ÖKOWORLD (ÖWAG) has demonstrated over the past months that despite volatile market conditions, it can leverage the positive sentiment towards sustainable investment to drive growth in assets under management (AUM) beyond €1.3bn. The healthy ytd performance allowed most of the funds managed by its subsidiary, Ökoworld LUX, to rebound to the record high levels set in Q318. However, we note that H119 results were largely assisted by a dividend payment from an ÖWAG-related company. To generate significant performance fees in FY19, which are one of ÖWAG’s key earnings drivers, the funds need to post strong positive returns in H219 as well.
In H119 all funds (except for ÖKOWORLD Growing Markets) managed to fully recover from the downturn at the end of FY18, reaching previous high-water marks. However, we believe that the performance fees ÖWAG earned in H119 were limited (if any). Nevertheless, net profit rose by c 19% y-o-y to €2.5m mainly due to dividends received from its subsidiary, Ökoworld LUX and despite a visible increase in personnel expenses and fees paid out to third-party distributors.
Flagship fund ÖKOWORLD Ökovision Classic (which represented 77% of ÖWAG’s AUM at end-June 2019) posted a 17.2% return in H119 compared with the MSCI World Index return of c 17.5%. In addition, the fund’s AUM grew to over €1.0bn. We believe that this demonstrates that in Germany sentiment towards sustainable investment is strong enough to fuel further development
The current Refinitiv consensus for ÖWAG is based on the estimates of a single analyst and implies P/E multiples of 21.2x and 19.2x for FY19e and FY20e, respectively. This represents respective premiums of 28% and 27% to selected peers. Based on the most recently paid dividend, ÖWAG offers a dividend yield of 2.7%. However, we note that the prospective dividend potential could be boosted by an increase in performance fees earned.