NB Private Equity Partners

If NBPE’s portfolio companies prove resilient, the 35% discount may offer value…

NB Private Equity Partners - Key takeaways from the CMD 2022

During NB Private Equity Partners’ (NBPE) capital markets day (CMD) on 5 October 2022, its management team highlighted that, despite the recent tough macro conditions, NBPE’s track record remains strong, as its direct co-investments delivered a gross IRR and multiple of invested capital (MOIC) at 18.5% pa and 2.6x over the five years to end-August 2022, respectively. With a sustained strong deal flow generated by the Neuberger Berman (NB) Private Markets platform (in which NBPE can invest on a c

NB Private Equity Partners - Track record yet to be fully rewarded

NB Private Equity Partners’ (NBPE) latest NAV (as at end-July 2022) reflects an update on most private valuations from end-March to end-June 2022, which led to a very limited 2% fall in NBPE’s private portfolio fair value. This impressive resilience allowed NBPE to deliver a strong three- and five-year NAV TR to end-July 2022 of 18.6% and 15.3%, respectively (c 2x the return of MSCI World Index), led by co-investments. Despite its strong track record, NBPE’s shares still trade at a c 31% discoun

Spread ‘em!

We explore how much dispersion in returns of stocks drive the differing fortunes of trusts

Getting in on the act: private markets

Private markets could be the next big opportunity for investors

NB Private Equity Partners

NBPE has had an exceptional 2021, but prospects remain bright

Bargain hunt

We survey the discount opportunities in the market and update on the performance of our Discounted Opportunities Portfolio

NB Private Equity Partners - Strong NAV contribution from exits

NB Private Equity Partners (NBPE) continues its strong performance driven by exits and valuation uplifts in existing portfolio holdings. In the 12 months ending October 2021, it delivered a NAV total return of 57.8% in US dollar terms, with 5.4pp from the recent IPO of the warehouse automation business AutoStore. The performance was also supported by growth in the remaining portfolio companies. The realisations have left NBPE with increased dry powder, while the investment level remained within

How Do You Like Them Apples

Very few investors need to be reminded that the US market has hugely outperformed the rest of the world in the historic bull market following the Great Financial Crisis. Unfortunately, the discretionary fund managers that manage the portfolios of British retail investors need reminding even less, having been as a group systematically underweight in the US in their equity allocations. In the below chart, we have plotted the average US weighting in the equity portion of UK multi-asset funds in the

Even better than the real thing

Private equity investing has been around for many decades. However private equity is making the headlines like never before. The recent bidding war for Wm Morrisons is a case in point although, over the last decade or so, private equity has been steadily increasing as a share of global M&A transactions as the graph below shows.

Bargains galore

We last updated our discounted opportunities portfolio in July. Since then markets have been grinding higher but discounts have not moved – and perhaps slightly widened. We think readers will largely agree that it is hard to have conviction about the direction of markets and leadership at the moment, which may explain the static picture regarding discounts. At a directional level, the easy gains in the recovery have been made, and government support schemes have still to be wound down, creating

60/40 and other dinosaurs

Over the decades, investors’ ideas about how to build the perfect investment portfolio have evolved. Large independent pension fund investors have typically led the way, with consultants and smaller pension funds following, and then discretionary private client wealth managers followed by individual retail investors echoing trends as they trickle down. Markowitz is identified as the architect of modern portfolio theory and, to an extent, over time investors have been working with and adapting t

Grade inflation

Markets had a great first half to 2021 following on from what was a strong 2020, just as we all would have expected during a pandemic, no doubt! Our discounted opportunities portfolio has performed respectably in the six months to the end of June. We had one great success, with a trust leaving the list after a barnstorming rally, but overall results from a NAV and discount perspective were mixed, as we discuss below. Overall share price ratings are now high in the investment trust space, with de

NB Private Equity Partners - Direct co-investments the key return driver

NB Private Equity Partners (NBPE) delivered a 12-month NAV total return to end-May 2021 of 52.3% in US$ terms, strongly supported by its exit activity. This includes 10 deals announced in 2021 with an estimated uplift of US$160m (15% of end-2020 NAV), most of which is reflected in the current NAV. NBPE received c US$139m from all its realisations in 2021 until 15 June and expects a further c US$116m once all the above deals have closed. The remaining portfolio also performed well, benefiting fro

CMD - Broadening & deepening client relationships

A dose of morosity

No change in the narrative. Aviva’s ship sails on as usual. The PRT business is still going well, inflation remains an impediment to a strong P&C improvement, retail customers seem more interested in the rising cost of living than savings’ products and Aviva investors see no real signs of an improvement. This is the same story as in recent quarters and, in that context, our thesis remains the same.

Rising signals

'Airlines will be shocked when Covid leases run out and rates go up’

Morning Note – 24 May 2023

The Opportunity in Short-Termism

Fears vs Fundamentals (again) For 2 years, European banks have enjoyed potent earnings upgrades. For 2 years, valuations have been trapped between ''unease'' and ''outright panic'' multiples. This note looks at the latest fears and fundamentals behind this ongoing struggle. We extract lasting lessons from Q1, a record profit quarter, and extend our work on the fears of the moment: ''peak NIM'', CRE and credit contraction. Peak NIM - no, not yet We refresh our top-down margin work for the late

NAHL Group plc: AGM update: Continued progress in scaling the business for future growth

NAHL’s AGM statement released today, is encouraging as management continues to scale the businesses for further growth. As a result, the Board’s expectations for the full year remain unchanged and we make no alterations to our forecasts. As a reminder, these still call for a c.13% increase in adjusted PBT in 2023, c.170% in FY24 and a further c.70% in FY25. Our current fair value remains at 65p but this is likely to rise as the Group delivers on its significant potential.

WH Ireland: Avation - Market tailwinds highlighted in Bloomberg Intelligence event

Avation is a lessor of 35 commercial aircraft to a diversified client base of 17 airlines. Yesterday's Bloomberg Intelligence webinar event entitled ‘Aircraft Lessor Recovery and Innovation' reaffirmed a number of positive market trends for aircraft lessors at the present time. Key points included: i) structural deficits in the supply of turboprop aircraft in the coming years, with aircraft retirements expected to outpace limited production of new aircraft; ii) the strong recovery in air travel

This Week's AIM Highlights 19th May

Early Mover in UK Lab-grown Meat

BSF Enterprise Plc (BSF) is a biotechnology company focused on acquiring, combining, and building businesses in the lab-grown tissue space. It aims to achieve this through an acquisition-led growth strategy and has already acquired the tissue engineering and cellular agriculture company, 3D Bio Tissues.

An Asian exploration

We spent last week with HSBC and STAN in Hong Kong and Singapore, delving into the detail of structural drivers for Asia. Both banks have a good story to tell, with business models that are well positioned and being enhanced further. In isolation we did not learn enough to warrant a change in recommendation but tailwinds from the region are not to be overlooked. A deep dive into a core part of the investment case Asia sits at the core of the investment case for both HSBC and STAN given its share

c.60% discount to NAV... Can deep value prevail?

Petershill (PHP) reported a Q1-23 double digit % headline miss on FRE/DE mostly driven by cyclical factors. However, fundraising was resilient including more closings after quarter end and PHP reiterated FY2023 guidance ($220-250m FRE). We remain outperform, 250p target price. Weakness on headline earnings amid a muted industry backdrop Private markets are being tested in 2023 with private equity deal activity down c.50-80% y/y. In this context, the headline Q1 miss was mostly driven by cyclica

Trading update indicates strong FY23 performance

Very strong CY22 - CY23 upgraded 10%

XPS CMD articulates growth potential