NBPE Interim Results and 31 August 2023 NAV Estimate
THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA, ITALY, DENMARK, JAPAN, THE UNITED STATES, OR TO ANY NATIONAL OF SUCH JURISDICTIONS |
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 growth1, 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 20222
$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)* | 4.8% | 5.4% | 75.5% | 89.3% | 238.0% |
MSCI World TR (USD)* | 15.4% | 19.1% | 43.2% | 58.3% | 161.5% |
|
|
|
|
|
|
Share price TR (GBP)* | (3.9%) | 6.1% | 84.2% | 74.4% | 290.0% |
FTSE All-Share TR (GBP)* | 5.3% | 7.9% | 33.2% | 16.5% | 78.0% |
*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)* | 1.8% | 4.3% | 66.6% | 83.9% | 221.0% |
MSCI World TR (USD)* | 16.5% | 16.2% | 29.2% | 53.0% | 156.0% |
|
|
|
|
|
|
Share price TR (GBP)* | 0.9% | 0.5% | 92.4% | 67.5% | 311.4% |
FTSE All-Share TR (GBP)* | 2.7% | 5.2% | 34.9% | 18.4% | 70.6% |
*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 milllion3
– 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 ($90 million) and invested a portion of this amount in US Treasury Bills, partially offsetting NBPE’s minimum utilisation fee
Portfolio Valuation
The fair value of NBPE’s portfolio as of 31 August 2023 was based on the following information:
14% of the portfolio was valued as of 31 August 2023
11% in public securities
3% in private direct investments
86% of the portfolio was valued as of 30 June 2023
85% in private direct investments
1% in private fund investments
Capital Markets Day
NBPE will hold a virtual Capital Markets Day.
Date: Thursday 5 October 2023
Start: 14:00 BST
Finish: 16:00 BST
The Company’s Chairman and senior portfolio management team from NB Private Markets will provide a detailed analysis of the portfolio and share their latest views on the private equity market. Neuberger Berman’s ESG team will also provide an update on the portfolio. In addition, case studies of underlying portfolio companies will be presented by two of the lead private equity firms which NBPE has invested alongside. This will be followed by Q&A.
Participants may register for the event at the following event page link: Registration
For further information, please contact:
NBPE Investor Relations +1 214 647 9593
Kaso Legg Communications +44 (0)20 3995 6673
Charles Gorman nbpe@kl-communications.com
Luke Dampier
Charlotte Francis
Supplementary Information (as at 31 August 2023)
Company Name | Vintage | Lead Sponsor | Sector | Fair Value ($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.
