Princess Private Equity Holding - Offering an attractive dividend yield

Princess Private Equity Holding (PEY) posted a year-to-date NAV total return (TR) to end-October 2023 of 4.9%, 2.4% of which was from Q323. PEY’s performance continues to be assisted by portfolio earnings, with last-twelve-month (LTM) revenue and EBITDA growth to end-September 2023 of 16% and 15%, respectively, and sustained healthy average EBITDA margin of 24%. PEY’s balance sheet remains firm with c €134m in undrawn credit facility and €3m in cash, further assisted by the Civica sale proceeds

Princess Private Equity Holding - Waiting for a rebound in global PE deal activity

Princess Private Equity Holding (PEY) posted a 3.5% NAV TR in H123, bringing its 12-month return to c 10%. Its portfolio maintains strong last 12-month (LTM) revenue and EBITDA momentum of 17% and 15%, respectively, at end-June 2023 and some of its holdings also benefited from peer multiple expansion (eg KinderCare). PEY’s holding-level balance sheet remains solid, with cash and the undrawn part of its credit line covering all of its outstanding investment commitments. PEY reiterated its dividen

Princess Private Equity Holding - Planning to resume dividend payments in June

During its Q422 results release, Princess Private Equity (PEY) announced the discontinuation of its foreign exchange (FX) hedging strategy from 1 April 2023 and an upsizing of its credit facility from €110m to €140m in response to the holding-level liquidity constraints it faced in late 2022. We believe investors should welcome these measures, as they facilitate PEY’s balance sheet management while allowing it to stay close to fully invested (investment level at 101.3% at end-January 2023) and t

Princess Private Equity Holding - Portfolio resilient, holding-level liquidity strained

Princess Private Equity Holding’s (PEY’s) portfolio has fared quite well in 2022, with the +3.7% NAV total return (TR) in Q322 bringing the 9M22 TR decline to a moderate 4.0%. This was likely assisted by PEY’s sector mix and the temporary allocation of excess funds into senior loans in H221 (gradually redeemed throughout 2022). However, this was overshadowed by PEY’s decision to suspend its second interim dividend amid holding-level liquidity concerns due to high cash outflows for foreign exchan

Princess Private Equity Holding - Withstanding the broader market turmoil so far

Princess Private Equity Holding (PEY) posted only a slight decline in NAV in total return (TR) terms so far this year, which may be an indication of its portfolio’s resiliency. This allowed PEY to outperform public markets over the medium term with a NAV TR of 73.2% over the past five years versus the MSCI World TR at 66.9% (although PEY’s returns were behind private equity, PE, peers). Still, its shares experienced a stronger de-rating, leading to PEY’s discount to NAV widening to 17% from c 5%

Princess Private Equity Holding - Seeking to deploy excess liquidity

Princess Private Equity Holding’s (PEY) NAV total return (TR) reached 19.4% in FY21 in euro terms, supported by exits (most notably from GlobalLogic) and unrealised revaluation gains across most of its top 10 portfolio holdings. Amid strong realisation activity (which outpaced its new private equity investments in FY21), PEY temporarily invested part of its dry powder in senior loans in H221 to mitigate cash drag. Having said that, PEY’s manager is confident in its investment pipeline, which cur

Princess Private Equity Holding - Redeploying funds after strong realisations

Princess Private Equity (PEY) reported a c 21% NAV TR from January to end-October 2021 driven by exits (most notably GlobalLogic in Q121) and revaluations of existing portfolio holdings. PEY’s realisations outpaced new private equity investments in the period, which has led to an increase in net current assets. That said, PEY has temporarily allocated part of them in senior loans to mitigate the risk of cash drag and announced several new direct private equity investments that are still in the c

Princess Private Equity Holding - Solid Q121, attractive dividend and well-filled pipeline

Princess Private Equity (PEY) reported a strong c 10% NAV TR from January to end-April 2021 (10% in FY20), largely driven by its in-closing exit from GlobalLogic announced in March 2021, generating a 45% uplift from its end-February 2021 carrying value. This represents a very solid 5.3x multiple on invested capital, despite the short holding period since 2018. PEY’s attractive dividend yield of c 5% is ahead of most of its peers and the manager is confident in its ability to maintain the current

Princess Private Equity Holding - Resilient portfolio continues to expand

Princess Private Equity Holding (PEY) recorded a solid 10.0% NAV total return over the 12-month period ending on 30 October 2020, despite a 14.1% decline in March reflecting the initial impact of COVID-19. Its well-diversified portfolio, focused on relatively resilient sectors, required minor additional financing to mitigate liquidity risks. The rate of new investment picked up in Q320 and reached €63.5m ytd, close to the FY19 total of €69.3m. As there is currently no material portfolio funding

Princess Private Equity Holding - Actively driving portfolio resilience

Princess Private Equity (PEY) delivered a robust NAV TR increase in FY19 of 21.1% on the back of good earnings momentum and progress with the ‘buy and build’ strategy for key portfolio holdings. The company remains fully invested, with most of its €50m credit facility drawn at end-January 2020. It plans to repay this on receipt of proceeds from the Action exit, which was agreed in FY19. Looking ahead, PEY remains committed to its strategy of creating resilience in portfolio companies aimed at mi

Princess Private Equity Holding - Steady realisations support dividend payout

Following high investment activity in 2018, which allowed Princess Private Equity (PEY) to become fully invested, its balance of new investments vs realisations has been broadly neutral so far in 2019. PEY received c €68m in distributions, mainly from the winding down of legacy funds and gradual disposal of Ceridian HCM shares. The proceeds were used to finance a healthy dividend (current yield of 5.7%) and €52m in new deals, mainly in fairly defensive sectors such as healthcare and education. W

Princess Private Equity Holding - Strong flow of attractive deals in FY18

Princess Private Equity Holding (PEY) recorded a particularly high level of investment activity in FY18 (to 31 December), following on from a record year of realisations in FY17. The fund focuses on profitable companies with: a consistent track record of EBITDA growth (an average of 11.5% for 2018 across the whole portfolio); meaningful growth potential, supported by strong competitive positions in growing end markets; and clear scope for manager Partners Group’s industry value creation (IVC) te

Princess Private Equity Holding - Diversified global portfolio with high dividends

Princess Private Equity Holding (PEY) offers investors access to the private equity and debt expertise of global manager Partners Group ($74bn AUM), as well as selected co-investments with third-party managers. It has followed a direct investment strategy since 2011, when it refocused away from third-party funds of funds, and has seen solid NAV and share price performance over most periods of five years and shorter. Partners Group’s differentiated global approach includes a highly selective proc

LIBERUM: Plus500: Strategic progress pays dividends

Tatton Asset Management (TAM LN) - Record net inflows

Tatton, the leading on-platform discretionary fund manager (DFM) and IFA support services Group has released a trading update ahead of its results to 31 March 2024, due on 18 June 2024.

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

BlackRock World Mining

BRWM’s managers: we see all the classic signs of high commodity prices...

Ondo InsurTech FY24 Trading Update

Ondo InsurTech has released a brief post-YE update revealing its good progress continued through 2H24 and consequently FY24 will be in line with market expectations.

NextEnergy Solar Fund - Attractive Refinancing

The refinancing of a £135m revolving credit facility and the extension of a similar £70m facility gives NESF firepower as development opportunities for new solar are especially attractive thanks to lower module prices in Europe. They give the fund key financial flexibility at a critical time as it pursues its capital recycling programme.

Jupiter Green

JGC’s fundamental story continues to show resilience, but the discount remains wide…

Lowland Investment Company - Is the tide turning?

Lowland Investment Company’s (LWI’s) unconstrained, multi-cap investment policy differentiates it from most peers in the AIC UK Equity Income sector. It offers investors broad market exposure, outside of the large, traditional ‘income stocks’ at a 13% discount to NAV. The underperformance of small- and mid-cap companies versus larger peers has slowed and a turnaround would be very positive for LWI. Portfolio returns are already benefiting from acquisition activity, spurred by low valuations, and

Resilient FY24, confident long-term outlook

Vp’s full year update highlights sector-leading results, once again benefiting from the diversity of its end markets and the quality of its specialist businesses. With results expected to be broadly in line with expectations, we trim our FY24 PBT forecast by c.5% to £39.0m, a shade below the FY23 outturn (£40.2m). We consider this an impressively resilient performance set against a mixed market backdrop. Under new leadership, a strategic refresh is underway and management is confident in long

The Hardman & Co Monthly: April 2024

Feature article: Steady as she goes, but could be better: A review of investment company liquidity since 2016 Liquidity is the lifeblood of equity markets. The measurement of liquid asset availability to a market or company is a way of gauging a market’s health. This article builds on our previous work, which analysed the liquidity data for non-financial trading companies, by applying the same analytical techniques to the investment companies (IC) space. We analyse liquidity for ICs as a whol

AUM up 30% in FY24, record flows, forecasts raised

AUM jumped £3.8bn or +30% in FY24, reaching £16.6bn on 31 Mar 24, 12% above our previous forecast of £14.7bn. Including 50%-owned 8AM Global, Assets Under Influence hit £17.6bn. Investment performance provided a tailwind, adding £1.5bn to AUM. But our key takeaway from Tatton’s hugely impressive last few years, is that it has designed and implemented a superior offering in platform-MPS with net flows consistently far higher than peers. That leadership looks even more pronounced in H2-24 with net

abrdn Private Equity Opportunities – On the way to greener pastures?

Despite navigating through what its managers considered to be challenging conditions in 2023, abrdn Private Equity Opportunities (APEO) was able to report both positive NAV growth and double-digit share price returns in its recently published annual results. APEO’s discount has narrowed by more than 10% in recent months, so that it is trading on a 28.9% discount currently, narrowing from about 45% last October. These figures were generated over a period that saw a slowdown in activity in Europea

NextEnergy Solar Fund – High- and growing-income opportunity?

NextEnergy Solar Fund (NESF) is almost 10 years old. Since launch, it has built a £1.2bn, 933MW portfolio of 100 operating solar assets, powering the equivalent of over 330,000 homes, declared dividends totalling £333m, and avoided the emission of about 2.2 Mt CO2e. NESF is on track to pay 8.35p in dividends, with forecast dividend cover of about 1.3x. Share price weakness that has afflicted the whole sector means that dividend translates to a yield of 11.1%, one of the highest in its sector, a

LIBERUM: Speedy Hire: Weakness in FY 24 but recovery in FY 25

Primary Health Properties - Strategic and accretive Irish expansion

Primary Health Properties (PHP) has agreed to acquire Ireland’s first Enhanced Community Care (ECC) facility for a total consideration of €30m. With its interim results, PHP highlighted its continued plans for strategic expansion in Ireland, where higher yields support accretive investment in an expanding market. Alongside low-risk, value-creating asset management schemes and accelerating organic rental growth, this represents a key opportunity for continuing growth in income. Our forecasts are