London, UK, 23 June 2021
Edison issues review on NB Private Equity Partners (NBPE)
NB Private Equity Partners (NBPE) delivered a 12-month NAV total return to end-May 2021 of 52.3% in US$ terms, strongly supported by its exit activity. This includes 10 deals announced in 2021 with an estimated uplift of US$160m (15% of end-2020 NAV), most of which is reflected in the current NAV. NBPE received c US$139m from all its realisations in 2021 until 15 June and expects a further c US$116m once all the above deals have closed. The remaining portfolio also performed well, benefiting from long-term secular trends. The portfolio is currently valued as at end-March 2021 (except for public stocks). Despite the strong returns and a one-layer fee structure, NBPE trades at one of the widest discounts among peers.
§ Direct co-investments will drive future returns as NBPE's portfolio shift away from income and fund investments is largely complete.
§ Its strong exit activity in 2020 and so far in 2021 allowed it to de-risk its portfolio by repaying most of its credit facility, which, together with the NAV uplift, visibly reduced NBPE's leverage. This should ease some earlier investor concerns.
§ We note that despite a challenging environment, NBPE maintained its dividend target of at least a 3% yield on NAV. With a wide discount to NAV of c 26%, the first 2021 instalment implies an attractive annualised dividend yield of 3.3%.
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