NB
Private Equity Partners (NBPE)
25/09/2024
Results analysis from Kepler Trust
Intelligence
NB Private Equity Partners
(NBPE) has released its interim results for the six months to
30/06/2024. The net asset value (NAV) per share was $28.87
(£22.05), which translates to a NAV total return of 1.0% over the
six-month period. This was driven by an increase of 4.3% in the
value of the private companies that NBPE owns, on a constant
currency basis (i.e. removing currency fluctuations), partially
offset by continued volatility in NBPE's quoted holdings, and
foreign exchange headwinds.
Operating performance of
NBPE's companies continues to be positive, with the aggregate
weighted average revenue growth of 11% and EDITDA growth of 16%
over the last 12 months.
Investment activity was
robust during the period, with $72 million invested in new and
follow-on investments. Despite a subdued private equity exit
environment, NBPE received cash proceeds of $126 million. This
includes transactions that were announced in 2023 but closed in
2024.
NBPE's liquidity position
remains strong; its $386 million of cash, liquid investments and
undrawn credit line leaving it well positioned to take advantage of
investment opportunities.
A dividend of $0.47 for the
first half of 2024 was paid in February, with a further semi-annual
dividend paid in August, after the company's interim reporting
period.
Paul Daggett, managing
director at Neuberger Berman, said: "We are pleased with the
positive operating performance of our portfolio companies which we
believe reflects the high-quality nature of the underlying
assets."
Kepler
View
Realisation activity started
to increase in the second half of 2023 and has continued into 2024,
which has helped NB Private Equity Partners (NBPE) step up the pace
of investment.
NBPE has a number of
competing options for its cash, including funding of new
investments, the dividend and buybacks. Any option must further
consider the maturity of the 2024 ZDPs in October, which the board
have announced their intention to repay.
The good news is that NBPE
has a strong balance sheet, which is a corollary of the manager
having a high degree of control over the timing of new
investments.
In our view, buybacks will
continue to be opportunistic and tactical and the dividend will
remain the main way capital will be returned to
shareholders.
Realisation may arguably be
the most visible value driver for private equity portfolios, but it
is far from being the only driver.
While the board acknowledges
that opportunities for exits remain constrained, some of the
headwinds that have caused this are subsiding. NBPE's underlying
companies continue to deliver strong revenue and EBITDA growth and
are increasingly mature, suggesting that there are plenty of
companies within the portfolio with the potential to benefit from
liquidity events.
Investors who are taking a
long-term view may see the current discount to NAV of around 26% as
a potentially attractive entry point.
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