tax legislation.
Unrealised capital losses on financial assets have arisen
from the US Strategic tax group. At balance date it is not
probable that the Australian tax Group or the US Strategic
tax group will produce sufficient taxable profits and/or
capital gains against which these deferred tax assets can
be utilised and therefore the deferred tax assets are
unrecognised.
7. Dividends
The following dividends were paid by the Company during the period:
Final ordinary dividend for the year ended 30 June 2022 of US 3.0 cents
Interim ordinary dividend for the year ended 30 June 2022 of US 5.5 cents
Final ordinary dividend for the year ended 30 June 2021 of US 6.0 cents
The Directors have determined a final unfranked dividend
of US 3 cents per share (with 100% conduit foreign income
credits). The dividend will be paid on 6 October 2023.
The dividends were not determined or provided for as at 30
June 2023, and there are no income tax consequences.
Franking credits
Amount of franking credits available to shareholders of Navigator Global
Investments Limited for subsequent financial years
Dividends paid and declared during the 2023 financial year
have been unfranked. The movement in the franking
account balance relates to foreign currency only.
Page 59
Consolidated USD’000
2023
2022
9,004
-
-
9,004
-
14,998
16,416
31,414
Consolidated USD’000
2023
2022
683
709
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
8. Earnings per share
Basic earnings per share
Diluted earnings per share
Reconciliation of earnings used in calculating earnings per share
Basic and diluted earnings per share (EPS)
Profit attributable to ordinary equity holders of the Company
used in calculating basic and diluted EPS
Consolidated USD
2023
15.03
11.61
2022
18.47
13.94
Consolidated USD’000
2023
2022
35,512
38,701
Weighted average number of shares used in calculating basic and diluted EPS
’000 shares
2023
2022
236,219
209,496
69,581
68,223
305,800
277,719
There have been no other transactions involving ordinary
shares or potential ordinary shares between the reporting
date and the date of authorisation of these financial
statements.
Weighted average number of ordinary shares used in calculating
basic EPS (i)
Adjustment for calculation of diluted EPS relating to Convertible
notes & share based payments (ii)
Weighted average number of ordinary shares used in calculating
diluted EPS
(i) The weighted average number of shares takes into
account the weighted average effect of shares issued upon
conversion of notes in June 2023. In the prior year, the
weighted average effect of shares related to shares issued
through the Institutional placement and share purchase
plan completed in April and May 2022 respectively.
(ii) Diluted earnings per share includes unweighted
contingently issuable shares associated with equity settled
share based payments which are expected to vest had the
contingent period ended at balance date. Potential shares
associated with the convertible notes on issue reduced for
those converted during the period are also included in the
diluted earnings per share calculated.
Page 60
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
9. Acquisitions
Current year transaction
Investment in Invictus Capital Partners
On 4th August 2022, the Group acquired passive investment interests in US based Invictus Capital Partners, LP and four affiliate
entities (collectively ‘Invictus Capital’). Invictus Capital operates in a real estate credit focused alternative asset manager of
private funds and separately managed accounts. They seek attractive risk-adjusted returns by sourcing undervalued high-
quality mortgage loans and financing them efficiently through credit facilities and the securitisation market. The acquisition
expands the Group’s investments in the attractive real estate sector. The Group acquired equity rights of 18.18% across various
Invictus Capital entities and is entitled to 9.09% of carried interest proceeds for total consideration of $100 million. Up front
consideration of $15 million has been paid during the period with the remaining $85 million expected to be payable in cash over
a three year period. Deferred consideration comprises of primary and secondary elements, with primary expected to be paid on
anniversary dates but can be accelerated upon certain terms being met, while the timing of the secondary consideration is
dependent upon Invictus Capital’s mortgage business to achieve a required earnings target or on the third anniversary date at
the latest.
The Group has traditional protective rights over the investment held and has no representation on the board of directors, or
ability to significantly influence operations, it has been determined the acquisition is of an investment in a financial asset which
will be recorded at fair value through comprehensive income. Refer to Note 21 for further details on fair value measurement.
The following table summarises consideration paid & payable for the investment:
At completion (cash):
Deferred (cash):
Total consideration
Total
Consideration
Final
Fair Value
USD $’000
15,000
15,000
85,000
76,324
100,000
91,324
Capitalised transaction costs
1,970
Initial carrying amount
$93,294
Fair value of the investment in Invictus Capital at acquisition is $91.3 million. The differential to total consideration paid and
payable of $8.7 million is a result of discounting deferred components not callable for 12 months, to present value. Deferred
consideration is not contingent upon future events or earnings and as such is not treated as contingent consideration and
remeasured at each balance date. The balance is however classified as current as it is not within the Group’s control to defer
payment beyond twelve months. Transaction costs of $2 million are capitalised to the investment when fair valued through other
comprehensive income.
Page 61
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
9. Acquisitions (continued)
Prior year transactions
a)
Investment in Marble Capital
The Group acquired passive investment interests from Marble Capital, LP (a Texas limited partnership), the investment
manager for two entities; Marble Capital GP Holdings, L.P. and Marble Capital Manager Holdings, L.P (collectively ‘Marble
Capital’). Marble Capital operates in highly sought after segments of the US Real Estate sector, providing flexible capital
solutions for multifamily developers and operators in the US. The acquisition further diversifies the Group’s portfolio into Real
Estate investments in entities with proven track records of attractive returns. On the effective acquisition date of 29 April 2022,
the Group acquired 16.83% of both partnerships for a total consideration of $85 million payable in cash over two years. Both the
upfront and deferred consideration comprises of primary consideration used to invest in the funds Marble Capital operates,
while the secondary consideration is paid to existing principals.
The Group has traditional protective rights over the investment held and has no representation on the board of directors, or
ability to significantly influence operations, it has been determined the acquisition is of an investment in a financial asset which
will be recorded at fair value through comprehensive income. Refer to Note 21 for further details on fair value measurement.
The following table summarises consideration paid & payable for the investment:
At completion (cash):
Deferred consideration (cash):
Total consideration
Net cash outflow on acquisition
Total
Consideration
Final
Fair Value
USD’000
29,750
29,750
55,250
54,721
85,000
84,471
29,750
Fair value of the investment in Marble Capital at acquisition is $84.5 million. The differential to total consideration paid and
payable of $0.5 million a result of discounting deferred components not callable for 12 months, to present value. Deferred
consideration is not contingent upon future events or earnings and as such is not treated as contingent consideration and
remeasured at each balance date. Through to 30 June 2023 $36.7 million of consideration has been paid to Marble sellers
(2022: $29.8 million). The balance of deferred consideration of $18.5 million is classified as a current liability at 30 June 2023
refer to Note 18.
b)
Acquisition of Investment in associate in GROW Investment Group
On 20 September 2021, the Group acquired a 6.67% shareholding in GROW Investment Group (‘GROW‘) a newly formed entity
which will own both Hong Kong and Shanghai based subsidiaries and capitalise on opportunities in the Chinese asset
management industry and the continued evolution of China’s markets.
The Group paid cash consideration of $4 million to fund start up operations and includes negative contingent consideration for
the Group’s equity interest to increase to 10% for no further consideration if earnings targets are not met by an agreed
timeframe. A contingent consideration asset is recorded separate from the investment balance with a fair value at acquisition of
$0.2 million classified within ‘Other assets’. The carrying value of the investment at acquisition date is $3.8 million, the residual
cost of acquisition. Minimal transaction costs were also capitalised to the cost of the investment.
It has been determined that the Group has significant influence over GROW through representation on the board of directors
who are ultimately responsible for the key operating and financial decisions of the company. Refer to Note 12 for further details
on equity accounting for interests in associates.
Page 62
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
9. Acquisitions (continued)
Prior year transactions (continued)
c)
Acquisition of Joint Venture interest in Longreach Alternatives Ltd
On 30 September 2021, the Group acquired a 34.06% shareholding in Longreach Alternatives Ltd (’Longreach’). Longreach is
an Australian based diversified asset management firm that identifies, builds and invests into growing world class alternative
investment management teams. Investment opportunities are across market segments in Australian and the US including
alternative income, private credit, quantitative equity and real assets. The joint venture relationship provides the Group with
collaboration opportunities in the alternative asset industry in Australia.
The Group has joint control with another major shareholder and both are responsible for the overall direction and supervision of
Longreach. Cash consideration of AUD $12.9 million (USD$9.3 million) was paid to acquire the following assets recorded within
the joint venture interest on acquisition date:
Investment in joint venture interest comprises of:
Share of the consolidated net assets of Longreach
Goodwill
Intangibles – Management rights
Total consideration & investment value at acquisition date
Net cash flow on acquisition
Final
USD’000
997
7,958
380
9,312
9,312
Identified intangibles of goodwill and management rights are recorded within the investments carrying value. Transaction costs
of USD $0.7 million were also capitalised to the investment. Purchase price accounting has been finalised in the current period
with the fair value of management right intangibles reducing by USD $0.5 million and an increase to goodwill by USD $0.5
million inclusive of a minor reduction in share of Longreach’s net assets.
Refer to Note 12 for further details on equity accounting for interests in a joint venture.
Page 63
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Operating assets and liabilities
This section provides information on the operating assets and liabilities of the Group, including explanations of key assets
used to generate operating results and the corresponding liabilities. Where an accounting policy or key estimate is specific to
a single note, the policy or estimate is described in the note to which it relates.
10. Trade receivables and other assets
Current
Trade receivables from contracts with customers
Prepayments
Contingent consideration asset
Finance lease receivable
Other receivables
Non-current
Guarantees and deposits
Contingent consideration asset
Finance lease receivable
Consolidated USD’000
Note
2023
2022
17,728
2,314
2,620
508
1,212
24,382
2,978
-
2,950
5,928
15,867
1,654
-
503
680
18,704
2,247
1,000
3,457
6,704
14(b)
14(b)
Trade receivables from contracts with
customers
Trade receivables due from contracts with customers
comprise management service fees, performance fees,
recoverable costs, licence fees, outgoings and other
operating expenses on-charged under agreements with
external parties to licence office space. Related party
receivables at balance date are negligible.
Trade receivables are non-interest bearing and are
generally on 30 to 90 day terms. Trade receivables are
initially recognised at transaction price, being the amount to
which the Group has the right to invoice for the period for
the services or recoverable costs provided.
Due to the short-term nature of the Group’s trade
receivables and the historically low default rate on payment
by customers, there is no credit allowance against trade
receivables as at 30 June 2023 or 30 June 2022. In
determining this credit allowance, the Group has
considered forward looking factors specific to the
receivables and the economic environment and determined
that any allowance would be insignificant.
Other receivables and prepayments
Other receivables and prepayments relate to items such as
prepaid expenses (principally in relation to software
licences and insurance policies), short-term deposits,
interest receivable on cash deposits, pending redemptions
from investments in Group managed products, and the
current portion of finance leases receivable. Further details
are provided for finance lease receivables at Note 14.
Contingent consideration asset
As part of the GROW investment acquired during the
period (Refer Note 9(b)), the Group’s shareholding will
increase by 2.91% (2022: 3.33%) for no further
consideration if earnings targets are not met by an agreed
timeframe. The fair value of this asset was $0.2 million at
acquisition date and is subsequently remeasured each
balance date based on the fair value of the GROW
business and the probability of contingent events occurring.
The carrying amount of these assets is a reasonable
approximation of fair value. The Group’s exposure to credit
risk, currency risk and impairment losses related to trade
and other receivables is disclosed in Note 21.
Page 64
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
11.
Investments at fair value
Financial assets at fair value through other comprehensive income
Investments in unquoted securities of externally managed entities
159,000
84,471
Consolidated USD’000
2023
2022
Financial assets at fair value through profit and loss
Investments in unquoted securities of externally managed entities
Investments in unquoted securities of Group managed entities
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other comprehensive
income comprise non-controlling equity holdings in
unquoted securities of US based entities over which the
Group does not have significant influence.
The Group has elected to account for these investments at
fair value with changes to fair value recognised through
other comprehensive income in the fair value reserve.
Upon sale or derecognition of these investments, any gain
or loss will be transferred to retained earnings.
323,132
13,786
495,918
289,246
13,229
386,946
Financial assets at fair value through profit
and loss
These assets have been classified as fair value through
profit and loss upon initial recognition with changes in fair
value recognised in profit and loss. These investments
comprise of:
Investments in unquoted securities of Group
managed entities; and
Investments in unquoted securities of externally
managed entities which comprise of the six
investments in the NGI Strategic Portfolio. Fair
value movements are recorded through the profit
and loss to better align with the fair value
movements expected in the corresponding
redemption payment liability to acquire non-
controlling interests in the acquired partnerships
(see Note 18).
Note 21 provides details on the methods used to determine
fair value for measurement and disclosure purposes.
Page 65
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
12.
Investment in joint ventures and associates
a) Interest in joint venture
Consolidated USD’000
2023
2022
9,840
-
1,017
(127)
(325)
10,405
-
10,008
268
(436)
9,840
Consolidated USD’000
2023
2022
3,658
-
213
(379)
3,492
-
3,868
-
(210)
3,658
Consideration paid exceeded the Group’s share of
consolidated net assets in Longreach of which the majority,
$7.5 million relates to goodwill given the growth potential in
this business. A value of $0.4 million (2022: provisional
$0.8 million) was allocated as management rights over
several investment mandates in place. These rights are
estimated to have an eight year life and are amortised over
this period, reducing the share of profits recognised.
Intangibles associated with interests in joint ventures are
incorporated within the investment balance on the Group’s
balance sheet. Refer to Note 9(c) for further details on final
acquisition accounting for this investment.
The Group receives a small fee from Longreach for
providing financial and accounting support to maintain the
books and records of the consolidated group. There are no
other fees received, purchases made or commitments to
the joint venture entity as at balance date however
Longreach and Lighthouse are in the process of
establishing a joint venture to distribute products for mutual
benefit.
Longreach is expected to pay dividends in relation to its
profits subject to ensuring ongoing compliance with the
financial requirements under its Australian Financial
Services License.
Opening balance
Acquisition of shareholding inclusive of transaction costs
Share of profit from joint venture net of intangibles amortisation
Dividends received
Foreign exchange translation difference
Balance at 30 June
b) Interest in associates
Opening balance
Acquisition of shareholding inclusive of transaction costs
Gain on deemed disposal
Share of loss from associate
Closing balance
Joint arrangements
Joint arrangements are classified as either joint operations
or joint ventures. The classification depends on the
contractual rights and obligations of each investor, rather
than the legal structure of the joint arrangement.
Investments in joint ventures are accounted for using the
equity method.
The Group has a 34.06% (2022: 34.06%) interest in
Longreach Alternatives Ltd (’Longreach’), a joint venture in
an Australian based diversified asset management firm.
Longreach investments are across market segments in
Australian and the US including alternative income, private
credit, quantitative equity and real assets
The Group jointly controls Longreach with another major
shareholder, both are responsible for the overall direction
and supervision of Longreach. The Shareholders
Agreement is contractually structured so that both major
shareholders are responsible for the overall direction and
supervision of Longreach. Decisions over relevant activities
require both major shareholders to agree.
Page 66
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
12.
Interest in joint ventures and associates (continued)
Associates
Associates are entities over which the Group has
significant influence but not control or joint control. This is
generally the case where the Group holds between 20%
and 50% of the voting rights. Significant influence may exist
for shareholdings less than 20% if through voting power,
significant influence can be demonstrated. Investments in
associates are accounted for using the equity method.
The Group has significant influence over GROW
Investment Group (‘GROW‘) a newly formed entity
capitalising on opportunities in the Chinese asset
management industry and the continued evolution of
China’s markets. The Group holds a 5.84% (2022: 6.67%)
shareholding in GROW and has 20% (2022: 25%)
representation on the board of directors following the
introduction of a new investor in September 2022. The
board is ultimately responsible for the key operating and
financial decisions of the company to which the Group has
influence over.
Consideration paid exceeded the Group’s share of net
assets in GROW as operations are establishing. As such
Goodwill of $3.8 million is incorporated within this
investment balance. Refer to Note 9(b) for further details on
final acquisition accounting for this investment.
The GROW Investment group has a 31 December financial
year end and therefore the Group utilises management
accounts to equity account for this investment. There are
no fees received, purchases made or commitments to the
associate entity. There are no restrictions on the ability for
GROW pay dividends from distributable profits.
None of the Group’s joint ventures or associates are listed
on any public exchange.
Equity method
Under the equity method, the investment in an associate or
a joint venture is initially recognised at cost. The carrying
amount of the investment is adjusted to recognise changes
in the Group’s share of net assets.
Goodwill relating to the associate or joint venture is
included in the carrying amount of the investment and is
neither amortised nor individually tested for impairment.
Identifiable intangibles relating to the associate or joint
venture are also included in the carrying amount of the
investment with the Group’s share of related amortisation
adjusted against the share of profit and loss recorded at
each balance date.
The aggregate of the Group’s share of profit and loss from
associates and joint ventures is shown on the face of the
profit and loss statement and represents profit and loss
after tax and non-controlling interests in the subsidiaries of
associates or joint ventures. Any change in other
comprehensive income of those investees is presented as
part of the Group’s other comprehensive income. In
addition, when there has been a change recognised
directly in the equity of the associate or joint venture, the
Group recognises its share of any changes when
applicable, in the statement of changes in equity.
Unrealised gains and losses resulting from transactions
between the Group and the associate or joint venture are
eliminated to the extent of the interest in the associate or
joint venture.
After application of the equity method, the Group
determines whether it is necessary to recognise an
impairment loss on its investment in its associates or joint
ventures. At each reporting date, the Group determines
whether there is objective evidence that the investment in
the associate or joint venture is impaired. If there is such
evidence, the Group calculates the amount of impairment
as the difference between the recoverable amount of the
associate or joint venture and its carrying value, then
recognises the loss as ‘Share of profit and loss of joint
ventures and associates’ in the profit and loss statement.
Upon loss of significant influence over an associate or joint
control over the joint venture, the Group measures and
recognises any retained investment at its fair value. Any
difference between the carrying amount of the associate or
joint venture upon loss of significant influence or joint
control and the fair value of the retained investment and
proceeds from disposal is recognised in profit and loss.
Page 67
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
13. Plant and equipment
Consolidated US$’000
Furniture &
equipment
Computer
equipment &
software
Leasehold
improvements
Total
Cost
Balance at 1 July 2021
Additions
Disposals
Balance at 30 June and 1 July 2022
Additions
Disposals
Balance at 30 June 2023
Depreciation
Balance at 1 July 2021
Depreciation for the year
Disposals
Balance at 30 June and 1 July 2022
Depreciation for the year
Disposals
Balance at 30 June 2023
Carrying amounts
At 1 July 2021
At 30 June and 1 July 2022
As at 30 June 2023
2,567
345
-
2,912
1,829
-
4,741
(1,465)
(199)
-
(1,664)
(215)
-
(1,879)
1,102
1,248
2,862
7,738
2,175
-
9,913
2,538
-
12,451
(5,690)
(1,636)
-
(7,326)
(1,675)
-
(9,001)
2,048
2,587
3,450
4,662
296
-
4,958
1,565
-
6,523
(1,557)
(515)
-
(2,072)
(601)
-
(2,673)
3,105
2,886
3,850
14,967
2,816
-
17,783
5,931
-
23,715
(8,712)
(2,350)
-
(11,062)
(2,491)
-
(13,553)
6,255
6,721
10,162
Recognition and measurement
Depreciation
Items of plant and equipment are measured at cost less
accumulated depreciation and impairment.
Cost includes expenditures that are directly attributable to
the acquisition of the asset. Purchased software that is
integral to the functionality of the related equipment is
capitalised as part of that equipment. Ongoing repairs and
maintenance is expensed as incurred.
An item of plant and equipment is derecognised upon
disposal or when no further future economic benefits are
expected from its use. Gains and losses on disposal of an
item are determined by comparing the proceeds from
disposal with the carrying amount, and are recognised in
profit and loss.
Depreciation is recognised in the profit and loss on a
straight-line basis over the estimated useful life of the asset
as follows:
Leasehold improvements:
Lease term
Computer software and equipment:
2-3 years
Furniture and equipment:
5-20 years
The residual value, the useful life and the depreciation
method applied to an asset are reassessed at least
annually. The carrying value of plant and equipment is
reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be
recoverable.
Page 68
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
14. Leases
a) Group as lessee
Amounts recognised in the balance sheet
Consolidated US$’000
Office premises
Total
13,700
1,887
4,889
(2,375)
18,101
5,188
(518)
(3,005)
19,766
13,700
1,887
4,889
(2,375)
18,101
5,188
(518)
(3,005)
19,766
Right-of-use assets
Balance at 1 July 2021
Additions
Modification adjustment
Depreciation for the period
Balance at 30 June 2022
Additions
Modification adjustment
Depreciation for the period
Balance at 30 June 2023
Lease liabilities
Balance
at
30 June
2022
Consolidated US$’000
Cash
flows
Foreign
exchange
Modification
adjustment
New
leases
Other
Lease liabilities -
current
Lease liabilities –
non-current
2,466
(2,782)
22,080
-
24,546
(2,782)
-
281
281
-
-
(522)
(522)
5,110
5,110
89
-
89
Transfer
to
current
Balance
at
30 June
2023
3,822
3,595
(3,822)
23,127
-
26,722
The Group discounts lease payments using each leases
incremental borrowing rate and are determined for each
lease based on its maturity profile.
Lease payments have been discounted using incremental
borrowing rates of 3.00% to 6.68% (2022: 3.00% to 4.9%).
The Group classifies interest paid as cash flows from
operating activities.
The lease for Lighthouse’s head office location was
modified during the period to apply a credit of rent for
delayed access to their new premises. The lease term
remains unchanged and the right of use asset and lease
liability were decreased by $1 million as a result.
The Chicago office lease was also modified during the
period to extend the lease term by two years increasing
lease liability by $0.5 million.
Amounts recognised in the statement of profit and loss
Lease interest expense (included in finance costs)
Expense relating to short-term leases (included in occupancy expense)
Expense relating to leases of low-value assets that are not shown above as short-
term leases (included in occupancy expense)
Expense relating to variable lease payments not included in the measurement of
lease liabilities
Income from subleasing right-of-use assets (included in finance income)
Total cash outflow for leases in 2023 was $2.8 million (2022: $3.2million).
Page 69
Consolidated US$’000
2023
2022
1,113
325
3
1,505
232
867
128
3
1,080
263
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
14. Leases (continued)
a) Group as lessee (continued)
Contractual cash flows
30 June 2022 Lease liabilities –
undiscounted
30 June 2023 Lease liabilities –
undiscounted
2023
Total
2022
Total
6 months
or less
6-12
months
1-2 years
2-5 years
More
than 5
years
Consolidated US$’000
-
29,189
1,863
1,587
3,962
14,387
7,390
31,873
-
2,277
2,554
4,594
14,437
8,011
Future finance charges
(5,151)
(4,643)
Lease liabilities in the statement
of financial position
Current
Non-current
26,722
24,546
3,595
2,466
23,127
22,080
Lessee accounting policies
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for
consideration.
Contracts may contain both lease and non-lease
components. The Group allocates the consideration in the
contract to the lease and non-lease components based on
their relative stand-alone prices.
Leases are recognised as a right-of-use asset and a
corresponding liability at the date at which the leased asset
is available for use by the Group. Assets and liabilities
arising from a lease are initially measured on a present
value basis.
The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted
for any lease payments made at or before the
commencement date, plus any initial direct costs incurred
or restoration obligations, less any lease incentives
received.
The right-of-use asset is subsequently depreciated using
the straight-line method over the term of the lease. An
impairment review is undertaken for any right-of-use lease
asset that shows indicators of impairment, and an
impairment loss is recognised against any right-of-use
lease asset that is impaired.
Page 70
The Group has elected not to recognise right-of-use assets
and lease liabilities for short-term leases of office premises
that have a lease term of 12 months or less, and leases of
low-value assets comprising certain equipment. The Group
recognises the lease payments associated with these
leases as an expense on a straight-line basis over the
lease term.
The lease liability is initially measured at the present value
of the remaining lease payments, discounted using the
interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group’s incremental borrowing rate.
Generally, the Group uses its incremental borrowing rate
as the discount rate.
Lease liabilities include the net present value of fixed
payments (including in-substance fixed payments) less any
lease incentives receivable, variable lease payments
(linked to an index or a rate), and any expected residual
value guarantee payments.
Lease payments to be made under reasonably certain
extension options are also included in the measurement of
the liability. Possible future cash outflows amounting to
$16.1 million (2022: $13.9 million) were not included in the
lease liability because it is not reasonably certain that the
leases will be extended.
Lease payments are allocated between principal and
finance cost. The finance cost is charged to profit and loss
over the lease period so as to produce a constant periodic
rate of interest on the remaining balance of the liability for
each period.
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
14. Leases (continued)
b) Group as sublessor
Amounts recognised in the balance sheet
Note
2023
Total
2022
Total
6 months
or less
6-12
months
1-2 years
2-3 years
More
than 3
years
Consolidated US$’000
30 June 2022 Finance lease
receivable – undiscounted
30 June 2023 Finance lease
receivable – undiscounted
Unearned finance income
Finance lease receivable in the
statement of financial position
-
4,820
4,085
(627)
3,458
-
(860)
3,960
Current
508
503
Non-current
2,950
3,457
388
350
347
359
709
734
734
2,642
761
1,881
Amounts recognised in the statement of profit and loss
Finance income on net investment in the lease
232
263
Consolidated US$’000
2023
2022
Current period cash inflows for subleases was
$735 thousand (2022: $727 thousand).
The Group currently subleases one of its office premises
and in both cases for the whole of the remaining term of the
head lease. These leases are classified as a finance lease.
Lessor accounting policies
When the Group is an intermediate lessor, it accounts for
its interests in the head lease and the sublease separately.
At inception of each sublease, the Group determines
whether it is a finance lease or an operating lease. It
assesses the lease classification with reference to the right-
of-use asset arising from the head lease, not with reference
to the underlying asset.
If an arrangement contains lease and non-lease
components, the Group applies AASB 15 to allocate the
consideration in the contract.
Finance income is recognised over the term of the
sublease based on a pattern reflecting a constant rate of
return on the lessor’s net investment in the lease. For
purposes of calculating finance income on the sublease,
the Group has used the incremental borrowing rate on the
head lease.
Page 71
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
15.
Intangible assets
Consolidated US$’000
Goodwill
Trademarks
Software
Client
relationships
Total
Cost
Balance at 1 July 2021
Additions
Balance at 30 June and 1 July 2022
Additions
Work in progress – internally developed
499,519
-
499,519
-
-
1,900
-
1,900
-
-
Balance at 30 June 2023
499,519
1,900
2,050
-
2,050
-
2,080
4,130
1,077
504,546
-
-
1,077
504,546
-
-
-
2,080
1,077
506,626
Amortisation and impairment losses
Balance at 1 July 2021
Amortisation for the year
Impairment losses
(405,718)
(1,283)
(2,050)
(1,077)
(410,128)
-
-
(95)
-
-
-
-
-
(95)
-
Balance at 30 June and 1 July 2022
(405,718)
(1,378)
(2,050)
(1,077)
(410,223)
Amortisation for the year
Impairment losses
-
-
(95)
-
-
-
-
-
(95)
-
Balance at 30 June 2023
(405,718)
(1,473)
(2,050)
(1,077)
(410,318)
Carrying amounts
At 1 July 2021
At 30 June and 1 July 2022
At 30 June 2023
93,801
93,801
93,801
617
522
427
-
-
2,080
-
-
-
94,418
94,323
96,308
Goodwill
Goodwill that arises upon the acquisition of subsidiaries is
included in intangible assets. For the Group’s accounting
policy relating to the measurement of goodwill at initial
recognition through a business combination, refer Note 32.
Following initial recognition, goodwill is measured at cost
less any accumulated impairment losses.
Other intangible assets
Other intangible assets acquired by the Group, which have
finite lives, are measured at cost less accumulated
amortisation and accumulated impairment losses.
Amortisation
Except for goodwill, intangible assets are amortised on a
straight-line basis in profit and loss over their estimated
useful lives, from the date that they are available for use.
The estimated useful lives for the current and comparative
periods are as follows:
Trademarks
Capitalised software costs
20 years
5 years
Amortisation methods, useful lives and residual values are
reviewed at each reporting date and adjusted if
appropriate.
Page 72
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
15.
Intangible assets (continued)
Impairment testing of intangible assets
The carrying amounts of the Group’s intangible assets
which have an indefinite life are reviewed at least annually,
or when an impairment indicator exists. An impairment loss
is recognised if the carrying amount of an asset or its
related cash-generating unit (CGU) exceeds its estimated
recoverable amount.
The recoverable amount of an asset or CGU is the greater
of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a discount rate that
reflects current market assessments of the time value of
money and the risks specific to the asset or CGU. For the
purpose of impairment testing, assets are grouped together
into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of
the cash inflows of other assets or CGU.
Impairment losses are recognised in profit and loss. An
impairment loss recognised in respect of a CGU is
allocated first to reduce the carrying amount of any goodwill
allocated to the CGU and then to reduce the carrying
amount of the other assets in the CGU on a pro-rata basis.
An impairment loss in respect of goodwill is not reversed. In
respect of other assets, an impairment loss is reversed only
to the extent that the asset's carrying amount does not
exceed the carrying amount that would have been
determined, net of depreciation and amortisation, if no
impairment loss had been recognised.
Cash Generating Units
The Group has two CGU’s which is unchanged from the
prior year; the US Lighthouse Group (US CGU) and NGI
Strategic Group (Strategic CGU). Corporate costs, assets
and liabilities associated with the Australian corporate
business are allocated accordingly between each CGU.
Impairment testing as at 30 June
Intangible assets subject to impairment testing, remain
within the US based funds management cash generating
unit (US CGU). An impairment assessment is not required
for the NGI Strategic CGU as no intangibles are associated
and assets are measured at fair value each balance date.
All of the Group’s intangibles are associated with the US
CGU totalling $96.3 million (2022: $94.3 million). The
carrying value of the US CGU tested at 30 June 2023
includes $10.1 million (2022: $6.7 million) of directly
attributable plant and equipment.
Impairment testing carried out on the US CGU as at 30
June 2023 and 30 June 2022 did not result in the
recognition of any impairment losses.
Recoverable amount
The recoverable amount of the CGU was determined
based on a value-in-use calculation where cashflows were
disaggregated between net fee related earnings and
performance fee earnings. Each component has distinctly
different risk profiles and accordingly different discount
rates applied. Historically a blended WACC rate was
applied to consolidated earnings.
The calculation utilises five years of cash flow projections.
The first three years of these projections are based on
financial forecasts approved by the board of directors,
which are then extrapolated over an additional two years.
Revenue for the additional two years is extrapolated using
an independently sourced industry long term growth rate.
Investment management costs and operating expenses are
extrapolated based on ratios consistent with the third year
of the approved financial forecasts.
Key assumptions used in the calculation are discount rates
and terminal value growth rates:
Key assumption
Discount rate – Net fee related
earnings
Discount rate – Performance
fee earnings
Long term & terminal value
growth rate
2023
2022
14%
21%
13.1%
3%
2.1%
The discount rate is a post-tax measure calculated based
on US risk factors as well as other risk factors specific to
the industry and operational nature of the business,
including a market interest rate of 4.6% (2022: 4.1%).
The terminal growth rate is based on the forecast long-term
growth rate for Open-End Investment Funds in the United
States.
A reasonably possible change in these assumptions would
not result in an implied impairment of this CGU.
Page 73
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
16. Trade and other payables
Current
Trade creditors
Distribution costs payable
Accruals
Profit share payable to non-controlling interest
Other payables
Non-current
Other long-term liabilities
Consolidated USD’000
2023
2022
164
723
2,942
34,923
1,875
40,627
350
350
539
505
1,868
42,483
470
45,865
302
302
Trade creditors, accruals & other payables
Profit share to non-controlling interests
Trade creditors are non-interest bearing and normally settle
on 30 to 90 day terms. The carrying amount of these
liabilities is a reasonable approximation of fair value.
Current period accruals includes non-operating accruals of
$0.9 million relating to transaction costs.
Profit share arrangements with non-controlling interests
and related party Blue Owl (formerly Dyal Capital Partners),
relate to the Strategic Portfolio’s earnings. The Group
settles the profit share arrangement in cash within two
months from balance date.
17. Employee benefits
Current
Short-term incentives
Liability for annual leave entitlements
Liability for long service leave entitlements
Non-current
Liability for long service leave entitlements
Consolidated US$’000
2023
2022
2,724
182
105
3,011
9
3,394
251
100
3,745
4
Short-term benefits
Long-term benefits
Short-term employee benefit obligations are expensed as
the related service is provided. A liability is recognised for
the amount expected to be paid under short-term cash
bonus or profit-sharing plans if the Group has a present
legal or constructive obligation to pay this amount as a
result of past service provided by the employee, and the
obligation can be measured reliably. These liabilities are
not discounted.
The Group’s obligation in relation to long-term employee
benefits is the amount of future benefits that employees
have earned in return for their service in the current and
prior periods. That benefit is discounted to determine its
present value. The discount rate used is the relevant
corporate bond rate at reporting date.
Once benefits become entitled, they are transferred to
short-term benefits on the basis they can be taken at the
employee’s request. Amounts are not discounted once
reclassified.
Page 74
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
18. Other financial liabilities
Consolidated USD’000
Note
2023
2022
Current
Deferred consideration payable
9 & 9(a)
Non-current
Deferred consideration payable
9(a)
Borrowings
Financial liabilities at amortised cost – Convertible notes
Financial liabilities at fair value – Redemption payment liability
(a)
97,938
97,938
-
9,581
1,655
160,007
171,243
48,344
48,344
6,399
-
1,600
128,373
136,372
Current and non-current classification
Convertible notes
The Company issued 102,283 convertible notes with a face
value of $1,000 to one holder, issued as part consideration
to acquire the Strategic Portfolio investments in 2021. Each
note is convertible into fully paid ordinary shares of the
parent of the Group.
Total notes on issue at balance date are 60,222,763 shares
(2022: 68,222,761 shares). During the period 11,994 notes
were converted to 7,999,998 ordinary shares (2022: nil).
The notes are converted at the option of the holder at any
time and at the option of the issuer after two years (subject
to maximum ownership limits). The notes are required to be
converted on their 10 year maturity date. To the extent
regulatory requirements prohibit conversion into Navigator
Global Investment securities by maturity date, alternative
options are available to both parties to allow conversion. In
the remote instance this cannot occur by maturity date a
provision is available for unconverted notes to be
redeemed for cash at the prevailing share price. The
convertible notes are considered a compound instrument
with the presentation of the equity portion included in Note
20.
The convertible notes are non-interest bearing and entitled
to participate in discretionary dividends declared by the
Company. No voting rights are associated with the
convertible notes.
The Group presents assets and liabilities in the statement
of financial position based on current/non-current
classification. A liability is current when it is:
It is expected to be settled in the normal operating
cycle
There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period
It is held primarily for the purpose of trading, or
It is due to be settled within twelve months after
the reporting period.
The Group classifies all other liabilities as non-current.
Deferred consideration
Consideration payable associated with business
combinations and investment acquisitions that are not
contingent upon future events is considered deferred
consideration. This financial liability is recorded at fair value
at acquisition date based on discounted cash flows.
Interest accretion is recognised as a finance expense.
Both Marble Capital and Invictus Capital acquisitions,
included contractual terms to defer a portion of
consideration for up to two years. Both parties can call on
some amounts ahead of scheduled anniversary payment
dates subject to certain conditions outside of the Group’s
control. Consequently, a significant portion of this deferred
consideration is considered a current liability. Note 9
includes further details on deferred consideration for these
acquisitions and Note 21 outlines a contractual maturity
profile.
Page 75
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
18. Other financial liabilities (continued)
Borrowings
On 30 June 2022 the Group entered into a new credit
agreement with its current lender, BMO Harris Bank N.A.
(‘BMO’), for a new senior, secured credit facility in the
aggregate principal amount of an immediate $50 million of
capacity. This line of credit was increased to $70 million in
December 2022, with the funding sourced from an
additional lender, Byline Bank, administered by BMO. The
facility matures on 30 June 2025 and is secured by a
charge over certain Group assets.
The increased borrowing capacity provides the Group with
flexible financing to maximise shareholder returns and to
fund deferred consideration related to Marble Capital &
Invictus Capital transactions (refer Note 9). At balance
date, the Group has undrawn funds of $60 million (2022:
$50 million).
The applicable interest rate is benchmarked to the secured
overnight financing rate (“SOFR”) administered by the
Federal Reserve Bank of New York and adjusted for an
applicable term and margin rate. Accrued interest is
included in other payables on the balance sheet.
a) Redemption payment liability
Borrowings are subject to the following financial covenants
tested quarterly:
Debt to Adjusted EBITDA ratios;
Fixed Charge Cover Ratio (first tested in June
2023);
Minimum Group AUM levels; and
Minimum Group investment in Lighthouse Funds.
Breaches in meeting the financial covenants would permit
the lender to immediate call for amounts drawn and/or
restrict further drawdowns. There have been no breaches
of financial covenants in the current period.
Borrowings are initially measured at fair value net of
directly attributable transaction costs. Following initial
recognition borrowings are subsequently measured at
amortised cost using the effective interest rate method.
Gains and losses are recognised in profit and loss when
the liabilities are derecognised as well as through the
effective interest amortisation process.
Opening fair value / as at acquisition date
128,373
Unrealised fair value changes recognised in profit and loss
31,634
Closing fair value
160,007
79,717
48,656
128,373
Consolidated USD’000
2023
2022
The fair value at balance date estimates future cash flows
based on earnings of the portfolio investments that align
with estimates utilised to determine the fair value of the
corresponding fair value investment assets. Amounts are
discounted by 7.9% (2022: 11.6%) to present value,
comprising of the cost of debt plus a risk premium to reflect
variability in earnings.
As the redemption payment is considered contingent
consideration, fair value movements are recorded through
profit and loss and discounted to determine its present
value.
The Group has a written put arrangement over the non-
controlling interest in acquired partnerships; NGI Strategic
Holdings (A) Limited Partnership and NGI Strategic
Holdings (B) Limited Partnership. The deferred
consideration payable represents the fair value of non-
controlling interest held by the vendor which the Group has
an obligation to acquire in FY2026. Once this redemption
payment is made, the two acquired partnerships will be
wholly owned entities of the Group.
The fair value of estimated consideration is calculated over
two discrete measurement periods; Calendar year 2021-
2023 and calendar years 2024-2025, and payable in
financial year ending 2026. The amount is determined as
the average relevant gross earnings of the six portfolio
investments (ownership adjusted) over a minimum
distribution threshold with the average relevant gross
earnings multiplied by 2.25x up to a maximum
undiscounted amount of $200 million.
Page 76
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Capital and risk
This section provides information on how Navigator Global Investments Limited manages its capital and financial risk entailing
disclosures explaining the Group’s:
capital management, including structure, policies, and related accounts balances; and
exposure to financial risks, including market risks, credit risk, liquidity risk, and the risk arising from financial
instruments.
Where an accounting policy or key estimate is specific to a single note, the policy or estimate is described in the note to
which it relates.
Line of Credit
During the current period the line of credit with BMO Harris
Bank N.A. (‘BMO’), increased to $70 million in December
2022, from $50 million at 30 June 2022. The funding was
sourced from an additional lender, Byline Bank with the
facility administered by BMO. The facility matures on 30
June 2025 and is secured by a charge over certain Group
assets.
The increased borrowing capacity provides the Group with
flexible financing to maximise shareholder returns and to
fund deferred consideration related to the Marble Capital &
Invictus Capital transactions. As at balance date the Group
has undrawn funds of $60 million (2022: $50 million).
19. Capital management
Capital management of the Group focuses on aiming to
ensure:
that the Group continues as a going concern;
there is sufficient cash flow to meet operating
requirements;
that it meets financial covenants attached to the
interest-bearing borrowings;
flexibility is maintained for future business
expansion; and
that the payment of dividends is supported in
accordance with the Group’s dividend policy.
The Company’s capital comprises ordinary shares and
convertible notes on issue.
Regulatory Capital Requirements
The following capital requirements were complied with
throughout the year:
LHP Ireland Fund Management Limited, a wholly
owned subsidiary, is required by Central Bank of
Ireland to maintain a prescribed capital amount,
determined as:
- a base requirement of 125 thousand Euros
- plus .02% of excess over 250 million Euros
in assets under management,
- plus an additional .01% of the assets under
management for potential liability risk.
LH NR UK (Management) LLP, a wholly owned
partnership is required by Financial Conduct
Authority to have capital requirements in four
forms:
- Permanent minimum capital requirement;
- Fixed overhead requirement of 25% of fixed
overheads;
- Own funds in excess of own funds threshold
requirement; and
- Risk responsive computation for potential
liability risk.
NR Capital Management (HK) Limited, a wholly
owned entity is required by the Securities and
Futures Commission to maintain a fixed liquid
capital balance based on the type of license held.
Page 77
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
20. Capital & Reserves
a) Share capital
Ordinary shares
Opening balance 1 July
Note
Shares ‘000
US$’000
2023
2022
2023
2022
235,692
202,672
356,186
320,146
Issued 13 April 2022 through an institutional placement
Issued 18 May 2022 through a share purchase plan
Less: Transaction costs arising on share issue
-
-
-
Issued upon conversion of notes
(b)
8,000
30,400
2,620
-
-
35,024
2,728
-
-
(15)
(1,712)
11,994
-
Total share capital at 30 June
243,692
235,692
368,165
356,186
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and
share options are recognised as a deduction from equity,
net of any tax effects.
The Company does not have authorised capital or par
value in respect of issued shares. All ordinary shares rank
equally with regard to the Company’s residual assets.
Ordinary shares have the right to receive dividends as
declared and are entitled to one vote per share at general
meetings of the Company.
b) Non-share capital
Non-share capital of $87.8 million (2022: $99.8 million)
represents the equity component of 90,289 (2022: 102,283)
convertible notes issued as part consideration for a business
combination in 2021. During the period 11,994 notes were
converted to 7,999,998 ordinary shares.
As these notes are a compound instrument, the liability
component is included in Other financial liabilities at Note 18.
c) Parent entity reserve
The parent entity profits reserve comprises the balance of
accumulated profit for the Company not yet distributed as
dividends and available as dividends in future years.
d) Translation reserve
The translation reserve records foreign currency
differences arising from the translation of operations which
have a functional currency that is different to the Group’s
presentation currency. In particular the foreign operations
of Longreach that has a functional and reporting currency
of AUD.
Page 78
In the 2022 financial year, the Group successfully raised
equity from the following activities:
Fully underwritten Institutional Placement
representing approximately 15% of pre-existing
capital. Shares successfully placed were issued at a
fixed price of A$1.55/share.
Share Purchase Plan following the completion of the
Placement to eligible retail shareholders in Australia
and New Zealand. Shares successfully placed were
issued at A$1.48/share being the lower of placement
price and a 2% discount to the 5-day VWAP up to
closing date.
e) Fair value reserve
The fair value reserve comprises the movement in fair
value of financial assets through other comprehensive
income above or below their original purchase value, net of
tax. Cumulative fair value adjustments are transferred to
retained earnings upon derecognition which for the current
period was $0.9 million (2022: $nil).
f) Share based payment reserve
In the current period the Group provided benefits to its
employees in the form of share-based payment
transactions, whereby employees render services in
exchange for shares or rights over shares (‘equity settled
transactions’).
The share-based payments reserve is used to recognise:
the grant date fair value of options and
performance rights issued to employees but not
exercised;
the grant date fair value of shares issued to
employees; and
the grant date fair value of deferred shares
granted to employees but not yet vested.
All share based payment instruments are unvested as at
balance date. Refer to Note 3 for further details on share
based payment expenses for the period.
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
21. Financial risk management
Classes of financial instruments
The Group held the following non-derivative financial assets and liabilities:
Classification
Description
Assets
Financial assets at
amortised cost
Financial assets at fair
value through profit
and loss (FVTPL)
The carrying amount of these assets is a reasonable approximation of fair value
Cash
Trade and other receivables
Contingent consideration asset
Non-controlling investments in unquoted securities of Group managed entities
Non-controlling investments in unquoted securities of externally managed entities include the
Strategic Portfolio of investments. Fair value movements in these assets through profit and
loss reasonably align with the corresponding movements in financial liability (see below).
The Group does not have significant influence over any of the entities associated with these
investments.
Financial assets at fair
value through other
comprehensive income
(FVOCI)
Non-controlling equity holdings in US based entities over which the Group does not have
significant influence. These investments include the Marble Capital & Invictus Capital
investments.
Fair value movements in these assets are recognised through a reserve within other
comprehensive income.
Liabilities
Financial liabilities at
amortised cost
The carrying amount of these assets is a reasonable approximation of fair value
Trade and other payables
Convertible note liability
Deferred consideration
Lease liabilities
Financial liability at fair
value through profit
and loss (FVTPL)
Redemption payment liability which represents the obligation to acquire the remaining
partnership interests in NGI Strategic Holdings (A) LP and NGI Strategic Holdings (B) LP.
These partnerships hold the interest in the Strategic Portfolio investments.
Fair value movements including the unwinding of discounts are recognised through profit and loss
within Finance Costs.
Derecognition of financial instruments
Offset of financial instruments
The Group derecognises a financial asset when the
contractual rights to the cash flows from the asset expire,
or it transfers the rights to receive the contractual cash
flows on the financial asset in a transaction in which
control, or substantially all the risks and rewards of
ownership are transferred. The Group derecognises a
financial liability when its obligations under the liability is
discharged or cancelled or expire.
Financial assets and liabilities are offset and the net
amount reported in the statement of financial position if
there is a currently enforceable legal right to offset and
there is an intention to either to settle on a net basis or to
realise the asset and settle the liability simultaneously.
Note
5
10
10
11
11
11
16
14
18
18
18
Page 79
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
21. Financial risk management (continued)
Fair value of financial instruments
Fair value hierarchy
The Group classifies fair value measurements using a fair value hierarchy that reflects the subjectivity of the inputs used in
making the measurements. The different levels of fair value hierarchy are:
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 3: inputs for the asset or liability that are not based on observable market data.
Fair value measurements
The following table shows the fair values of financial assets and liabilities and their levels in the fair value hierarchy.
Consolidated USD’000
Note
Level 1
Level 2
Level 3
Total
Financial assets at fair value through other comprehensive income
Investments in unquoted securities of externally managed
entities
Financial assets at fair value through profit and loss
Contingent consideration asset
Investment in unquoted securities of externally managed
entities
Investments in unquoted securities of Group managed entities
Financial liabilities
Redemption payment liability
11
10
11
11
18
Financial assets at fair value through other comprehensive income
Investments in unquoted securities of externally managed
entities
Financial assets at fair value through profit and loss
Contingent consideration asset
Investment in unquoted securities of externally managed
entities
Investments in unquoted securities of Group managed entities
Financial liabilities
Redemption payment liability
11
10
11
11
18
2022
-
-
-
84,471
84,471
1,000
1,000
289,246
289,246
13,229
-
13,229
-
128,373
128,373
2023
-
-
-
159,000
159,000
2,620
2,620
323,132
323,132
13,786
-
13,786
-
160,007
160,007
-
-
-
-
-
-
-
-
-
-
There were no transfers between levels during the financial years ended 30 June 2023 or 30 June 2022.
Page 80
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
21. Financial risk management (continued)
Valuation techniques used to derive level 2
and level 3 fair values
The fair value of financial instruments that are not in an
active market are determined using valuation techniques.
These valuation techniques maximise the use of
observable market data where available, and if so, the
instrument is included in level 2. If one or more of the
significant inputs is not based on observable market data,
the instrument is included in level 3, as is the case for
unlisted equity securities. Specific valuation techniques are
outlined below in addition to those detailed in Note 18(a).
Share in unquoted securities of Group managed
entities
The Group holds investments in Group managed entities,
each with an external administrator who is responsible for
determining the fair value of the underlying investments.
This used to calculate the net asset value per share at
which any investor in the entity can redeem their
investment holding (‘the exit price’). This exit price is used
to fair value of these investments at each balance date. All
significant inputs required to fair value the investments are
observable (level 2) and changes in fair value for these
investments are recorded in profit and loss.
Contingent consideration asset
A contingent consideration asset is recognised in ‘Other
assets’ on the balance sheet relating to an investment in
associate. The assets value is based on an expectation of
whether the associate entity will meet EBITDA targets by a
specified timeframe. If targets are not reached the Group’s
shareholding increases for nil additional consideration.
Company earnings are unobservable inputs and
considered level 3.
Movement in Level 3 financial instruments
Opening balance 1 July 2021
Acquisitions
Increase/(Decrease) in fair value
Closing balance 30 June 2022
Note
9(a)-(b)
Acquisitions
9
Increase/(Decrease) in fair value
Closing balance 30 June 2023
Refer to Note 18(a) for movement in Level 3 financial liability.
Page 81
Unquoted securities of externally managed entities
Equity holdings in other externally managed entities are
unquoted and are considered level 3 as the inputs to the
fair value are not based on observable market prices.
Alternative asset managers
A portfolio of investments in alternative asset managers,
each operating within their own niche market. The Group
engaged external, independent and qualified valuers
specialising in unquoted securities to determine the fair
value of the Group’s investment in each alternative asset
manager.
A combination of market and income approaches were
utilised by the external valuer based on forecasted
cashflows prepared by management. This approach differs
from the prior period where only an Income approach was
applied through inhouse valuations. The utilisation of
external valuers evolved the process into a more robust
and balanced approach. Certain assumptions on model
inputs including growth rates on net fee related earnings,
performance fee income and carried interest are made.
The probabilities of various estimates within the range can
be reasonably assessed and are used in management’s
estimate of fair value.
Other externally managed entities:
The Group has small investments in an operator of an
online marketplace for alternative investments & a boutique
asset manager. Continued uncertainty as to the on-going
viability of these investments, carrying value continues to
be $nil. The Group’s small ownership in a text analytic
platform provider was extinguished during the period.
Consolidated USD’000
Contingent
consideration
asset
Investments in
unquoted securities
Through
profit and loss
Through
profit and loss
Through other
comprehensive
income
Total
-
200
800
1,000
-
1,620
2,620
238,068
-
238,068
-
84,471
84,471
51,178
289,246
-
33,886
323,132
-
51,178
84,471
373,717
93,294
(18,765)
93,294
15,121
159,000
482,132
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
21. Financial risk management (continued)
Significant unobservable inputs to valuation:
The significant unobservable inputs used in the fair valuation measurements categorised within level 3 of the fair value
hierarchy, together with a quantitative sensitivity analysis are shown below:
USD’000
Fair value at
30
30
June
June
2022
2023
482,132
373,717
Description
Valuation
technique
Alternative asset
managers
Investments in
unlisted equity
securities in
externally
managed entities
Income &
Market
approach
Unobservable inputs
Sensitivity of the input to fair value
Expected earnings through the
measurement period
A 1% change in revenue growth
increases/decreases earnings results in a
$13.8m increase / $13.2m decrease (2022: 1%
change, $25.1m increase/$23.6m decrease)
WACC applied to net fee
related earnings ranged from
13 – 22.5% (June 2022: 16.9 –
19.5%1)
A 0.5% increase/decrease in the WACC would
decrease value $3.9m / $4.1m increase value
(2022: 0.5% change, $8.5m decrease / $9.4m
increase)
Discount rate ranged from 27 –
41% (2022: of 32.4%1) applied
to performance fee & carried
interest earnings, a higher
degree of variability in earnings
Transaction prices associated
with actual market transactions
for similar investments ranged
from 6.5x – 12x (2022: n/a)
A 0.5% increase/decrease in the discount rate
would result in a
$2.4m decrease in value / $2.5m increase in
value (2022: 0.5% change, $2.3m decrease/
$2.4m increase)
A 0.5x increase/decrease in market multiples
would result in a $9.6m increase/decrease in
value (2022: n/a)
Other
Investments in
unlisted equity
securities in
externally
managed entities
Redemption
payment liability
recorded at fair
value
Market
approach
-
-
A share price from a historical
capital raise was utilised as an
indicative fair value price for
equity held.
Any increase in the price per share would
result in an increase in the fair value from nil.
DCF
(160,007)
(128,373)
Expected earnings through the
measurement period.
A discount rate of 7.9% (2022:
11.6%) was applied a
meaningful decrease due to the
impact of the payment being
capped at $200 million.
A 1% increase/decrease in the growth rate
would not result in a change as the $200m cap
remains projected (2022: 1% change, $0.1m
increase / $3.0m decrease)
A 0.5% increase/decrease in the discount rate
would result in a $2.2m decrease / $2.3m
increase in value (2022: 0.5% change, $2.4m
decrease/ increase)
Contingent
consideration
asset
Market
approach
2,620
1,000
A share price from a recent
capital raise was utilised as an
indicative fair value for potential
increment in equity held.
A 10% increase/decrease in the price per
share would result in a $0.3m increase/ $0.3m
decrease (2022: 10% change, $0.1m
increase/decrease)
A probability scenario is applied
based on expected
achievement of earnings target
by a specific timeframe. Current
period expectation is 100%
(2022: 50%)
A 10% decrease in the probability factor would
result in a $0.3m decrease in value (2022: 10%
change, $0.2m) increase/decrease)
Grossed up for the impact of minority asset liquidity discount previously for comparison purposes. Previously this discount directly applied to
1
cash flows.
Page 82
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
21. Financial risk management (continued)
Risk Management
Price risk
The Group is exposed to price risk in relation to the value
of its investments, and indirectly through the impacts on
management and performance fees earned from the
fluctuations in the value of the AUM in the investment
products it manages due to market price movements.
Management fees
The Group earns management fees as a percentage of the
assets it manages on behalf of its funds and clients.
Management fees will be impacted by changes in the value
of these assets from movements in the individual prices of
the underlying securities held as well as the fluctuations in
exchange rates for assets which are not denominated in
USD. The following table summarises the sensitivity of
management fees to a change in AUM due to movements
in market prices:
Consolidated US$’000
2023
2022
Profit and loss (decrease) /
increase
Fair value + 5%, net of tax
2,967
2,756
Fair value - 5%, net of tax
(2,967)
(2,756)
The impact of any change to management fees due to
changes in AUM from inflows and outflows of assets by
clients due to changes in market prices has not been
estimated.
Performance fees
The Group earns performance fees from some of its funds
and clients. The Group’s entitlement to performance fees
varies between the relevant funds and clients, and
generally is dependent on the relevant fund or client
portfolio outperforming a high watermark and in some
cases a benchmark hurdle over a performance period.
Given the nature of performance fees, the Group is subject
to the risk that in any given financial year it may earn no
performance fees.
The Group has direct and indirect exposure to credit risk,
liquidity risk and market risk (including currency risk,
interest rate risk and equity price risk) arising from its
activities.
These risks can impact the Group’s net profit and total
equity value through:
fluctuations in the value of the Group’s investments
and other financial assets and liabilities;
the effect of market risks on the Group’s Assets Under
Management (AUM), which can impact management
and performance fees; and
the amount of interest earned on the Group’s cash
balances and paid on debt drawn.
Market risk
Market risk is the risk that changes in market prices, such
as interest rates, foreign exchange rates and equity prices
will affect the Group’s income or the value of its holdings of
financial instruments.
Interest rate risk
Previously, the Group’s exposure to interest rate risk
related to cash and term deposits which mature in less than
90 days. However having drawn on the line of credit facility
during the period the exposure to interest rate risk has
heightened.
Consolidated US$’000
2023
2022
Profit and loss (decrease) /
increase
Interest rate + 1%, net of tax
Interest rate - 1%, net of tax
88
(88)
-
-
A change in interest rates at reporting date would have
impacted the carrying value of the Group’s variable rate
deposits, and would therefore not have impacted the
Group’s equity or profit and loss.
The redemption payment liability is also exposed to interest
rate risk in the form of the cost of debt included within the
discount rate. Refer to sensitivities for level 3 unobservable
inputs performed above for impact on the Group’s profit
and loss.
Page 83
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
21. Financial risk management (continued)
Price risk (continued)
Investments
The Group’s investments comprise of:
Unquoted securities of US based companies externally
managed which have been designated as either fair
value through other comprehensive income or through
profit and loss. Refer above for level 3 significant
unobservable inputs into fair values and sensitivities
for each.
Unquoted securities of investment funds managed by
the Group. Fair value movements for these level 2
investments are recorded through profit and loss. The
following table summarises the sensitivity of the fair
value (after tax) of these assets to movements in
market prices:
Financial assets at fair value
through profit and loss Level
2 investments
Profit and loss (decrease) /
increase
Fair value + 5%, net of tax
Fair value - 5%, net of tax
Consolidated US$’000
2023
2022
534
(534)
496
(496)
Page 84
Currency risk
The Group is exposed to currency risk on revenue,
distribution income, expenses, receivables, and payables
that are denominated in a currency other than the
respective functional currencies of the Group entities.
In addition, currency risk on the investment held in an
Australian joint venture and the share of profits recognised.
The following significant exchange rates applied during the
year:
AUD/USD: Average rate
AUD/USD: 30 June spot rate
GBP/USD: Average rate
GBP/USD: 30 June spot rate
EUR/USD: Average rate
EUR/USD: 30 June spot rate
HKD/USD: Average rate
HKD/USD: 30 June spot rate
2023
2022
0.6735
0.6630
1.2047
1.2714
1.0476
1.0891
0.1276
0.1276
0.7259
0.6889
1.3314
1.2132
1.1280
1.0447
-
-
At reporting date, the Group’s direct exposure to currency
risk relates to:
Transactions associated with Navigator Global
Investments Limited (the parent entity of the Australian
listed group). This entity retains a number of working
capital balances denominated in AUD including cash,
receivables, trade and other payables and employee
benefits which are translated to the Group’s functional
currency of USD.
Translation of an AUD denominated investment
associated with the joint venture interests acquired
during the period. The Group’s carrying value is
translated at period end with changes reflected in the
foreign currency translation reserve.
AUD, GBP & HKD denominated balances recognised
by the Lighthouse Group which has a functional
currency of USD. These balances comprise of trade
receivables due from a third party for management and
performance fees on funds for which Lighthouse
performs investment services.
EURO distributions are received from a French
investment and is translated to the Group’s functional
currency of USD as soon as practically possible to
minimise currency fluctuations. As the investment held
is a non-monetary asset, sensitivity on the currency
impact on recorded fair values is not required.
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
21. Financial risk management (continued)
Currency risk (continued)
Trade and other receivables
The following table summarises the sensitivity of these
balances held at reporting date to movement in these
currencies against the USD, with all other variables held
constant
AUD/USD: appreciation of
10%, net of tax
AUD/USD: depreciation of
10%, net of tax
GBP/USD: appreciation of
10%, net of tax
GBP/USD: depreciation of
10%, net of tax
EURO/USD appreciation of
10%, net of tax
EURO/USD depreciation of
10%, net of tax
HKD/USD appreciation of
10%, net of tax
HKD/USD depreciation of
10%, net of tax
Consolidated US$’000
2023
2022
450
2,008
(450)
(2,008)
440
221
(440)
(221)
3
(3)
14
(14)
377
(377)
-
-
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from
the Group’s cash deposits and receivables. The carrying
amount of these financial assets represents the Group’s
maximum credit risk exposure.
Cash and lease guarantee deposits
Cash and lease guarantee deposits held in Australia are
held with bank counterparties which are rated A-1+
(Standard & Poor’s).
Cash and lease guarantee deposits held in the United
States are held in deposit accounts which are rated
between A+ and A / A-1 (Standard & Poor’s).
At reporting date, 60% of the Group’s trade and other
receivables excluding contingent assets, related to
amounts receivable from products managed by the Group
(2022: 69%).
As at reporting date, the Group did not have any
receivables which were past due. Due to the short-term
nature of the Group’s trade receivables, the fact that the
majority relate to Group managed products, and the
historically low default rates, the application of the expected
credit loss model has not resulted in the recording of a
material credit allowance as at 30 June 2023 or 30 June
2022. In determining this credit allowance, the Group has
considered forward looking factors specific to the
receivables and the economic environment.
Liquidity risk
Liquidity risk is the risk that the Group will encounter
difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or
another financial asset. The Group’s approach to managing
liquidity is to ensure, as far as possible, that it has sufficient
resources available to meet its liabilities when due, under
both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s
reputation.
The Group maintains 12 month rolling forecasts and 5 year
cash projections, which assist it in monitoring cash flow
requirements. The Group ensures that it has sufficient cash
on demand to meet operational requirements in the short
term and has appropriate strategies in place to satisfy long
term obligations.
The Group also has access to a Line of Credit of $70
million which has increased by $20 million since the prior
period with funding sourced from an additional lender,
Byline Bank, administered by BMO. As at 30 June 2023,
the Group has $60 million of this line of credit available.
The liquidity approach adopted by the Group excludes the
potential impact of extreme circumstances which cannot be
predicted.
Page 85
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
21. Financial risk management (continued)
Liquidity risk (continued)
The following are the contractual maturities of non-derivative financial liabilities as at balance date:
Note
Carrying
value
Cont-
ractual
cash
flows
Consolidated US$’000
6 months
or less
6-12
months
1-2 years 2-5 years
16
16
18
18
45,865
(45,865)
(45,865)
50
(50)
1,600
(2,143)
-
-
-
-
-
-
(50)
-
54,743
(55,250)
(41,438)
(6,906)
(6,906)
-
-
-
-
18(a)
128,373
(199,830)
-
-
-
(199,830)
More
than 5
years
-
-
(2,143)
-
-
230,631
(303,138)
(87,303)
(6,906)
(6,956)
(199,830)
(2,143)
16
18
18
18
40,627
(40,627)
(40,627)
1,655
(2,143)
-
-
-
97,938
(103,594)
(96,688)
(6,906)
9,581
(10,000)
18(a)
160,007
(200,000)
-
-
-
-
-
-
-
(10,000)
-
-
-
-
-
(200,000)
-
(2,143)
-
-
30 June 2022
Trade and other payables –
current
Trade and other payables –
non-current
Convertible note
Deferred consideration
Redemption payment
liability
30 June 2023
Trade and other payables –
current
Convertible note
Deferred consideration
Borrowings
Redemption payment
liability
309,808
(356,364)
(137,315)
(6,906)
(10,000)
(200,000)
(2,143)
Refer to Note 14 for contractual maturities of the Group’s
lease liabilities.
Subsequent event impacts on liquidity
The above maturity analysis is based on contractual terms,
as classified in the balance sheet of the Group. Deferred
consideration relating to Marble Capital and Invictus Capital
acquisitions are not variable in nature however the majority
can be called upon by sellers. Subject to certain conditions
which are outside the control of the Group, sellers may
make capital calls ahead of defined anniversary dates
resulting in amounts included in the 6 months or less
maturity category.
The Group anticipates settlement of the $200 million
redemption payment will be accelerated to H1 of FY2024
having entered into definitive documentation for a
transaction with holders of the Class II units as announced
on 1 August 2023.
The transaction which is subject to shareholder & other
regulatory approvals (as further outlined in the Subsequent
events Note 27), will be funded by a combination of equity
through the issue of shares and convertible notes and
remaining paid by cash to a maximum of $40 million. As a
result, the contractual obligation will be reduced to nil with a
potential increase to borrowings of up to $40 million by next
reporting date.
Page 86
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Group structure
This section outlines how the Navigator Global Investments Limited’s group structure affects the financial position and
performance of the Group as a whole including disclosures on the Group’s composition and key parent entity disclosures.
Where an accounting policy or key estimate is specific to a single note, the policy or estimate is described in the note to which it
relates.
22. Group entities
The consolidated financial statements of the Group include the following entities:
Name
HFA Lighthouse Holdings Corp
HFA Lighthouse Corp
LHP Investments, LLC
Lighthouse Investment Partners, LLC
Lighthouse Partners UK, LLC
North Rock Capital Management LLC
NR Technology Group, LLC
NGI Strategic Holdings I, Inc
NGI Strategic Holdings II, Inc
Mission Crest Capital Management, LLC
Pier61 Partners, LLC
Luminae Partners, LLC
NGI Strategic Australia Pty Ltd
NGI Strategic Holdings Ltd
NGI Strategic Holdings (A) LP
NGI Strategic Holdings (B) LP
Lighthouse Partners Limited (HK)
LHP Ireland Fund Management Limited
North Rock Capital Management (UK) LLP1
LH NR UK Limited
NR Capital Management (HK) Limited
Lighthouse Partners (DIFC) Limited
1 Formerly LH NR UK (Management) LLP
Basis of consolidation
The consolidated financial statements are those of the
Group, comprising Navigator Global Investments Limited
and all entities that Navigator Global Investments Limited
controlled during the period and at reporting date.
Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement in the
investee and has the power to affect those returns through
its power over the investee.
Page 87
Country of
incorporation
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
Australia
Cayman Islands
Cayman Islands
Cayman Islands
Hong Kong
Ireland
United Kingdom
United Kingdom
Hong Kong
UAE
% Equity interest
2023
2022
100
100
100
100
100
100
100
100
100
100
100
100
100
100
71
56
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
71
56
100
100
100
100
-
-
Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary. The assets, liabilities,
income and expenses of a subsidiary are included in the
consolidated financial statements from the date the Group
gains control, until the date the Group ceases to control the
subsidiary.
All intra-group assets and liabilities, equity, income,
expenses and cash flows relating to transactions between
members of the Group are eliminated in full on
consolidation.
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
23. Parent entity disclosures
As at, and throughout the financial year ended 30 June 2023, the parent company of the Group was Navigator Global
Investments Limited.
Company US$’000
2023
2022
30,127
29,802
4,890
419,497
(1,045)
(2,871)
416,626
368,165
87,824
(99,342)
51,021
4,309
4,649
40,698
40,262
21,439
397,365
(575)
(2,363)
395,002
356,186
99,818
(99,342)
29,897
4,635
3,808
416,626
395,002
Result of the parent entity
Profit for the year
Total comprehensive income for the year
Financial position of the parent at year end
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Total equity of the parent comprising of
Share capital
Non-share capital
Accumulated losses
Parent entity profits reserve
Translation reserve
Share based payments reserve
Total equity
Page 88
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Other disclosures
This section includes information that must be disclosed to comply with the Accounting Standards, the Corporations Act 2001 or
the Corporations Regulations but the Directors do not consider to be significant in understanding the financial performance and
position of the Group.
24. Related parties
Key management personnel remuneration
The key management personnel remuneration included in ‘employee expense’ (see Note 3(a)) is as follows:
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payment transactions
Consolidated US$
2023
2022
5,502,810
6,877
123,175
564,880
5,498,342
10,422
106,253
48,088
Total compensation paid to key management personnel
6,197,742
5,663,105
Detailed remuneration disclosures are provided in the remuneration report on pages 23 to 37.
Transactions with key management
personnel
Apart from the details disclosed in this note, no director has
entered into a material contract with the Group since the
end of the previous financial year and there were no
material contracts involving directors’ interests existing at
year-end.
A donation of $100,000 was made to Oxbridge Academy, a
director related entity of the CEO, Sean McGould. There
were no other transactions with key management
personnel during the year.
Other related party transactions
Revenue from group managed products
During the financial year Group entities recognised
management fees, performance fees and fund
reimbursement revenue received or receivable of
$169,411,131 (2022: $116,877,834) from investment
products for which group entities act as general partner,
investment manager or managed account service provider.
Amounts receivable from these products at 30 June 2023
were $10,882,406 (2022: $8,785,812).
Investment in products
As at 30 June 2023, Group entities hold $13,786,151 of
investments in products for which they act as investment
manager or managed account service provider (2022:
$13,228,740). Refer Note 11 for additional detail.
During the financial year, the Group recognised
distributions from its investments in these products of $nil
(2022: nil).
For the years ended 30 June 2023 and 30 June 2022, the
Group has not recorded a credit allowance relating to
amounts owed by related parties. Additional information
regarding the Group’s assessment of credit risk in relation
to related party receivables and investments is disclosed in
Note 21.
Other
There have been no guarantees provided or received for
any related party receivables.
Page 89
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
25. Auditors Remuneration
Consolidated US$
2023
2022
Fees to Ernst & Young
EY (Australia):
Audit and review of financial reports for the Group and controlled entities
Other non-audit services (advisory)
Overseas member firms of EY (Australia):
Audit and review of financial reports for the Group and controlled entities
Total fees to Ernst & Young
Audit fees to other audit firms
Other audit firms (Australia):
Other non-audit services (taxation)
Other non-audit services (advisory)
Total fees to other audit firms (Australia)
Overseas member firms of other auditors:
Audit and review of financial reports for controlled entities
Other non-audit services (taxation)
Other non-audit services (advisory)
Total fees to overseas member firms of other auditors
Total fees to other audit firms
320,126
-
340,713
660,839
38,204
24,918
63,122
14,254
854,989
104,480
973,723
1,036,845
400,756
38,214
233,870
672,840
76,344
10,450
86,794
35,891
333,166
466,208
835,265
922,059
Total auditor’s remuneration
1,697,684
1,594,899
Page 90
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
26. Commitments & contingencies
27. Subsequent events
Commitments
Events occurring after reporting period
At 30 June 2023 the Group had commitments of $309
thousand (2022: $592 thousand) relating to the completion
of lease fit outs for a new leased premises.
Investment fund related obligations
The Company’s subsidiary Lighthouse Investment
Partners, LLC acts as the Investment Manager for certain
private investment funds under Delaware Law, Cayman
Islands Law, Irish Law and Illinois law. Due to its role as
Investment Manager the subsidiary may be subject to
contingent liabilities as a result of its obligations to the
funds. The directors of Lighthouse Investment Partners,
LLC consider that all obligations have been met to 30 June
2023.
Guarantees
The Group provides a guarantee to one of the externally
managed entities for its share in a banking facility. In the
event of default this guarantee may be called upon which
would be incurred jointly with other investors. During the
period, the facility has been drawn in full and the guarantee
provided totals $3.3 million (2022: $nil).
On 1 August 2023, the Group entered into definitive
documentation for a transaction with certain affiliates of GP
Strategic Capital (formerly known as Dyal Capital)(“GP
Strategic Affiliates”), a platform of Blue Owl (NYSE: OWL)
regarding the accelerated acquisition of incremental profit
distributions and settlement of the 2026 redemption liability
for total consideration of $200 million.
This will result in:
a) Cancellation of the scheduled redemption payment in
CY26 (currently recorded as a non-current liability at
present value on the Group’s balance sheet (Note
18(a))) to acquire GP Strategic Capital Affiliates’ share
of profit distributions from the NGI Strategic Portfolio;
and
b) Acquire GP Strategic Capital Affiliates’ share of profit
distributions from the NGI Strategic Portfolio with effect
from 1 July 2023. This will entitle the Group to 100% of
distributions received from the portfolio with no
corresponding payable to non-controlling interest such
as that in current trade and other payables.
Consideration will be funded by a combination of an
entitlement offer to all Navigator shareholders and
convertible note holders, a placement of Navigator shares
to GP Strategic Capital Affiliates, with remaining
consideration paid by cash or debt to a maximum of $40
million.
The transaction which is subject to shareholder & other
regulatory approvals, will be structured so that GP Strategic
Capital Affiliates’ relevant interest in Navigator’s ordinary
shares will not exceed 46.5% as convertible notes will be
issued to GP Strategic Affiliates to give the effect to the
economic terms of the Entitlement Offer or Placement (as
applicable).
Assuming the transaction settles in December 2023, the
expected impact on the profit and loss will be an expense
of $34.7 million excluding transaction costs. This reflects a
fair value adjustment to bring the redemption payment
liability its gross value of $200 million.
There has not arisen in the interval between the end of the
reporting period and the date of signing this report, any
item, transaction or event of a material nature, likely to
affect significantly the operations of the Group, the results
of those operations, or the state of affairs of the Group, in
future financial years.
Page 91
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
Basis of preparation
This section sets out the basis upon which the Group’s financial statements are prepared as a whole including information on
new accounting standards, amendments and interpretations, and whether they are effective for the current or later years. How
these changes are expected to impact the financial position and performance of the Group are outlined where relevant.
28. Corporate information
30. Basis of measurement
The financial report of Navigator Global Investments
Limited (the ‘Company’) for the year ended 30 June 2023
was approved by the board of directors on the 24th day of
August 2023.
The consolidated financial statements have been prepared
on a going concern basis. The consolidated financial
statements have been prepared on a historical cost basis
except for the following items:
The consolidated financial statements of the Company as
at and for the year ended 30 June 2023 comprise the
Company and its subsidiaries (the ‘Group’). Entities within
the consolidated group are outlined in Note 22.
The Company is a for profit company limited by shares
incorporated in Australia and is listed on the Australian
Securities Exchange. The registered office of the Company
is Level 21, 10 Eagle Street, Brisbane QLD 4000.
29. Statement of compliance
The consolidated financial statements are general purpose
financial statements prepared in accordance with the
requirements of the Corporations Act 2001, Australian
Accounting Standards (AASB) and other authoritative
pronouncements of the Australian Accounting Standards
Board. The consolidated financial statements also comply
with the International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board.
During the period, disclosures reflect changes to the
comparative period to conform to the current period’s
presentation. Details of the Group’s accounting policies,
including changes during the year, are included in Note 32
as well as within the individual notes to the financial
statements.
Items
Financial assets at fair value
through profit and loss & other
comprehensive income
Measurement
basis
Note
disclosure
Fair value
11 & 21
Contingent consideration asset
Fair value
10 & 21
Financial liabilities at fair value
through profit and loss
Fair value
18 & 21
Where the Group’s accounting policies and disclosures
require the determination of fair value, the methods used to
measure fair are outlined in Note 21.
31. Functional and presentation
currency
The consolidated financial statements are presented in US
dollars (‘USD’) unless otherwise stated, which is the
Company’s functional currency.
The amounts contained in this financial report have been
rounded to the nearest thousand dollars in accordance with
the ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191 dated 24 March 2016,
unless otherwise stated.
Translation of foreign currency
Transactions in foreign currencies are translated to the
respective functional currency of Group entities at rates of
exchange ruling on the date of those transactions. Foreign
exchange gains and losses resulting from the settlement of
such transactions, and from the translation at the year-end
exchange rate of monetary assets and liabilities
denominated in foreign currencies, are recognised in profit
and loss.
Page 92
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
32. Other accounting policies
Business combinations
Non-controlling interests
When a business combination involves an agreement to
purchase the non-controlling interest at a later date
(referred to as a put arrangement), the Group will consider
it as a discrete transaction. When the Group does not have
a present ownership interest in the non-controlling interest
shares, the Group has elected not to account for the non-
controlling interest on initial acquisition. As a result, the
redemption payment is recorded as a financial liability and
the shares subject to the put are accounted for when
acquired. Changes in the put liability is subsequently
recognised in profit and loss, and if the option expires, is
treated as a disposal of a portion of a business.
Assumptions and estimation uncertainties
Information about assumptions and estimation
uncertainties that have a significant risk of resulting in a
material adjustment within the next financial year are
included in the following notes:
Note 6 - recognition of deferred tax assets: availability
of future taxable profit against which carried forward
tax losses can be used;
Note 10 – contingent consideration asset; assessment
of probable outcomes;
Note 11 - fair value measurement of investments;
Note 12 – classification of joint arrangements and
assessment of significant influence in associates.
Note 15 - impairment test: key assumptions underlying
recoverable amounts of intangible assets; and
Note 18 – other liabilities which includes a redemption
payment estimated on future forecasted earnings of
underlying investments held.
The acquisition method of accounting is used to account for
all business combinations regardless of whether equity
instruments or other assets are acquired. Consideration
transferred for the acquisition of an entity comprises the:
fair values of the assets transferred
liabilities incurred to the former owners of the
acquired business
equity interest issued by the group
fair value of asset or liabilities resulting from a
contingent consideration arrangement; and
fair value of any pre-existing equity interest in the
subsidiary.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are, with
limited exceptions measured at their fair values at the
acquisition date. The group recognises any non-controlling
interest in the acquired entity on an acquisition-by-
acquisition either at fair value or at the non-controlling
interest’s proportionate share of the acquired entity’s net
identifiable assets.
If the consideration transferred, amount of non-controlling
interest (if any) and the fair value of any previously held
equity interests in the acquired entity, exceeds the fair
value of assets acquired, goodwill is recorded on the
balance sheet. If consideration amounts are less than the
fair value of the net identifiable assets of the business
acquired, the bargain difference is recorded in profit and
loss.
Where deferred consideration is agreed, the amounts
payable in the future are discounted to their present value
as at the date of exchange. Contingent consideration is
classified as either equity or a financial liability. Amounts
classified as a financial liability are subsequently
remeasured to fair value with changes in fair value
recognised in the profit and loss.
For business combinations achieved in stages, the
acquisition date carrying value of the acquirer’s previously
held equity interest in the acquiree is remeasured to fair
value at the acquisition date. Any gains or losses arising
from a remeasurement is recognised in the profit and loss.
Transaction costs associated with the acquisition are
expensed as incurred.
Page 93
Navigator Global Investments Limited
2023 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2023
32. Other accounting policies
(continued)
Changes in accounting policies
New and amended standards
The Group has adopted all of the new and revised
Standards and Interpretations issued by the Australian
Accounting Standards Board (the AASB) that are relevant
to its operations and effective for the current reporting
period:
AASB 2020-3 Annual Improvements 2018-2020 and
other amendments
AASB 2021-7(a) Effective date of amendments to
AASB 10 and AASB 128 and general editorial
corrections
The amendments listed above did not have any impact on
the Group’s financial statements.
Accounting standards and interpretations
issued but not yet effective
The following Australian accounting standards and
interpretations that are relevant to the Group’s operations
have been issued but are not yet effective and have not
been adopted by the Group for the current period. These
standards are not expected to have a significant impact on
the Group’s consolidated financial statements:
AASB 2014-10 Sale or Contribution of Assets between
an Investor and its Associate or Joint Venture
(Amendments to IFRS 10 and IAS 28)
AASB 2020-1, 2020-6 & 2022-6 Amendments
regarding the classification of Liabilities as Current or
Non-current
AASB 2021-2 Amendments to Disclosure of
Accounting Policies and definition of Accounting
Estimates
AASB 2021-5 Amendments to Deferred Tax related
Assets and Liabilities arising from a single transaction
AASB 2022-7 Editorial corrections to AAS an repeal of
superseded and redundant standards.
Page 94
Navigator Global Investments Limited
2023 Annual Report
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Navigator Global Investments Limited (the ‘Company’) we state
that:
1. In the opinion of directors:
(a) the consolidated financial statements and notes that are set out on pages 40 to 94, and the Remuneration
report on pages 23 to 37 of the Directors' report, are in accordance with the Corporations Act 2001, including:
giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance
for the financial year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(i)
(ii)
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2023.
3. The directors draw attention to note 92 to the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Michael Shepherd, AO
Suvan de Soysa
Chairman and Non-Executive Director
Non-Executive Director
Sydney, 24 August 2023
Page 95
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Independent auditor’s report to the members of Navigator Global
Investments Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Navigator Global Investments Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 30 June 2023, the consolidated income statement, consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023
and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
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A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Investment Valuation
Refer to Notes 11 and Note 21 of the financial report
Why significant
The Group has a significant investment portfolio
comprising primarily of six minority interests in
unlisted investment managers including Bardin Hill
Investment Partners, LP, Waterfall Asset
Management, LLC, Capital Fund Management S.A.,
Capstone Investments Advisors, LLC, Pinnacle
Asset Management, LP, MKP Capital Management,
LLC (Strategic Portfolio) and two minority interests
in unquoted securities in Invictus Capital Partners
and Marble Capital As at 30 June 2023, the value
of these unlisted investments was US$482 million
which equates to 63% of total assets.
As disclosed in the Group’s accounting policy
disclosed in Note 11, the Strategic Portfolio are
financial assets recognised at fair value through
profit or loss, and Invictus Capital Partners and
Marble Capital are financial assets recognised at
fair value through other comprehensive income in
accordance with Australian Accounting Standards.
Key assumptions such as the growth rates and
discount rates applied to the management fee and
performance fee income streams can have a
significant impact on the fair value of these
financial assets and amounts recorded in the
financial statements.
Given the significant estimation and judgement
involved in measuring the fair value of investments,
we considered this to be a key audit matter.
Note 11 to the financial statements provides a
summary of the Group’s accounting policy relating
to the investments and Note 21 includes the
disclosures relating to the significant unobservable
inputs to the valuation.
How our audit addressed the key audit matter
Our audit procedures relating to the valuation
of the investments included the following:
• Obtained an understanding of the key
processes adopted by management to
determine the fair value of the investments
at balance date;
• Evaluated the qualifications, competence,
and objectivity of the external valuer
engaged by management;
• Confirmed the ownership interest with the
respective investee fund managers at 30
June 2023;
• Obtained the most recent audited financial
statements of the underlying investment
managers, reviewing the nature of the
underlying investments held and the
recorded fair values of the investments,
including the accounting basis adopted for
such valuations;
• Assessed the independence, competence
and objectivity of the auditing firms of the
managers and the content of their audit
opinions;
• Obtained from management their
assessment of the most recent unaudited
financial information of the asset managers
and evaluated the reasonableness of any
material fair value movements (or the lack
thereof) within the discounted cash flow
models supporting the fair value;
• We involved our valuation specialists in the
assessment of the valuation methodologies
and assumptions used by the Group;
• Our valuation specialists tested the
accuracy of the model used by the external
valuer, and on a sample basis we challenged
the underlying cash flow assumptions and
agreed to underlying supporting
documentation;
Page 97
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Why significant
How our audit addressed the key audit matter
• Obtained the assurance report on the
internal controls of the investment
manager’s administrators in relation to fund
administration services for the year ended
30 June 2023, and assessed the auditor’s
independence, qualifications and objectivity
and the results of their procedures; and
• Assessed the adequacy of the Group’s
disclosures included in Notes 11 and 21 to
the financial statements.
Recoverability of the US cash generating unit
Refer to Note 15 of the financial report
Why significant
How our audit addressed the key audit matter
Significant judgement and estimations are involved
in determining the value-in-use (“VIU”) of the US
cash generating unit (“CGU”).
VIU is the Group’s method for measuring the
recoverable amount of the US CGU (including
goodwill) at balance date and is used to assess the
carrying amount of the CGU for impairment.
The model used by the Group to measure the VIU of
the CGU is complex due to the assumptions and
estimations used in forecasting the future cash
flows of the CGU.
Given the level of judgement and estimation
involved in determining VIU, and the relative
amount of goodwill allocated to the US CGU, we
considered this to be a key audit matter.
Our audit procedures included the following:
• Tested the mathematical accuracy of the
CGU’s VIU model;
• Evaluated the Group’s assumptions and
estimates in relation to the forecast cash
flows based on most recent Board
approved forecasts by performing
sensitivity analysis and evaluating and
testing the key assumptions used to
determine the VIU;
• Evaluated the qualifications, competence
and objectivity of the external specialists
engaged by management;
• Considered the accuracy of the Group’s
cash flow forecasts by comparing historic
forecasts to actual performance;
•
Involved our valuation specialists in
assessing growth rate and discount rate
used in the VIU model. Where applicable,
we corroborated key assumptions with
external information;
• Assessed whether the forecast cash flows
in the VIU model were consistent with
those used to test recoverability of the
CGU’s deferred tax assets;
• Performed sensitivity analysis by varying
key assumptions and assessing the impact
on the recoverable amount of the CGU; and
Page 98
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Why significant
How our audit addressed the key audit matter
• Assessed the adequacy of the disclosures
included in Note 15 to the financial
statements.
Acquisition
Refer to Note 9 of the financial report
Why significant
How our audit addressed the key audit matter
The Group completed the acquisition of Invictus
Capital Partners on 4 August 2022 for total
consideration of $100 million to be paid over a three-
year period.
Given the size of the acquisition, we considered this
to be a key audit matter.
Note 9 discloses a summary of the acquisition and
the Note 32 disclosed the Group’s accounting
policies relating to the acquisition.
Our audit procedures
included the following:
for the acquisition
• Assessed whether the transaction was
in accordance with the
of Australian
accounted for
relevant
Accounting Standards;
requirements
• Assessed the Group’s determination of any
deferred or contingent consideration; and
• Assessed the adequacy of the Group’s
in Note 9 to the
included
disclosures
financial statements.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2023 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
Page 99
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
Page 100
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2023.
In our opinion, the Remuneration Report of Navigator Global Investments Limited for the year ended
30 June 2023, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Nathan Young
Partner
Brisbane
24 August 2023
Page 101
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
SHAREHOLDER
INFORMATION
Navigator Global Investments Limited
Shareholder information
ASX additional information
As at 17 August 2023
Additional information required by the Australian Securities Exchange Limited (ASX) Listing Rules and not disclosed elsewhere
in this document is set out below.
Number of security holders and securities on issue
Navigator has issued the following securities:
243,692,009 Ordinary Shares held by 3,841 shareholders; and
90,289 Convertible Notes held by 1 noteholder.
Substantial shareholdings
The following beneficial owners have a substantial relevant interest in ordinary shares of Navigator Global Investments Limited:
Category
Blue Owl Capital Inc. and its controlled entities
Navigator Global Investments Limited1
Perennial Value Management Limited
Sean McGould, his controlled entities and associates
Eley Griffiths Group
Norges Bank
Number of
ordinary shares
%
48,524,304
48,524,304
24,596,000
19,438,084
17,099,575
13,865,008
19.91%
19.91%
10.09%
7.98%
7.02%
5.69%
1 The Company lodged has a substantial relevant interest in its ordinary shares due to restrictions on disposal of the
shares under a Shareholder Agreement with entities associated with Blue Owl Capital Inc. A substantial shareholder
notice setting out details of the Shareholder Agreement was lodged with the ASX on 1 February 2021.
Twenty largest holders
Name
Citicorp Nominees Pty Limited
J P Morgan Nominees Australia Pty Limited
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
Priority Investment Management Pty Ltd
BNP Paribas Nominees Pty Ltd
UBS Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited – NT-Comnwlth Super Corp
HSBC Custody Nominees (Australia) Limited – GSCO ECA
BNP Paribas Nominees Pty Ltd – IB AU Noms RetailClient DRP
Washington H Soul Pattinson and Company Limited
Australian Executor Trustees Limited
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd
Mr Shay Shimon Hazan-Shaked
Neweconomy Com AU Nominees Pty Ltd
Mr Mark Sheffield Hancock & Brig Ian Denis Westwood
Mr James William Tonkin & Mrs Sharon Kathleen Tonkin
Brispot Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited- A/C 2
Bond Street Custodians Limited
Page 103
Number of
ordinary shares
held
66,590,512
58,616,610
21,987,909
11,522,455
7,275,617
5,778,701
5,683,638
5,279,594
4,890,123
2,554,217
1,990,000
1,797,731
1,444,319
1,350,000
1,158,281
944,465
700,000
592,955
460,316
450,000
Percentage of
capital held
27.33%
24.05%
9.02%
4.73%
2.99%
2.37%
2.33%
2.17%
2.01%
1.05%
0.82%
0.74%
0.59%
0.55%
0.48%
0.39%
0.29%
0.24%
0.19%
0.18%
Navigator Global Investments Limited
Shareholder information
ASX additional information (continued)
Distribution of shareholdings
Range
1-1,000
1,001-5,000
5,001-10,000
10,001-50,000
50,001 – 100,000
100,001 and over
Total
Number of
holders of
ordinary shares
% of holders
Number of ordinary
shares
% of share
961
1,329
581
803
96
71
25.02%
34.60%
15.13%
20.91%
2.5%
1.85%
498,935
3,690,256
4,444,514
17,663,057
6,856,815
210,538,432
3,841
100.00%
235,692,011
0.20%
1.51%
2.82%
7.25%
2.81%
86.40%
100.00%
The number of shareholders holding less than a marketable parcel of ordinary shares is 279.
Voting rights
Ordinary Shares
The Company has 243,692,009 fully paid ordinary shares
on issue.
The fully paid ordinary shareholders of the Company are
entitled to vote at any meeting of the members of the
Company and their voting rights are:
on a show of hands – one vote per shareholder;
and
on a poll – one vote per fully paid ordinary shares.
Convertible Notes
Noteholders do not have any voting rights on the
Convertible Notes held by them.
On-market buy-back
There is no current on-market buy-back.
Unquoted securities
Convertible Notes
Restricted securities and voluntary escrow
There are no securities in voluntary escrow.
Affiliates of Blue Owl Capital Inc. have entered into a
Shareholder Agreement with the Company which contains
restrictions related to their holding of Shares and
Convertible Notes. Blue Owl Capital Inc and its affiliates
may only dispose of Ordinary Shares and Convertible
Notes representing in aggregate up to 8,400,000 Ordinary
Shares in the first two years to 31 January 2023, and
representing in aggregate up to 40,524,306 Ordinary
Shares in the first five years to 31 January 2026, other than
where Blue Owl Capital Inc or its affiliates make a change
of control offer in connection with the Company receiving a
third party change of control offer.
Stock exchange listings
The Company’s securities are not listed on any other stock
exchange.
The Company issued 102,283 Convertible Notes on 1 February 2021. Total notes on issue at balance date are 90,289 notes
representing 60,222,763 shares (2022: 68,222,761 shares) following a conversion of 11,994 notes on 6 June 2023 in
accordance with the Convertible Note Deed.
The notes are converted at the option of the holder at any time and at the option of the issuer after two years (subject to
maximum ownership limits).
Name
J P Morgan Nominees Australia Pty Limited in its capacity as custodian for
Blue Owl Capital Inc in its capacity as trustee for Dyal Trust I
Number of
Convertible Notes
held
Percentage held
90,289
100%
There is no price payable on conversion of the Convertible Notes.
Page 104
Navigator Global Investments Limited
Shareholder information
ASX additional information (continued)
The following sets out the key terms of the Convertible Notes:
Ordinary shares issued on
conversion
Each Convertible Note will be convertible into Shares ranking equally with other existing fully paid
ordinary shares in the Company.
The Company must procure official quotation of the Shares issued on conversion.
Convertible Noteholder
conversion rights
A Convertible Noteholder may, at any time, require the conversion of all or some of its outstanding
Convertible Notes, subject to the following regulatory restrictions:
(a) where such conversion is a notifiable action for the Convertible Noteholder under the FATA and
that Convertible Noteholder has not received FIRB approval in respect of such conversion;
(b) where such conversion would contravene section 606 of the Corporations Act;
(c)
such conversion is subject to the expiration of a waiting period under the HSR Act, until the
expiration of such waiting period; or
(d) where such conversion is prohibited by any applicable law or regulation.
Company Conversion Rights
On an annual basis from the seventh anniversary of the issue date, the Company may require
conversion of all or some of the Convertible Notes. Where the Company requires the conversion for
some of the Convertible Notes:
(a)
(b)
the aggregate face value of all Convertible Notes to be converted on that date must be at least
US$1 million; and
if there is more than one Convertible Noteholder, the conversion must be pro rata for each
Convertible Noteholder based on the number of Convertible Notes held by that Convertible
Noteholder as a proportion of all Convertible Notes on issue.
Maturity Date
The Convertible Notes will mature on 1 February 2031, subject to extension where a regulatory approval
or consent in respect of the conversion of Convertible Notes is required.
On the Maturity Date the Convertible Notes will be converted or redeemed for cash in certain
circumstances.
Restrictions on transfer
The Convertible Notes are transferrable:
(a)
without the prior written consent of the Company, provided that if such transfer is a notifiable
action under the FATA, that the Convertible Noteholder has received FIRB approval in respect
of such transfer and such transfer is not or would not otherwise be prohibited or restricted
pursuant to any applicable law or regulation; or
(b)
otherwise, subject to the prior written consent of the Company (such consent may be given or
withheld at the absolution discretion of the Company).
US law transfer restrictions also apply to the transfer of Convertible Notes.
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