RCS - NB Private Equity - Results analysis from Kepler Trust Intelligence

NB Private Equity PartnersAnnouncement

06/05/2022 16:00

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RNS Number : 6692K  NB Private Equity Partners Limited  06 May 2022

NB Private Equity Partners (NBPE)

06/05/2022

 

Results analysis from Kepler Trust Intelligence

NB Private Equity Partners (NBPE) has released its financial results for the
year ending 31 December 2021. The trust had its best year on record,
delivering NAV total returns of 44.8% in USD terms and share price total
returns of 65.0% in GBP terms. This also marked the third consecutive year
that NBPE has delivered double-digit NAV total returns for shareholders.

Underpinning this record year of performance was continued strong operating
performance, with revenue and EBITDA growth of 27% and 28% respectively and a
record level of realisations. In total, 14 companies announced full or partial
exits, at an 83% increase relative to prior year valuations and a 3.3x
multiple of cost.

Those exits and other portfolio realisations resulted in $389m of proceeds.
NBPE now has $402m of available liquidity, with $102m in cash and $300m from
an undrawn credit line. However, NBPE's investment level currently sits at
107%, meaning the trust can afford to be selective when making new
investments.

 

Kepler View

Realisations have been one of the driving forces behind much of NB Private
Equity Partners (NBPE's) success over the past three years and 2021 was no
exception. A raft of dealmaking helped drive strong returns, as well as
valuation increases as a result of strong operating performance from the
existing portfolio.

 

On a weighted average basis, the companies in the underlying portfolio
generated LTM revenue and EBITDA growth of 27% and 28%, respectively in 2021,
well ahead of most listed equities. With an average age of private investments
of 3.4 years, value creation is well-underway across the portfolio. In
addition, value increases across the portfolio were driven from holdings which
IPO'd and which NBPE continues to own shares in. At the year end, 17% of NAV
was represented by public holdings, some of which are represented in the
largest individual holdings in the portfolio. Given the falls in public
markets since the financial year end, this has been the driving contributor to
the fall in NAV we have seen since then.

 

The strong performance during the year reflects the rigorous process the team
uses to assess potential investments, not to mention the underlying strength
of the companies in the portfolio in terms of revenue and earnings growth. The
team prefer companies and sectors backed by megatrends, with high-growth or
secular tailwinds, and in many cases, high barriers to entry or the delivery
of mission-critical products or services. Key sectors include technology,
industrials and industrial technology, consumer/e-commerce and business and
financial services.

 

NBPE's goal is to invest in private companies and deliver long-term capital
appreciation to shareholders and income through the semi-annual dividend. It
attempts to do this by co-investing alongside private equity managers with
whom NB has strong relationships. This means that it gets access to lots of
deal flow, often on a management fee and performance fee-free basis.
Importantly, in this way the investment manager's team can manage cashflows
and deploy capital in a nimble and efficient manner, without the need to
over-commit to funds or add more balance sheet risk.

 

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(https://www.trustintelligence.co.uk/investor/articles/news-investor-results-analysis-nb-private-equity-partners-retail-may-2022)

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