NB Private Equity Partners

NB Private Equity Partners (NBPE)

29/09/2023

Results analysis from Kepler Trust Intelligence

NB Private Equity Partners released its half year report to 30/06/2023, recording strong performance driven primarily by its private holdings

NBPE posted 4.8% NAV total return in the six month period, with valuations of the private companies rising 3.8% in constant currencies, with the strong performance attributed to strong operating performance, with the underlying portfolio reporting weighted average LTM revenue growth of 14.9% and LTM EBITDA growth of 15.4%, despite a challenging broader economic context

NBPE currently sits on a discount of -25.0%, a slight narrowing from its 2022 year-end discount

Kepler View

With markets still experiencing some volatility in the first half of 2023, NB Private Equity Partners (NBPE) has delivered some good performance this calendar year.

That its private portfolio has provided the major share of the returns seen in the first half of the year is especially encouraging. In particular, the role of revenue growth and EBITDA growth in the positive revaluations of the private portfolio demonstrates investment cases playing out in real time. In addition to this organic growth, NBPE also highlighted that M&A has been accretive and should help support future growth through the benefits of scale, customer and end market diversification.

Elsewhere, the strong realisation pipeline for the trust has continued to play out, with $127m of announced realisations year-to-date, including minority liquidity from the trust's largest holding, Action, as NBPE took advantage of an opportunity to crystallise some of the gain on what has been a very successful investment. With the exception of Action, all of the rest of the realisations are from smaller, more mature holdings, including quoted holdings.

The listed private equity sector continues to be dogged by particularly wide discounts, with NBPE no exception. While NBPE's discount has narrowed over the course of the year the Chairman has highlighted that the board believes it's "unjustifiably wide given the quality and performance of the portfolio", and sees the wide discount as an "opportunity to invest in a portfolio that is performing strongly and [NB] knows well."

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