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

NB Private Equity PartnersAnnouncement

01/10/2025 14:45

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RNS Number : 6801B  NB Private Equity Partners Limited  01 October 2025

NB Private Equity Partners (NBPE)

01/10/2025

Results analysis from Kepler Trust Intelligence

NB Private Equity Partners (NBPE) has released its interim results for the six
months to 30/06/2025. The net asset value (NAV) total return was 4% over the
period, whilst the share price total return was -7.6%. The private investment
portfolio reported revenue and EBITDA growth of 8.8% and 9.8% respectively,
representing only a slight moderation of EBITDA growth from the previous
financial year. Valuations declined modestly, and now stand at a weighted
average of 15.4x on an EV/ EBITDA basis. Since 2021, the managers note that
the portfolio's overall valuation multiple has contracted significantly.

Performance across NBPE's 10 largest private investments, which represent 31%
of the portfolio, has been particularly strong, reporting weighted average LTM
(last twelve month) revenue growth of 13.7% and LTM EBITDA growth of 15.9%.
Given the maturity of the portfolio (average age of portfolio 5.6 years), the
managers report that they believe the portfolio has a number of high quality
'exit ready' companies which should drive liquidity and performance as markets
improve.

NBPE continues to maintain a strong balance sheet, supported by its
co-investment model and minimal unfunded commitments. The investment level was
101%, at the lower end of the target 100-110% range. This financial
flexibility allows NBPE to pursue new investments, maintain dividend payments,
and fund an increasing level of share buybacks without compromising balance
sheet stability. Since June the board have increased the level of buybacks,
repurchasing approximately $5.8m worth. This buyback activity has been in
addition to the $0.94 per share, or approximately $43m, returned to
shareholders this year by way of dividends.

Kepler View

In our view, it is a strong positive for prospects that NBPE's largest
investments are growing fastest. Optimism on prospects for a recovery in the
private equity exit environment were running high at the start of 2025, which
were blown off course by President Trump unleashing his barrage of tariffs in
April. We are hopeful that the last quarter of 2025, and the run into the
year-end might see momentum build once again. With the largest companies in
the portfolio driving performance, NBPE is primed for just such an
eventuality, with the companies most able to 'move the needle' in NAV terms
performing well and potentially 'exit-ready'.

The discount to NAV of 30% remains wide in absolute terms, but is broadly
in-line with peers. Yet in our view, NBPE offers a unique proposition that is
especially well placed to navigate a continued slowdown in private equity deal
activity. On the other hand, the portfolio looks increasingly well placed to
benefit should exit conditions improve. It does not pay two layers of fees on
the vast majority of co-investments, making it cost-effective relative to many
peers.  As such, for investors who can take a long-term view, the discount to
NAV could represent an opportune entry point.

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