REG - Bridgepoint Group - Half-Year Update 2021
Bridgepoint Group plc
Strong performance for the first six months of 2021 and good momentum looking ahead
Bridgepoint Group plc (Bridgepoint or the Group) announces an update for the six months ended 30 June 2021, the period prior to the Group's recent listing on the London Stock Exchange
2021 half-year highlights:
•
Good trading momentum with revenues up 55% and underlying EBITDA up 178% compared to the prior year period
•
Total Assets Under Management (AUM) of €28.5 billion, an increase of 54% compared to June 2020, driven by the acquisition of EQT Credit and the launch of BDC IV
•
Fee paying AUM of €17.7 billion, a 41% increase from June 2020
•
Capital deployment in line with expectations: €2.7 billion invested in the first half of 2021 compared to €0.6 billion for the prior year period (which included disruption from start of COVID crisis). During the half-year investments were made into six companies in the United Kingdom, United States, Ireland and Switzerland
•
Portfolio performed well: benefitted from continued improvement in economies across Europe and underpinned by strong realisations (€2.1 billion of gross exits completed in the period)
•
Continued strong momentum in fundraising with Bridgepoint Europe VII (BE VII) now in market with a target fund size of €7.0 billion
Commenting on this performance, William Jackson, Executive Chairman, said:
"I am pleased to be sharing a strong performance for the first six months of the year following our IPO on the London Stock Exchange. I would like to extend my thanks to the investors who have chosen to invest in Bridgepoint and support us on the next exciting phase of our development. In line with expectations, we delivered strong growth in revenues and profits in the first half of the year following the completion of the acquisition of EQT Credit in October 2020 and the start of investment activity in Bridgepoint Development Capital's new Fund, BDC IV, in January 2021.
"Following the disruption caused by the COVID pandemic last year, during the first half of this year capital deployment returned to normal levels across all our strategic asset classes and we capitalised upon market conditions to deliver strong exits. We're making good progress with our current fundraising, with our new flagship equity Fund, Bridgepoint Europe VII, now in market with a €7 billion fund size target.
"Looking forward, whilst we continue to expect market volatility as economic conditions recover from the initial shocks of the pandemic, we are confident in the growth prospects for our business and our ability to continue to source attractive opportunities for our Funds."
Presentation and Q&A
The 2021 half-year update along with presentation slides will be available on the company's website following publication of this update:
https://www.bridgepointgroupplc.com/results-reports-and-presentations
Additionally, management will hold a webcast to answer questions from analysts and investors at 9am UK time on Wednesday 15th September:
Join via weblink: https://www.lsegissuerservices.com/spark/BRIDGEPOINTGROUP/events/030cbbc3-9c34-460b-9f74-18b7ae72b25f
ENQUIRIES
Bridgepoint
Analysts and investors
Adam Key
adam.key@bridgepoint.eu
+44 7833 748010
Media
Christian Jones / James Murray
Christian.jones@bridgepoint.eu
+44 20 7034 3500
Finsbury Glover Hering (Public Relations Adviser to Bridgepoint)
Charles O'Brien / +44 20 7251 3801 / +44 7825 043 656
Anjali Unnikrishnan / +44 20 7251 3801 / +44 7826 534 233
Financial performance
Total revenue of £122.2m (£78.7m in H1 20) is an increase of 55%, driven by:
•
Higher management fees (+£26.8m) largely from the acquired EQT Credit business (+£15.1m) and contribution of BDC IV (£13.5m), which began earning fees from 1 January 2021
•
Greater investment profits (+£16.9m) as a result of strong underlying fund performance, in particular BE V's exit of Calypso for 6x cost
Total operating expenses increased to £71.6m (£56.8m), primarily due to the acquisition of the EQT Credit business, and additional headcount in the professional support teams to support business growth. Travel costs, reflecting COVID restrictions, remained subdued in the first half of the year.
Underlying EBITDA of £51.6m (£18.5m) and a margin of 42% (24%), driven by the increased revenues from the acquired EQT Credit business and the commencement of BDC IV fees, as well as greater investment profits.
Underlying FRE of £26.1m (£9.9m) and a margin of 27% (14%), driven by fees from the acquired EQT Credit business and the commencement of BDC IV fees from 1 January.
Profit after tax of £37.4m (£15.8m), an increase of 137%.
Earnings per share on a pro forma basis (post listing) would be £0.04 (£0.02).
Strategic progress
The Group joined the main market of the London Stock Exchange on 26 July 2021, raising gross proceeds of £300m.
Fundraising
Total AUM at 30 June 2021 was €28.5bn (€18.5bn at 30 June 2020), the increase primarily due to Bridgepoint Development Capital IV and funds of the acquired EQT Credit business.
Fee paying AUM at 30 June 2021 was €17.7bn (€12.6bn).
Bridgepoint CLO II was launched in June, raising €350m. Fundraising continued during the period for Bridgepoint Credit Opportunities IV and Bridgepoint Direct Lending III and shortly after the quarter end BE VII (target size of €7.0bn)
Investment activity
Total investments by Bridgepoint funds during H1 21 amounted to €2.7bn (€0.6bn in H1 20).
Total gross exits completed in the period increased to €2.1bn (€0.2bn).
At the end of June 2021, the currently investing PE funds (where the timing of new funds will drive material step-ups in fee-charging AUM) had made the following primary capital commitments:
•
Bridgepoint Europe VI: 78% (53% at 30 June 2020)
•
Bridgepoint Development Capital IV 3% (BDC III 81% at 30 June 2020)
•
Bridgepoint Growth I 75% (60% at 30 June 2020)
People
The number of FTE amounted to 320 at the end of the period (30 June 2020: 262) reflecting both the EQT Credit acquisition (31 credit professionals at the time of the acquisition) and the continued investment in the team ahead of AUM growth.
ESG
Bridgepoint follows a long-term approach with its investments, and, accordingly, has embedded ESG criteria across its investment process and portfolio management. Bridgepoint is hands-on in driving improvement in businesses' ESG-oriented measures with a philosophy of "constant improvement" and upholds a clear set of expectations with respect to the activities of its portfolio companies. Over the last six months, the company has continued to make good progress in this area, has set new metrics against which to measure its performance and Bridgepoint intends to be compliant with Article 8 of the Sustainable Finance Disclosure Regulation.
Group Board: one third female director representation.
50:50 gender balance achieved for entry level recruitment (associate programme).
Overall female diversity in the investment team currently at 25% with 40% target by 2025.
Key financials1
GBPm
H1 2021
H1 2020
FY 2020
Management fees
96.3
69.5
148.6
Profits from co-investment and carried interest
25.5
8.6
42.3
Total income
122.2
78.7
191.8
EBITDA
51.6
18.5
58.7
Underlying EBITDA*2
51.6
18.5
66.1
Profit before tax
40.4
16.0
48.5
Tax
(3.0)
(0.2)
(0.8)
Profit after tax
37.4
15.8
47.7
Profit attributable to equity holders3
29.1
13.9
36.5
KPIs
H1 2021
H1 2020
FY 2020
Total AUM (€bn)
28.5
18.5
26.6
Fee paying AUM (€bn)
17.7
12.6
16.1
Management fee margin on fee paying AUM*
1.23%
1.24%
1.22%
Underlying EBITDA margin*
42%
24%
34%
Underlying FRE (£m)*
26.1
9.9
23.8
Underlying FRE margin*
27%
14%
16%
Pro forma basic and diluted EPS (£)4
0.04
0.02
0.04
FTEs
320
262
310
Notes:
1. These H1 21 and H1 20 figures are all unaudited, however the accounting policies applied in this half year update are the same as those applied in the audited Historical Financial Information included within the Prospectus published on 21 July 2021.
2. The metrics denoted with a * are alternative performance metrics used by the Group. The calculations are explained within the definitions section of this announcement.
3. Prior to the IPO, Dyal IV Equity Fund's interest ("Dyal") was held at a level below Bridgepoint Group plc resulting in a non-controlling interest share of profit. Following the IPO Dyal's interest was consolidated into Bridgepoint Group plc. EPS has been calculated using profit attributable to all equity holders, consistent with the requirements of IFRS.
4. Pro forma EPS is calculated using post IPO number of shares and profit after tax attributable to the shareholders of Bridgepoint Group plc. An explanation of the metrics and ratios referenced above can be found within the definitions section.
Assets under management
EURbn
H1 2021
H1 2020
FY 2020
Total AUM
28.5
18.5
26.6
Fee paying AUM
17.7
12.6
16.1
Total AUM development during the last twelve months
EURbn
Private equity
Credit
Total
30 June 2020
17.3
1.3
18.5
Fundraising
2.2
0.9
3.1
Acquired funds
-
5.9
5.9
Divestments
(2.5)
(0.5)
(3.0)
Revaluations
3.7
0.2
3.9
30 June 2021
20.7
7.8
28.5
Total Fee Paying AUM development during the last twelve months
EURbn
Private equity
Credit
Total
30 June 2020
12.2
0.4
12.6
Fundraising / invested
2.0
1.2
3.2
Acquired funds
-
3.5
3.5
Divestments
(0.4)
(0.6)
(1.0)
Step down
(0.1)
(0.4)
(0.5)
30 June 2021
13.7
4.0
17.7
Investment activity by Bridgepoint funds
As at 30 June 2021, fund returns continued to be strong and in line with prior performance.
EURbn
Private equity
Credit
Total
Investments by funds
2.7
0.6
1.8
Gross fund exits
2.1
0.2
2.1
An explanation of the metrics and ratios referenced above can be found within the definitions section:
Definitions
Term
Definition
Central
Central represents the support functions of the Group including investor relations, head office, finance, human resources, IT, legal and marketing
Credit
The Bridgepoint Credit business segment, comprising the Direct Lending, Opportunities and Senior Debt strategies
EBITDA margin
EBITDA as a percentage of total income
EPS
Earnings per share (quoted in this announcement as pro-forma using post IPO number of shares and profit after tax attributable to the shareholders of Bridgepoint Group plc)
Fee paying AUM
Assets under management, excluding CLOs and certain co-investments, upon which management fees are charged by the Group
FRE
Fee related earnings
FTE
Full time employee
Management fee margin on fee paying AUM
The weighted average management fee rate, excluding structural and accounting impacts, for all Bridgepoint Funds contributing to AUM in a specific period (excluding co-investment vehicles)
Private equity
The Bridgepoint Private Equity business segment comprised of the Bridgepoint Europe, Bridgepoint Development Capital and Bridgepoint Growth strategies
Total AUM
Total value of unrealised assets as of the relevant date plus undrawn commitments managed by the Group
Underlying EBITDA
Excludes exceptional items from EBITDA
Underlying EBITDA margin
Underlying EBITDA as a percentage of total income
Underlying FRE
Underlying EBITDA, less carried interest and co-investment profits
Underlying FRE margin
Underlying FRE as a percentage of total income excluding carried interest and co-investment profits
Forward looking statements
This announcement may include forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "plans", "targets", "aims", "believes", "expects", "anticipates", "intends", "estimates", "will", "may", "continues", "should" and similar expressions. These forward-looking statements reflect, at the time made, the beliefs, intentions and current targets/aims of Bridgepoint Group plc (the "Company"). Forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The forward-looking statements in this announcement are based upon various assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Forward-looking statements are not guarantees of future performance and such risks, uncertainties, contingencies and other important factors could cause the actual outcomes and the results of operations, financial condition and liquidity of the Company, its subsidiary undertakings or the industry to differ materially from those results expressed or implied in this announcement by such forward-looking statements. No representation or warranty, express or implied, is made that any of these forward-looking statements or forecasts will come to pass or that any forecast result will be achieved. Undue influence should not be given to, and no reliance should be placed on, any forward-looking statement. No statement in this announcement is intended to be nor may be construed as a profit forecast. Neither the Company, nor any of its subsidiaries nor any of their affiliates, nor any of its or their officers, employees, agents or advisers, undertake to publicly update or revise any such forward-looking statement, except to the extent required by applicable law.
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