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London, UK, 30 November 2021
Edison issues review on NB Private Equity Partners (NBPE)
NB Private Equity Partners (NBPE) continues its strong performance driven by exits and valuation uplifts in existing portfolio holdings. In the 12 months ending October 2021, it delivered a NAV total return of 57.8% in US dollar terms, with 5.4pp from the recent IPO of the warehouse automation business AutoStore. The performance was also supported by growth in the remaining portfolio companies. The realisations have left NBPE with increased dry powder, while the investment level remained within the target range. Despite the strong returns and a one-layer fee structure, NBPE trades at a wide discount (21% versus the peer average of 14%).
The 2021 year-to-date realisations (supported by strong M&A and IPO markets) underline the manager's expertise (with 3.7x invested capital exit multiple) and conservative approach to valuation; the average uplift stood at 100% to end-FY20 carrying values. NBPE's announced exits of US$365m year to date allowed the manager to repay its credit facility and leaves NBPE with ample resources to pursue new investments. This has also reduced the investment level to 111% which, while at the lower end of the target range, leaves NBPE with a solid capital structure ahead of the ZDPs maturing in 2022. At the same time, NBPE still sees exit opportunities in its portfolio, of which 61% is from 2018 and earlier investments. NBPE also maintained its dividend payout policy throughout the pandemic and the last 12-month dividends imply a c 3.1% yield.
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