TIDMNBPE
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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May 06, 2022 10:48 ET (14:48 GMT)
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