NBPE Interim Results and 31 August 2023 NAV Estimate
26/09/2023 07:00
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26 September 2023
NB Private Equity Partners (NBPE), the $1.3bn, FTSE 250, listed private equity
investment company managed by Neuberger Berman, today releases its 2023
Interim Report and 31 August 2023 Monthly Portfolio Update
Interim Results Highlights (30 June 2023)
* NAV per share of $29.24 (£23.00)
* 4.8% NAV TR in the six months to 30 June 2023
* Strong operating performance driving value and further supported by positive
returns in the quoted portfolio
* Valuations of private companies increased by 3.8% in constant currencies
* Portfolio company weighted average LTM 30 June 2023 operating performance of
14.9% revenue and 15.4% EBITDA growth(1), respectively, inclusive of M&A
* Private portfolio LTM/EBITDA valuation multiple of 15.4x at 30 June 2023, an
increase from 15.2x at 31 December 2022; weighted average net debt of 5.4x, a
decrease from 5.5x at 31 December 2022(2)
* $291 million of available liquidity at 30 June 2023
Peter Von Lehe, Managing Director and Head of Private Equity Investment
Solutions & Strategy at Neuberger Berman commented:
“We believe the portfolio is well positioned to navigate the current
macro-economic headwinds. The increase in value of our private companies was
driven by strong operating performance, even in a challenging economic
environment. Our first half performance was further supported by positive
performance from our quoted holdings.”
Paul Daggett, Managing Director of Neuberger Berman, continued:
“LTM 30 June 2023 operating performance was strong and with our overall
valuation multiple largely in-line with 31 December 2022, valuation increases
were mostly attributable to earnings growth, rather than multiple expansion.
This was largely driven by strong organic growth at a number of companies as
well as accretive M&A – with several companies completing meaningful M&A
transactions in the portfolio to support further growth.”
The Company’s 2023 Interim Report is available to view at:
https://www.nbprivateequitypartners.com/.
As of 30 June 2023 YTD 1 Year 3 years 5 years 10 years
NAV TR (USD)* Annualised 4.8% 5.4% 5.4% 75.5% 20.6% 89.3% 13.6% 238.0% 13.0%
MSCI World TR (USD)* Annualised 15.4% 19.1% 19.1% 43.2% 12.2% 58.3% 9.6% 161.5% 10.1%
Share price TR (GBP)* Annualised (3.9%) 6.1% 6.1% 84.2% 22.6% 74.4% 11.8% 290.0% 14.6%
FTSE All-Share TR (GBP)* Annualised 5.3% 7.9% 7.9% 33.2% 10.0% 16.5% 3.1% 78.0% 5.9%
*Reflects cumulative returns over the time periods shown and are not
annualised.
Portfolio Update to 31 August 2023
Following the 1H private portfolio valuation increases detailed above,
movements in public holdings and negative FX movements in July and August
resulted in a NAV TR increase of 1.8% during 2023 year to date
* 31 August 2023 NAV per share of $27.93 (£22.04), a decrease of 3.0% in the
month
* $36 million ($0.77 per share) and $7 million ($0.15 per share) attributable
to declines in quoted share prices and negative foreign exchange valuation
adjustments, respectively, during the month of August
* $22 million ($0.47 per share) declared in July and paid in August 2023
As of 31 August 2023 YTD 1 Year 3 years 5 years 10 years
NAV TR (USD)* Annualised 1.8% 4.3% 4.3% 66.6% 18.6% 83.9% 13.0% 221.0% 12.4%
MSCI World TR (USD)* Annualised 16.5% 16.2% 16.2% 29.2% 8.9% 53.0% 8.9% 156.0% 9.9%
Share price TR (GBP)* Annualised 0.9% 0.5% 0.5% 92.4% 24.4% 67.5% 10.9% 311.4% 15.2%
FTSE All-Share TR (GBP)* Annualised 2.7% 5.2% 5.2% 34.9% 10.5% 18.4% 3.4% 70.6% 5.5%
*Reflects cumulative returns over the time periods shown and are not
annualised.
Realisations from the portfolio continue in 2023
* 2023 year to date announced realisations of $127 milllion(3)
– Seven full or partial sales pending in 2023: the full sales of
Accedian, FV Hospital, Boa Vista, Concord Bio and Petsmart, as well as further
liquidity from the partial sales of public stock in Vertiv and Holley
$20m of investment year to date through 31 August 2023
* Including $13m follow-ons investments in Solenis and Renaissance Learning to
support transformative M&A
Dividend of $22 million paid in August
* Taking total dividends for 2023 to $44m, or $0.94 per share, a 3.4% yield
on NAV and 4.8% yield on the share price
Significant available liquidity at 31 August 2023
* $210 million undrawn credit line and $67 million of cash / liquid
investments
* In addition, $67 million of distributions expected to be received over the
coming months from announced realisations
Repayment of ZDPs at the maturity date in October 2024 and cash management
* The Directors’ intend for NBPE to repay the final entitlement of £65
million ($83 million) of NBPE’s 2024 ZDPs when they mature in October 2024
* To facilitate efficient cash management, NBPE drew down the minimum
utilisation amount on its credit facility ($90 million) and invested a portion
of this amount in US Treasury Bills, partially offsetting NBPE’s minimum
utilisation fee
Portfolio Valuation
The fair value of NBPE’s portfolio as of 31 August 2023 was based on the
following information:
* 14% of the portfolio was valued as of 31 August 2023
* * 11% in public securities
* 3% in private direct investments
* 86% of the portfolio was valued as of 30 June 2023
* * 85% in private direct investments
* 1% in private fund investments
Capital Markets Day
NBPE will hold a virtual Capital Markets Day.
Date: Thursday 5 October 2023
Start: 14:00 BST
Finish: 16:00 BST
The Company’s Chairman and senior portfolio management team from NB Private
Markets will provide a detailed analysis of the portfolio and share their
latest views on the private equity market. Neuberger Berman’s ESG team will
also provide an update on the portfolio. In addition, case studies of
underlying portfolio companies will be presented by two of the lead private
equity firms which NBPE has invested alongside. This will be followed by Q&A.
Participants may register for the event at the following event page link:
Registration
(https://www.globenewswire.com/Tracker?data=dffHKTcvCT2LGZS2W4-p3HW4PvTOOcHBv1DI9AN8eiwIw3sNtFLij6HuSh2EnKNNn7X6fFPetTeQ0gqnMOB4ZdoYNXVI9qSfULcLu11_PAgD7NW9vRtN689bSC6apIxr9-d7oP_g_xoxof82qbRGZwS7tW_b3kPUV-cGcGzfYwWWEiV5S_MhWkdjMzWPZyRC8TmprECbMumraVf4TECMCQ==)
For further information, please contact:
NBPE Investor Relations +1 214 647 9593
Kaso Legg Communications +44 (0)20 3995 6673
Charles Gorman
nbpe@kl-communications.com
Luke Dampier
Charlotte Francis
Supplementary Information (as at 31 August 2023)
Company Name Vintage Lead Sponsor Sector Fair Value ($m) % of FV
Action 2020 3i Consumer 76.5 5.4%
Osaic 2019 Reverence Capital Financial Services 56.5 4.0%
USI 2017 KKR Financial Services 54.0 3.8%
Constellation Automotive 2019 TDR Capital Business Services 49.1 3.5%
Solenis 2021 Platinum Equity Industrials 47.2 3.3%
AutoStore (OB.AUTO) 2019 THL Industrials 42.3 3.0%
Fortna 2017 THL Industrials 37.9 2.7%
Cotiviti 2018 Veritas Capital Healthcare 36.6 2.6%
Business Services Company* 2017 Not Disclosed Business Services 33.4 2.4%
BeyondTrust 2018 Francisco Partners Technology / IT 32.7 2.3%
Monroe Engineering 2021 AEA Investors Industrials 31.9 2.3%
True Potential 2022 Cinven Financial Services 30.5 2.2%
Kroll 2020 Further Global / Stone Point Financial Services 30.1 2.1%
Branded Cities Network 2017 Shamrock Capital Communications / Media 29.9 2.1%
GFL (NYSE: GFL) 2018 BC Partners Business Services 29.4 2.1%
Marquee Brands 2014 Neuberger Berman Consumer 28.9 2.0%
Stubhub 2020 Neuberger Berman Consumer 26.4 1.9%
Staples 2017 Sycamore Partners Business Services 25.6 1.8%
Engineering 2020 NB Renaissance / Bain Capital Technology / IT 25.1 1.8%
Agiliti (NYSE: AGTI) 2019 THL Healthcare 24.1 1.7%
Bylight 2017 Sagewind Partners Technology / IT 23.9 1.7%
Addison Group 2021 Trilantic Capital Partners Business Services 23.9 1.7%
Auctane 2021 Thoma Bravo Technology / IT 22.9 1.6%
Excelitas 2017 AEA Investors Industrials 21.9 1.6%
Accedian 2017 Bridge Growth Partners Technology / IT 21.3 1.5%
Branded Toy Company* 2017 Not Disclosed Consumer 21.2 1.5%
FV Hospital 2017 Quadria Capital Healthcare 20.5 1.5%
Renaissance Learning 2018 Francisco Partners Technology / IT 20.0 1.4%
Solace Systems 2016 Bridge Growth Partners Technology / IT 19.8 1.4%
Viant 2018 JLL Partners Healthcare 19.1 1.4%
Total Top 30 Investments 943.6 66.9%
*Undisclosed company due to confidentiality provisions.
Geography % of Portfolio
North America 74%
Europe 22%
Asia / Rest of World 4%
Total Portfolio 100%
Industry % of Portfolio
Tech, Media & Telecom 21%
Consumer / E-commerce 20%
Industrials / Industrial Technology 17%
Business Services 12%
Financial Services 14%
Healthcare 9%
Other 5%
Energy 1%
Total Portfolio 100%
Vintage Year % of Portfolio
2015 & Earlier 6%
2016 7%
2017 25%
2018 19%
2019 15%
2020 12%
2021 12%
2022 3%
2023 1%
Total Portfolio 100%
About NB Private Equity Partners Limited
NBPE invests in direct private equity investments alongside market leading
private equity firms globally. NB Alternatives Advisers LLC (the “Investment
Manager”), an indirect wholly owned subsidiary of Neuberger Berman Group
LLC, is responsible for sourcing, execution and management of NBPE. The vast
majority of direct investments are made with no management fee / no carried
interest payable to third-party GPs, offering greater fee efficiency than
other listed private equity companies. NBPE seeks capital appreciation through
growth in net asset value over time while paying a bi-annual dividend.
LEI number: 213800UJH93NH8IOFQ77
About Neuberger Berman
Neuberger Berman, founded in 1939, is a private, independent, employee-owned
investment manager. The firm manages a range of strategies—including equity,
fixed income, quantitative and multi-asset class, private equity, real estate
and hedge funds—on behalf of institutions, advisors and individual investors
globally. Neuberger Berman’s investment philosophy is founded on active
management, engaged ownership and fundamental research, including
industry-leading research into material environmental, social and governance
factors. Neuberger Berman is a PRI Leader, a designation awarded to fewer than
1% of investment firms. With offices in 26 countries, the firm’s diverse
team has over 2,750 professionals. For nine consecutive years, Neuberger
Berman has been named first or second in Pensions & Investments Best Places to
Work in Money Management survey (among those with 1,000 employees or more).
The firm manages $443 billion in client assets as of June 30, 2023. For more
information, please visit our website at www.nb.com.
This press release appears as a matter of record only and does not constitute an offer to sell or a solicitation of an offer to purchase any security. NBPE is established as a closed-end investment company domiciled in Guernsey. NBPE has received the necessary consent of the Guernsey Financial Services Commission. The value of investments may fluctuate. Results achieved in the past are no guarantee of future results. This document is not intended to constitute legal, tax or accounting advice or investment
recommendations. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision. Statements contained in this document that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of NBPE's investment manager. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Additionally, this document contains "forward
-looking statements." Actual events or results or the actual performance of NBPE may differ materially from those reflected or contemplated in such targets or forward-looking statements.
(1) Revenue & EBITDA Growth: Past performance is no guarantee of future
results. Fair value as of 30 June 2023 and the data is subject to the
following adjustments: 1) Excludes public companies. 2) Analysis based on 65
private companies and excludes Marquee Brands and one PIK preferred
investment. 3) The private companies included in the data represent
approximately 81% of the total direct equity portfolio. 4) Five companies were
excluded from the revenue and EBITDA growth metrics on the basis of the
following: a) one company used an industry-specific metric as a measurement of
cash flow b) one company (less than 1.5% of direct equity fair value) had
anomalous percentage changes which the manager believed to be an outlier c)
three investments held less than one year. One company was included in the 30
June 2023 growth metrics, but was excluded at 31 December 2022 due to an
extraordinary growth rate. If this company was excluded at 30 June 2023 from
the growth metrics, LTM Revenue and LTM EBITDA would have been 14.3% and
14.4%, respectively. Portfolio company operating metrics are based on the most
recently available (unaudited) financial information for each company and
based on as reported by the lead private equity sponsor to the Manager as of
21 September 2023. Where necessary, estimates were used, which include pro
forma adjusted EBITDA and other EBITDA adjustments, pro forma revenue
adjustments, run-rate adjustments for acquisitions, and annualised quarterly
operating metrics. LTM periods as of 30 June 2023 and 31 March 2023 and 30
June 2022 and 31 March 2022. LTM revenue and LTM EBITDA growth rates are
weighted by fair value.
(2) Valuation & Leverage: Past performance is no guarantee of future results.
Fair value as of 30 June 2023 and subject to the following adjustments. 1)
Excludes public companies, one PIK preferred investment and Marquee Brands. 2)
Based on 65 private companies which are valued based on EV/EBITDA metrics, but
excludes two companies due to the following: a) one company used an
industry-specific metric as a measurement of cash flow b) one company was
valued based on a recent transaction pricing. 3) The private companies
included in the data represents 71% of direct equity investment fair value. 4)
Companies not valued on multiples of trailing EBITDA are excluded from
valuation statistics. 5) Leverage statistics exclude companies with net cash
position and leverage data represents 67% of direct equity investment fair
value. Portfolio company operating metrics are based on the most recently
available (unaudited) financial information for each company and are as
reported by the lead private equity sponsor to the Manager as of 21 September
2023, based on reporting periods as of 30 June 2023 and 31 March 2023. EV and
leverage data is weighted by fair value.
(3) $60 million received during 2023, of which $11 million was attributable to
an announced sale in 2022 but received in 2023. Pending realisations are
subject to customary closing conditions. No assurances can be given the
transactions ultimately close