Trading on a c43% discount and yielding 6.6%, we view CTPE as offering deep value. Whilst this value reflects of two years of muted investment returns, in our opinion the market is being overly cautious. Specifically, we highlight their investees robust sales and EBITDA growth (20% & 24%, respectively), the rebound in exit activity and undemanding valuation multiple (c11.3x EBITDA). We are bullish for a multi-stage re-rating with the discount initially tightening from 43% to c20% (c40% upside) over the next c12 months as investor confidence recovers from the current bout of uncertainties and performance picks up. Our expectation is that when the initial re-rating occurs, it will be rapid. Given this we believe that investors should use the current environment (and associated valuations) to lock in CTPE’s 6.6% yield (quarterly dividends) and get paid to wait.
